SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT No. 1
FORM 8-K/A
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
(I.R.S. Employer
incorporation)
(Commission File Number) Identification No.)
1120 North Main Street
Elkhart, Indiana 46514
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (219) 264-2131
N/A
(Former name or former address, if changed since last
report)
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 [operations] [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 product lines 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, and excluding the effect of the
$6.8 million product recall expense, Atwood Automotive had an
operating profit for the four month period August-November 1995.
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 $30 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.
On May 3, 1996, Excel sold to certain qualified institutional investors
in a private placement $100 million of its Senior Notes due April 2011.
The proceeds of the Senior Notes were used to repay $100 million of the
revolving credit borrowings, and the aggregate commitments of the
Revolving Lenders were reduced from $120 million to $60 million.
Item 7. Financial Statements and Exhibits
7(a) The following consolidated financial statements of
Atwood Industries, Inc. are included herein:
Report of Independent Accountants
Balance Sheets as of December 30, 1995 and
December 31, 1994.
Consolidated Statements of Operations for the
years ended December 30, 1995, December 31, 1994 and
January 1, 1994.
Consolidated Statements of Changes in
Stockholders' Equity for the years ended December 30, 1995,
December 31,
1994 and January 1, 1994.
Consolidated Statements of Cash Flows for the
years ended December 30, 1995, December 31, 1994 and
January 1, 1994.
Notes to Consolidated Financial Statements.
7(b) The pro forma financial information required by
Item 7(b), presented as if Excel had acquired Anderson on January 1,
1995, is included herein. Certain additional adjustments may be made in
the final purchase price allocation of Atwood, however, these are not
expected to be material in relation to the proforma information
presented herein.
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 Amended and Restated Credit Agreement dated
April 29, 1996, among Excel Industries, Inc., certain
banks, Society National Bank as agent and Harris Trust
and Savings Bank as co-agent.
4.3 Form of Note Purchase Agreement dated May 3, 1996
between Excel Industries, Inc. and each of several
institutional investors.
23 Consent of Coopers & Lybrand L.L.P.
* Previously filed.
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: May 13, 1996
By: /s/ Joseph A. Robinson
Joseph A. Robinson, Secretary,
Treasurer and Chief Financial Officer
<PAGE>
ATWOOD INDUSTRIES, INC.
CONSOLIDATED FINANCIAL STATEMENTS
for the years ended December 30, 1995,
December 31, 1994 and January 1, 1994
<PAGE>
I N D E X
Pages
Report of Independent Accountants 1
Consolidated Financial Statements:
Balance Sheets, December 30, 1995 and
December 31, 1994 2
Statements of Operations for the years ended
December 30, 1995, December 31, 1994
and January 1, 1994 3
Statements of Stockholder's Equity for the years
ended December 30, 1995, December 31, 1994
and January 1, 1994 4
Statements of Cash Flows for the years ended
December 30, 1995, December 31, 1994
and January 1, 1994 5
Notes to Consolidated Financial Statements 6-17
<PAGE>
Coopers
&Lybrand Coopers & Lybrand L.L.P.
a professional services firm
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Atwood Industries, Inc.
Rockford, Illinois
We have audited the accompanying consolidated balance sheets of
Atwood Industries, Inc. as of December 30, 1995 and December 31, 1994,
and the related consolidated statements of operations,
stockholder's equity and cash flows for the three years ended
December 30, 1995, December 31, 1994 and January 1, 1994. These
financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial
position of Atwood Industries, Inc. as of December 30, 1995 and
December 31, 1994, and the consolidated results of its operations and
its cash flows for the three years ended December 30, 1995,
December 31, 1994 and January 1, 1994 in conformity with generally
accepted accounting principles.
As discussed in Note E to the financial statements, the Company
changed its method of accounting for postemployment benefits in
1994. As discussed in Note E and H to the financial statements, the
Company changed its method of accounting for postretirement
benefits other than pensions and income taxes in 1993.
Coopers & Lybrand L.L.P.
Rockford, Illinois
March 18, 1996, except for Notes D and K,
for which the date is April 3, 1996
Coopers & Lybrand L.L.P. is a member of Coopers & Lybrand
International, a limited liability association incorporated in
Switzerland
<PAGE>
ATWOOD INDUSTRIES, INC
CONSOLIDATED BALANCE SHEETS
December 30, 1995 and December 31, 1994
(Dollars in Thousands)
<TABLE>
<CAPTION>
ASSETS 1995 1994
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 0 $ 0
Accounts receivable,
trade, less allowance for
losses of $844 and $1,531,
respectively 55,734 64,824
Inventories 26,659 36,443
Customer tooling in process 6,268 5,672
Deferred income taxes 4,889 2,115
Prepaid expenses and deposit 2,733 3,061
Income tax refunds receivable 2,384 5,824
Total current assets 98,667 117,939
Property, plant and equipment:
Land 1,459 1,459
Buildings and improvements 26,442 26,182
Machinery and equipment 101,581 99,561
129,482 127,202
Less accumulated
depreciation 61,854 51,715
67,628 75,487
Note receivable from
parent company 1,936 1,833
Intangible assets, less
accumulated amortization 10,082 11,581
Intangible asset, pensions 2,021 2,242
Other assets 585 1,221
Total assets $180,919 $210,303
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
<TABLE>
<CAPTION>
LIABILITIES 1995 1994
<S> <C> <C>
Current liabilities:
Current maturities of
long-term debt $ 77,893 $ 16,841
Accounts payable and
book overdraft 30,939 37,390
Accrued salaries and wages 3,953 3,885
Other accrued liabilities 7,577 7,418
Total current liabilities 120,362 65,534
Long-term debt 14,608 95,428
Deferred income taxes 3,714 2,602
Accrued benefit plan
liabilities 15,169 15,288
Contingencies
STOCKHOLDER'S EQUITY
Capital stock, no par value,
authorized 3,000,000 shares,
issued and outstanding
1,333,333 shares 1 1
Additional paid-in capital 11,838 11,838
Pension liability adjustment (538) (546)
Foreign currency translation
adjustments (351) (336)
Retained earnings 16,116 20,494
Total stockholder's equity 27,066 31,451
Total liabilities and
stockholder's equity $180,919 $210,303
</TABLE>
ATWOOD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 30, 1995, December 31, 1994 and
January 1, 1994
(Dollars in Thousands, except per share amounts)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Net sales $399,789 $385,116 $320,827
Cost of sales 360,994 344,435 270,620
-------- -------- --------
Gross profit 38,795 40,681 50,207
Selling and admini-
strative expenses 35,648 36,783 31,193
-------- -------- --------
Operating profit 3,147 3,898 19,014
Other expense:
Interest expense, net 8,514 6,199 3,957
Other, net (94) 127 387
-------- --------- --------
8,420 6,326 4,344
-------- -------- --------
Income (loss) before
income taxes and
cumulative effect of
accounting changes (5,273) (2,428) 14,670
Income tax provision
(benefit) (895) 701 6,397
-------- -------- --------
Income (loss) before
cumulative effect
of accounting changes (4,378) (3,129) 8,273
Cumulative effect of
accounting changes,
net of income tax benefit
of $170 and $3,268 in 1994
and 1993, respectively 0 (260) (5,212)
-------- -------- --------
Net income (loss) $ (4,378) $ (3,389) $ 3,061
========= ========= ========
Net income (loss)
per share:
Before cumulative
effect of
accounting changes $ (3.28) $ (2.35) $ 6.21
Cumulative effect
of accounting
changes, net of tax 0.00 (0.19) (3.91)
-------- -------- --------
Net income (loss)
per share $ (3.28) $ (2.54) $ 2.30
========= ========= ========
Average number of
shares outstanding 1,333,333 1,333,333 1,333,333
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
ATWOOD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
For the years ended December 30, 1995, December 31, 1994 and
January 1, 1994
(Dollars in Thousands)
<TABLE>
<CAPTION>
Foreign
Additional Pension Currency
Capital Paid-In Liability Translation Retained
Stock Capital Adjustment Adjustments Earnings
<S> <C> <C> <C> <C> <C>
Balance at
January 2, 1993 $ 1 $ 11,838 $ (271) $ (184) $ 20,822
Net income 0 0 0 0 3,061
Pension adjust-
ment, net of
income tax
effect of $193 0 0 (290) 0 0
Translation
adjustment 0 0 0 (254) 0
Advance to
parent company,
net 0 0 0 0 0
-------- --------- -------- --------- --------
Balance at
January 1, 1994 1 11,838 (561) (438) 23,883
Net loss 0 0 0 0 (3,389)
Pension adjust-
ment, net of
income tax
effect of $11 0 0 15 0 0
Translation
adjustment 0 0 0 102 0
Advance to parent
company, net 0 0 0 0 0
-------- --------- -------- --------- --------
Balance at
December 31, 1994 1 11,838 (546) (336) 20,494
Net loss 0 0 0 0 (4,378)
Pension adjust-
ment, net of
income tax
effect of $3 0 0 8 0 0
Translation
adjustment 0 0 0 (15) 0
Advance to
parent company,
net 0 0 0 0 0
-------- --------- -------- --------- --------
Balance at
December 30,
1995 $ 1 $ 11,838 $ (538) $ (351) $ 16,116
======== ========= ======== ========== ========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
ATWOOD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 30, 1995, December 31, 1994 and
January 1, 1994
(Dollars in Thousands)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (4,378) $ (3,389) $ 3,061
Adjustments to reconcile
net income (loss) to
net cash provided by
operating activities:
Cumulative effect
of accounting changes 0 260 5,212
Depreciation and
amortization 12,927 11,096 8,478
Loss on sale of property,
plant and equipment 114 170 21
Loss (gain) on sale
of investments (39) 85 (91)
Deferred income (833) (833) (833)
Deferred income taxes (1,662) 1,314 755
Provision for warranty
recovery agreement 6,815 0 0
Changes in assets and
liabilities, net
of effects from
business acquisition:
Accounts receivable 9,090 (7,513) (21,258)
Inventories and
customer tooling 9,188 (3,188) (1,549)
Prepaid expenses
and other assets 533 159 702
Accounts payable (12,058) 7,602 8,051
Income taxes 3,440 (6,250) (1,941)
Other accrued
liabilities 1,570 2,324 1,165
-------- ------- -------
Net cash provided by
operating activities 24,707 1,837 1,773
INVESTING ACTIVITIES:
Business acquisitions,
net of cash acquired 0 (10,569) (9,669)
Additions to property,
plant and equipment (6,177) (25,229) (19,209)
Proceeds from disposal
of property, plant
and equipment 2,094 331 167
Proceeds from investments 345 297 623
Advances to parent company (103) (115) (1,718)
-------- ------- -------
Net cash used in
investing activities (3,841) (35,285) (29,806)
FINANCING ACTIVITIES:
Borrowings under
line of credit 301,000 225,000 231,500
Payments on line
of credit (325,623) (192,546) (205,402)
Proceeds from long-
term debt 22 1,000 8,627
Payments of long-
term debt (1,391) (1,208) (6,011)
Payments on warranty
recovery agreement (466) 0 0
Book overdraft 5,607 227 0
-------- ------- -------
Net cash provided by
(used in) financing
activities (20,851) 32,473 28,714
Exchange rate effect
on cash (15) 102 (210)
-------- ------- -------
Net change in cash and
cash equivalents 0 (873) 471
Cash and cash equivalents,
beginning of year 0 873 402
-------- ------- -------
Cash and cash equivalents,
end of year $ 0 $ 0 $ 873
========= ======== ========
Supplemental cash flow
information:
Interest paid $ 9,017 $ 5,740 $ 4,043
Income taxes paid
(refunded) (2,668) 5,381 6,581
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
ATWOOD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 30, 1995, December 31, 1994 and
January 1, 1994
(Dollars in Thousands)
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ (4,378) $ (3,389) $ 3,061
Adjustments to reconcile
net income (loss) to net
cash provided by
operating activities:
Cumulative effect of
accounting changes 0 260 5,212
Depreciation and
amortization 12,927 11,096 8,478
Loss on sale of property,
plant and equipment 114 170 21
Loss (gain) on sale of
investments (39) 85 (91)
Deferred income (833) (833) (833)
Deferred income taxes (1,662) 1,314 755
Provision for warranty
recovery agreement 6,815 0 0
Changes in assets and
liabilities, net of effects
from business acquisition:
Accounts receivable 9,090 (7,513) (21,258)
Inventories and customer
tooling 9,188 (3,188) (1,549)
Prepaid expenses and
other assets 533 159 702
Accounts payable (12,058) 7,602 8,051
Income taxes 3,440 (6,250) (1,941)
Other accrued
liabilities 1,570 2,324 1,165
------- ------- -------
Net cash provided by
operating activities 24,707 1,837 1,773
INVESTING ACTIVITIES:
Business acquisitions,
net of cash acquired 0 (10,569) (9,669)
Additions to property,
plant and equipment (6,177) (25,229) (19,209)
Proceeds from disposal
of property, plant
and equipment 2,094 331 167
Proceeds from
investments 345 297 623
Advances to parent
company (103) (115) (1,718)
------- ------- -------
Net cash used in
investing activities (3,841) (35,285) (29,806)
FINANCING ACTIVITIES:
Borrowings under
line of credit 301,000 225,000 231,500
Payments on
line of credit (325,623) (192,546) (205,402)
Proceeds from
long-term debt 22 1,000 8,627
Payments of
long-term debt (1,391) (1,208) (6,011)
Payments on warranty
recovery agreement (466) 0 0
Book overdraft 5,607 227 0
------- ------- -------
Net cash provided by
(used in) financing
activities (20,851) 32,473 28,714
Exchange rate
effect on cash (15) 102 (210)
Net change in cash
and cash equivalents 0 (873) 471
Cash and cash equivalents,
beginning of year 0 873 402
Cash and cash equivalents,
end of year $ 0 $ 0 $ 873
======== ======== ========
Supplemental cash flow
information:
Interest paid $ 9,017 $ 5,740 $ 4,043
Income taxes
paid (refunded) (2,668) 5,381 6,581
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
A. ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of
Atwood Industries, Inc. (Company), and its wholly-owned
subsidiaries. The Company is a wholly-owned subsidiary of Anderson
Industries, Inc. (AI).
Description of the Business
Atwood Industries' principal lines of business are
recreational vehicle products, automotive and truck products and
injection-molded plastic parts which are manufactured in the United
States, Europe and Mexico. The principal markets for the
automotive, truck, and consumer electronics products are within the
United States and Mexico, while recreational vehicle products are sold
within the United States and Europe.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure associated with contingent assets
and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Fiscal Year
The Company's fiscal year ends on the Saturday nearest
December 31. Fiscal years 1995, 1994 and 1993 ended on December 30,
1995, December 31, 1994 and January 1, 1994, respectively.
Cash Equivalents
To the extent that the Company invests cash, in excess of
daily operating requirements, in short-term investments with
maturities of three months or less, such investments are deemed to be
cash equivalents for financial statement purposes.
Inventories
Inventories are stated at the lower of cost or market. Cost is
determined by the last-in, first-out (LIFO) method for the
majority of the Company's non-tooling inventories. For all other
inventories, cost is determined by the first-in, first-out (FIFO)
method.
Tooling
Tooling inventory represents the cost incurred, net of
progress billings, on tools being developed for customers.
Generally, revenues are recognized when projects are substantially
complete, and generally, losses are recognized when the costs
incurred plus estimates to complete, exceed the estimated revenue.
Actual costs could differ from the estimates to complete. Tooling
revenue, net of costs incurred, is classified in cost of sales.
Property, Plant and Equipment
Property, plant and equipment are stated at cost and
depreciated over their estimated useful lives. Depreciation on
additions is primarily provided using the straight-line method. Upon
disposal of an asset, the resulting gain or loss is included in results
of operations. Expenditures for maintenance and
repairs, which do not materially extend the useful lives of the
assets, are charged to expense when incurred.
Intangible Assets
Intangible assets consist of the excess of cost over fair
value of assets acquired, covenants not-to-compete, patents, trade names
and cost incurred in the successful completion of acquisition and
financing activities. Intangible assets, subject to impairment write-
offs determined by underlying cash flows, are amortized,
using the straight-line method, over useful lives ranging from 5 to 20
years. Accumulated amortization, excluding fully amortized
intangible assets, was $4,567 and $3,791 at December 30, 1995 and
December 31, 1994, respectively.
Income Taxes
Income taxes are provided in accordance with Statement of
Financial Accounting Standards No. 109. The provision for income taxes
differs from the amounts currently payable or refundable
because of temporary differences in the recognition of certain
income and expense items for financial reporting and tax reporting
purposes.
Concentrations of Credit
Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of trade
receivables. Sales to the Company's two largest customers totaled
approximately $105,225, $103,682 and $85,540 in 1995, 1994 and
1993, respectively. The Company's accounts receivable from these two
customers were approximately $28,143 and $24,310 at December 30, 1995
and December 31, 1994, respectively.
Interest Rate Cap
Interest rate cap agreements are entered into primarily as a hedge
against interest exposure of variable rate debt. The
differences to be paid or received on cap agreements designated as
hedges are included in interest expense as payments are made or
received.
Foreign Currency Translation
The balance sheets of foreign subsidiaries with functional
currencies other than the U.S. dollar have been translated at
year-end rates of exchange and statements of operations and cash flows
at weighted average rates of exchange during the year. The gains and
losses from this translation have been accumulated as a separate
component of stockholder's equity. Gains or losses resulting from
currency transactions (which are not significant) are included in
results of operations.
The balance sheets and statements of operations of foreign
subsidiaries with the U.S. dollar as the functional currency have been
remeasured as if the subsidiaries' records were originally
maintained in U.S. dollars.
Reclassifications
Certain reclassifications have been made to conform prior
years' data to the current presentation. These reclassifications had no
impact on previously reported results of operations. In
1995, the Company elected to rescind the plan approved in 1994 to
dispose of its subsidiary, Mark I Molded Plastics. The results
from 1994 have been reclassified from discontinued operations to
continuing operations.
B. BUSINESS ACQUISITION
As of January 18, 1993, the Company acquired substantially all of
the stock of Hydro Flame Corporation, a manufacturer and
distributor of gas fired furnaces to the recreational vehicle
industry, for $9,728, including acquisition expenses. The
acquisition was accounted for using the purchase method of
accounting and the operating results of Hydro Flame are included in the
Company's consolidated statements of income from the date of
acquisition. The excess of cost over fair value of assets acquired is
being amortized over a twenty year period. Unaudited pro forma amounts
are not presented as substantially all of Hydro Flame's sales and net
earnings were included in the reported 1993 results. In April 1993, an
obligation related to a management agreement with a former shareholder
for $1,000 was settled in exchange for the stock of Skyline Industries,
a subsidiary of Hydro Flame. This transaction had no effect on net
income as the amounts were recorded prior to the Hydro Flame
acquisition.
As of May 31, 1994, the Company purchased substantially all of the
assets of Better Products, Inc., a manufacturer and distributor of seat
and sofa hardware for the van conversion market, for $10,326, net of
cash acquired. The acquisition was accounted for using the purchase
method of accounting and the operating results of Better Products are
included in the Company's consolidated statements of operations from the
date of the acquisition. The excess of cost over fair value of assets
acquired of $5,602 is being amortized over a period of fifteen years.
Unaudited pro forma amounts are not presented as they are considered
immaterial to consolidated sales and net earnings in 1994 and 1993.
C. INVENTORIES
Inventories are summarized as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Raw material and purchased parts $ 12,157 $ 17,101
Work in process 9,640 11,158
Finished goods 6,510 9,614
-------- --------
28,307 37,873
Less excess of FIFO over LIFO cost 1,648 1,430
-------- --------
$ 26,659 $ 36,443
======== ========
</TABLE>
Inventories valued using the LIFO method at December 30, 1995 and
December 31, 1994 amounted to $15,854 and $20,421 (on a FIFO basis),
respectively.
D. LONG-TERM DEBT
Long-term debt is summarized as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Revolving line of credit $ 75,831 $ 100,454
Term notes 6,116 6,962
Mortgage note 2,153 2,208
Warranty recovery
agreement 6,350 0
Other 2,051 2,645
------- -------
92,501 112,269
Less current maturities 77,893 16,841
------- -------
Total long-term debt $ 14,608 $ 95,428
======== ========
</TABLE>
In 1995, Atwood violated certain financial tests and ratios
required by the revolving line of credit agreement as amended. In
February 1996, Atwood signed a new amendment which revises and
waives certain covenants under the previous amendment. Borrowings under
the line of credit are limited to the extent of available
collateral as defined in the agreement. The agreement provides for a
lien on substantially all the assets of Atwood and its
subsidiaries.
As discussed in Note K, on April 3, 1996, the buyer of the parent
company's capital stock borrowed funds under a new revolving line of
credit to repay existing obligations under the previous
agreement. This agreement has a four-year term and contains
covenants and requirements based upon the newly merged Company's
financial statements.
The term notes mature through the year 2000 and bear interest from 7.3%
to 8.0%. The term notes are collateralized by certain
machinery and equipment and contain provisions restricting the
payment of dividends. The mortgage note bears interest at 10.1%, and
matures in 2000.
In December 1995, a major automotive customer issued a recall on a
component manufactured by the Company. The recall is limited to 170,000
vehicles and will be administered by the customer. The
Company estimates the total future cost of this recall at $8,140.
Simultaneously, the Company entered into a warranty recovery
agreement with the customer which limits the annual payments
related to the recall to 1996 - $1,250; 1997 - $1,500; 1998 -
$1,750; and the balance due in 1999. The agreement requires
quarterly payments and has been discounted at a prevailing market rate
of interest (10.0%) as of December 1995. The Company
recognized $6,815 of expense related to the recall in 1995. This
agreement has been shown as a noncash transaction in the statement of
cash flows.
Maturities of the long-term debt, other than the revolving
line credit, for the next five years are: 1996 - $2,062; 1997 -
$2,440; 1998 - $3,417; 1999 - $4,901 and 2000 - $3,850.
At December 30, 1995, the Company had outstanding letters of credit
totaling $3,425 which are considered a borrowing for
purposes of amounts available under the revolving line of credit.
The fair value of the long-term debt is $92,166 estimated
based on current rates offered to the Company for debt of the same
maturities. The fair value of the interest rate cap is $-0- based on a
valuation from a major bank.
E. RETIREMENT AND BENEFIT PLANS
The Company provides defined benefit or defined contribution
pension plans, or both in some cases, for substantially all
employees. Benefits provided under defined benefit pension plans are
principally based upon years of service, compensation and
Social Security benefits. Total expense for these plans was
$1,303, $1,313 and $976 for 1995, 1994 and 1993, respectively.
The net pension expense includes the following components:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost for benefits
earned during the period $ 623 $ 710 $ 551
Interest cost on projected
benefit obligation 1,233 1,205 1,033
Actual return on plan assets (1,560) 1,331 (927)
Net amortization and deferral 1,007 (1,933) 319
------ ------- ------
$1,303 $1,313 $ 976
====== ====== =====
</TABLE>
The following table sets forth the plans' funded status and amounts
recognized in the Company's consolidated balance sheets:
<TABLE>
<CAPTION>
1995 1994
------------------- -------------------
Plan for Which Plan for Which
------------------- -------------------
Assets Accumulated Assets Accumulated
Exceed Benefits Exceed Benefits
Accumulated Exceed Accumulated Exceed
Benefits Assets Benefits Assets
<S> <C> <C> <C> <C>
Vested benefit
obligation $(4,525) $(6,974) $(5,378) $(6,301)
======= ======= ======= =======
Accumulated benefit
obligation $(5,146) $(7,167) $(5,929) $(6,464)
======= ======= ======= =======
Plan assets at
fair value $ 6,140 $ 3,641 $ 6,716 $ 3,390
Projected benefit
obligation for
service rendered
to date (8,653) (7,337) (8,896) 6,666
-------- ------- ------- ------
Plan assets less
than projected
benefit obligation (2,513) (3,696) (2,180) (3,276)
Unrecognized net
loss from past
experience
different from
that assumed 1,866 1,067 1,907 1,111
Unrecognized prior
service cost 55 1,498 60 1,632
Adjustment to
recognize minimum
liability (with
offsetting debit
recorded as an
intangible asset) 0 (2,918) 0 (3,151)
Unrecognized net
obligation
(asset) being
recognized
over 15 years (363) 522 (423) 610
------- ------- ------- ------
Accrued pension
liability for
defined benefit
plans $ (955) $(3,527) $ (636) $(3,074)
======== ======== ======= ========
</TABLE>
The projected benefit obligation has been determined using a weighted
average discount rate of 7.75% and 8.25% in 1995 and 1994, respectively,
and a rate of increase in future compensation of 5.0%. The expected
weighted long-term rate of return on plan assets was 8.0%. Plan assets
consist principally of U.S. Government securities, corporate stocks,
bonds and pooled investment funds.
The Company also provides various defined contribution
plans. The expense for these plans for 1995, 1994 and 1993 was
$1,571, $1,358 and $1,227, respectively.
The Company provides certain health care benefits to
eligible retired employees and their dependents and survivors.
Generally participants become eligible if they meet minimum age and
service requirements. The Company has the right to modify or
terminate these benefits.
During 1993, the Company elected to adopt the provisions
of Statement of Financial Accounting Standards (SFAS) No. 106,
"Employer's Accounting for Postretirement Benefits Other Than
Pensions." The Statement requires companies to accrue the expected cost
of providing postretirement benefits other than pensions over the years
that employees render service rather than the cash basis previously
used. The Company elected to immediately recognize the accumulated
benefit obligation of $8,171 related to prior service cost, measured as
of January 3, 1993. This was a noncash charge to income of $4,903
(after reduction for income taxes of $3,268)
recognized as a cumulative effect of accounting change as of
January 3, 1993.
The following table sets forth the plan's obligation and
cost for these benefits:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Accumulated postretirement
benefit obligation:
Retirees $ 2,732 $ 2,836
Fully eligible
active plan participants 580 774
Other active plan
participants 2,437 3,124
------- ------
Accumulated postretirement
benefit obligation 5,749 6,734
Unrecognized gain 1,690 628
Unrecognized prior service costs 1,645 1,758
Total accumulated postretirement
benefit liability $ 9,084 $ 9,120
======= =======
</TABLE>
The net periodic postretirement benefit cost includes the
following components:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost for benefits
earned during the period $ 205 $ 277 $ 465
Interest cost on accumulated
postretirement benefit
obligation 429 489 637
Amortization of prior
plan amendment (113) (113) (0)
Amortization of
unrecognized (gain) (58) 0 (0)
Curtailment gain
recognized due to
termination of benefits (0) (176) (0)
----- ----- -----
Net periodic post-
retirement benefit cost $ 463 $ 477 $1,102
===== ===== ======
</TABLE>
For measurement purposes, a 9.1% and 7.6% annual rate of
increase in the per capita cost of covered health care benefits for
pre-65 and post-65 participants, respectively, was assumed for
1995; the rate was assumed to decrease gradually to 5.6% by the
year 2021. The health care cost trend rate has a significant
effect on the amounts reported. A 1.0% increase in the health care
trend rate per year would increase the net periodic cost by $36 for the
year. The weighted average discount rate used in determining the
accumulated postretirement benefit obligation was 7.75% in 1995 and
8.25% in 1994.
The Company has various deferred compensation agreements with certain
members of management. The Company recognized $452, $56 and $560 of
compensation expense in 1995, 1994 and 1993, respectively. The deferred
compensation accrued as of December 30, 1995 and December 31, 1994 was
$2,002 and $1,705, respectively. These arrangements include a deferred
appreciation plan which allows key executives to participate in the
appreciation of hypothetical shares of stock based on a predetermined
formula. Other agreements provide benefits based on length of service
and salary at retirement. Payment of benefits under certain of these
agreements are accelerated upon certain change of control events.
During 1994, the Company adopted SFAS No. 112, "Employers' Accounting
for Postemployment Benefits." Prior to January 2, 1994, the Company
recognized the cost of providing these benefits on a cash basis. The
Company recognized the accumulated postemployment benefit obligation of
$430 related to prior service costs, measured as of January 2, 1994.
This was a noncash charge to income of $260 (after reduction for income
taxes of $170) recognized as a cumulative effect of accounting change as
of January 2, 1994.
F. LEASE COMMITMENTS
The Company leases transportation equipment, office space
and data processing equipment under certain operating leases.
Future minimum lease payments under operating leases that have
initial or remaining noncancelable lease terms in excess of one
year at December 30, 1995 are: 1996 - $3,005; 1997 - $2,752; 1998 -
$1,944; 1999 - $1,441; and thereafter - $120. Rental expense for 1995,
1994 and 1993 was $4,548, $2,221 and $2,972, respectively.
G. SALE/LEASEBACK
In December 1992, the Company entered into a
sale/leaseback arrangement with an unrelated third party. The
agreement involved the sale of machinery and equipment for $7,500. The
Company is leasing these assets under an operating lease that has an
initial term of three years with options to renew for two 24 month
periods. The Company has exercised its option to extend the lease for
an additional 24 months. The Company has the option to purchase the
machinery and equipment at the end of the lease. However, if it does not
exercise this option or the option to renew at the end of the 24
months, it has guaranteed the lessor 45.4% of the original sales price
upon disposition. The income on the sale of the machinery and equipment
of $2,500 was deferred and amortized in proportion to the minimum rental
payments over the initial three-year lease term. Deferred income of
$833 was recognized in 1995, 1994 and 1993.
H. INCOME TAXES
The Company and its subsidiaries are included in the
consolidated income tax returns of AI. A tax sharing agreement
between AI and the Company provides for an allocation of income
taxes to the Company on the basis of the Company filing a separate
return.
The provision for income taxes consists of:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Current:
Federal $ (139) $ (1,247) $ 4,347
State 906 634 1,328
Deferred (1,662) 1,314 722
------- -------- -------
$ (895) $ 701 $ 6,397
======= ======== =======
</TABLE>
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income Taxes,"
which requires a change from the deferred method to the asset and
liability method of accounting for income taxes. The Company adopted
SFAS No. 109 as of January 3, 1993. The cumulative effect of the
accounting change decreased net income by $309, and is reported
separately in the consolidated statements of operations for the year
ended January 1, 1994. Excluding the amount recognized as the cumulative
effect of accounting change, the effect of applying SFAS No. 109 on net
income for the year ended January 1, 1994, was a benefit of $117.
The components of the deferred tax (benefit) expense were
as follows:
<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Depreciation $ 1,247 $ 1,733 $ 758
Deferred income (611) 1,713 (333)
Employee benefit and
compensation plans 252 1,212 253
Accrued liabilities 2,435 (778) 147
Other (115) (142) (103)
------- ------ ------
$(1,662) $ 1,314 $ 722
======== ======= ======
</TABLE>
The components of the net deferred tax (assets) liabilities as of
December 30, 1995 and December 31, 1994, were as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Deferred tax liabilities:
Depreciation $ 9,366 $ 8,119
Deferred income 1,435 2,046
------- ------
Total deferred tax liabilities $10,801 $10,165
======= =======
Deferred tax assets:
Employee benefit and
compensation plans $ 4,985 $ 5,237
Foreign net operating
loss carryforward 2,170 1,679
Accrued liabilities 4,425 1,990
Other 2,566 2,451
Valuation allowance (2,170) (1,679)
------- -------
Total deferred tax assets $11,976 $ 9,678
======= =======
Net deferred tax
(assets) liabilities $(1,175) $ 487
======= =======
</TABLE>
The Company has recorded a valuation allowance to reflect the estimated
amount of deferred tax assets which may not be realized due to foreign
net operating loss carryforward limitations. The change in the
valuation allowance is as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Valuation allowance at
beginning of year $(1,679) $(1,251)
Utilization of capital
loss carryforward 0 617
Foreign net operating
loss carryforward (491) (1,045)
------- -------
Valuation allowance at
end of year $(2,170) $(1,679)
======== ========
</TABLE>
In January 1993, the Company acquired Hydro Flame which
generated capital loss carryforwards expiring in 1998. During
1994, the Company determined that the remaining carryforward
benefit will be utilized prior to expiration and, accordingly,
eliminated the valuation allowance and reduced the excess cost over fair
value of assets acquired by $617 in 1994.
The reasons for the difference between the effective
tax rate of the Company and the United States statutory federal
income tax rate are as follows:
<TABLE>
<CAPTION>
Percent of Pretax
Income (Loss)
1995 1994 1993
<S> <C> <C> <C>
Statutory rate (34.0) % (34.0) % 34.0 %
State income taxes 11.3 17.2 6.7
Effect of foreign operations 8.9 43.5 2.5
Other items, net (3.2) 2.2 .4
------- ------- -------
Effective tax rate (17.0) % 28.90 % 43.60 %
======== ======= =======
</TABLE>
I. RELATED-PARTY TRANSACTIONS
The Company is charged certain corporate fees from AI.
These fees totaled $1,000, $2,000 and $1,983 in 1995, 1994 and
1993, respectively, and have been included in the financial
statements as a component of selling and administrative expense. In
December 1993, the Company advanced AI $1,718. An additional $115 was
advanced during 1994 and $103 of interest was accrued at December 30,
1995. These amounts mature over ten years and bear interest at 5.8%.
The fair value of the note is $1,005 estimated by discounting future
cash flows using current rates of interest at which similar loans would
be made to borrowers with similar credit ratings.
The Company leases certain assets from a related party under
operating leases expiring in 1996. Rental expense was $339 in 1995 and
$276 in 1994 and 1993.
J. COMMITMENTS AND CONTINGENCIES
The Company is a party to a number of lawsuits and claims arising
in the normal course of its business including proceedings with respect
to environmental matters, including sites where the Company has been
identified as a potentially responsible party under federal and state
environmental laws and regulations. Although the outcome of these
matters cannot be determined at the present time, the Company has
established accruals which management believes adequately provide for
all future costs that are expected to be incurred in settling these
matters not covered by insurance.
It is the opinion of management, after consultation with counsel,
that additional liabilities, if any, resulting from these matters are
not expected to have a material adverse effect on the financial
condition of the Company, although such matters could have a material
effect on annual results of operations when resolved in a future period.
K. SUBSEQUENT EVENT
On April 3, 1996, the parent company's capital stock was sold to
Excel Industries, Inc. Upon completion of the sale, compensation
agreements totaling $445 will be paid to members of Atwood's management.
The revolving line of credit was repaid upon acquisition of the parent
company, with Excel obtaining a new revolving line of credit agreement
on a long-term basis.
<PAGE>
On April 3, 1996, the Registrant acquired all of the outstanding capital
stock of Anderson. Anderson's only operating asset is
Atwood, its wholly owned subsidiary. Under the terms of the
Agreement, all non-operating assets of Anderson totaling
approximately $1 million were immediately repurchased by the
former shareholders of Anderson. The proforma balance sheet
and income statement presented on the following pages combine
the accounts of the Registrant and Atwood as of and for the
fiscal year ending December 31, 1995.
Excel Industries, Inc.
Pro-Forma Balance Sheet
(Amounts in thousands)
<TABLE>
<CAPTION>
Atwood
assets acquired
Excel and liabilities Pro-forma Adjustments
as reported assumed Debit Credit Adjusted
<S> <C> <C> <C> <C> <C>
Assets
Current assets:
Cash and short-term
investments $ 391 $ $ $ $ 391
Marketable
securities 37,416 30,259(1) 7,157
Accounts receivable 85,751 58,118 143,869
Customer tooling
to be billed 26,090 6,268 32,358
Inventories 27,298 26,659 1,648(2) 55,605
Prepaid expenses 7,018 7,622 568(9) 14,072
----------- --------- ------- -------- -------
Total current assets 183,964 98,667 1,648 30,827 253,452
Property, plant and
equipment 68,997 67,628 24,602(3) 161,227
Goodwill and other
intangible assets 6,356 12,103 25,935(1) 8,411(1) 35,983
Other assets 10,201 2,521 359(4) 7,156
836(6)
4,371(9)
----------- --------- --------- -------- -------
Total assets $ 269,518 $ 180,919 $ 52,185 $ 44,804 $ 457,818
========= ========= ========= ========= ========
Liabilities and
Shareholders' Equity
Current liabilities:
Accounts payable $ 57,811 $ 30,939 $ $ $ 88,750
Accrued liabilities 25,536 11,530 1,250(7) 39,043
727(1)
Current maturities
of long-term debt 9,164 77,893 1,250(7) 9,976
75,831(8)
----------- --------- ------- -------- -------
Total current
liabilities 92,511 120,362 77,081 1,977 137,769
Long-term debt 24,021 14,608 5,100(7) 26,977(1) 136,337
75,831(8)
Other long-term
liabilities 18,669 18,883 3,335(5) 1,727(4) 47,895
6,890(7)
4,061(9)
1,000(1)
Commitments and
contingent liabilities 0
Shareholders' equity:
Common shares-
no par value 95,157 27,604 27,604(1) 95,157
Warrants outstanding 1,500(1) 1,500
Retained earnings 44,412 44,412
Minimum pension
liability adjustment,
net of tax (659) (538) 538(4) (659)
Treasury shares at cost (4,593) (4,593)
----------- --------- ------- -------- -------
Total shareholders'
equity 134,317 27,066 27,604 2,038 135,817
Total liabilities and
shareholders' equity $269,518 $180,919 $113,120 $120,501 $457,818
======== ======== ======== ======== ========
</TABLE>
Description of pro-forma adjustments:
1 Record estimated purchase price of Atwood and eliminate $8,411 of
goodwill recorded in Atwood's historical financial statements.
2 Write-up inventory to current value.
3 Record revaluation of fixed assets.
4 Record unrecognized actuarial amounts for Atwood pension plans.
5 Record unrecognized actuarial amounts for Atwood's postemployment
benefit plans other than pensions.
6 Write-down note receivable from Anderson Industries, Inc. to agreed
upon repayment amount.
7 Record product recall liability at gross value of $8,140 and to
reclassify from debt to accruals.
8 Reclassify debt according to terms of new agreement.
9 Record tax impact of the above adjustments.
Excel Industries, Inc.
Pro-Forma Statement of Income
Fiscal Year Ended December 30, 1995
(Amounts in thousands, except per share amounts)
<TABLE>
<CAPTION>
Pro-forma
Excel Atwood Pro-forma Adjustments Income
as reported Historic Debit Credit Statement
<S> <C> <C> <C> <C> <C>
Net Sales $ 596,014 $ 399,789 $ $ $ 995,803
Cost and Expenses:
Cost of goods sold 540,716 360,994 1,990(3) 903,700
Selling, administrative
and engineering expenses 32,973 35,648 800(2) 359(1) 67,769
26(8) 336(7)
983(9)
Disposal of Canadian
facility (1,582) (1,582)
Interest expense 3,322 8,514 7,780(5) 7,987(4) 11,629
Other income, net (3,805) (94) 1,059(6) (2,840)
--------- --------- ----- ------ --------
Total costs
and expenses 571,624 405,062 11,655 9,665 978,676
Income (loss) before
income taxes and
cumulative
effect of changes
in accounting 24,390 (5,273) 11,655 9,665 17,127
Provision (benefit)
for income taxes 8,125 (895) 173(10) 7,403
--------- --------- ----- ------ --------
Net income before
cumulative effect
of changes in
accounting $ 16,265 $ (4,378) $ 11,828 $ 9,665 $ 9,724
========= ========= ======== ======= =======
Net income before
cumulative effect
of accounting
changes per share:
Primary $ 1.52 $ 0.91
Fully diluted $ 1.41 $ 0.88
Average number
of shares:
Primary 10,690 10,690
Fully diluted 12,960 12,960
</TABLE>
Description of pro-forma adjustments:
1 Eliminate goodwill amortization included in Atwood's historical
financial statements.
2 Record amortization of goodwill resulting from Excel's acquisition
of Atwood. Goodwill is being amortized on a straight line basis
over a thirty-five year period.
3 Record additional depreciation resulting from the write-up of
fixed assets to the estimated fair value.
4 Eliminate interest expense in the historical accounts of Atwood.
5 Record additional interest expense on borrowings resulting from
Excel's acquisition of Atwood.
6 Eliminate estimated lost investment income due to liquidating
marketable securities to pay a portion of the acquisition costs.
7 Eliminate write-off of deferred debt issuance costs included in
Atwood's historical financial statements.
8 Record amortization of deferred debt issuance costs resulting
from Excel's acquisition of Atwood.
9 Eliminate management fees paid to Anderson Industries, Inc.
recorded in Atwood's historical financial statements.
10 Record the tax impact of the above adjustments.
<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 Amended and Restated Credit Agreement dated
April 29, 1996 among Excel Industries, Inc.,
certain banks, Society National Bank as agent
and Harris Trust and Savings Bank as co-agent
4.3 Form of Note Purchase Agreement dated
May 3, 1996 between Excel Industries, Inc. and
each of several institutional investors.
23 Consent of Coopers & Lybrand L.L.P.
* Previously filed.
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
Amended and Restated
Credit Agreement
dated as of
April 29, 1996
___________________________________________
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 AND
LETTERS OF CREDIT. 10
2.1. Revolving Advances, Swing Line Advances
and Letters of Credit 10
2.2. Procedures for Making Advances and Issuance
of Letters of Credit 12
2.3. Fees . . . . . . . . . . . . . . . . . . . . . . . . 15
2.4. Reduction of the Commitments . . . . . . . . . . . . 16
2.5. Repayment of the Revolving Advances
and the Swing Line Advances 17
2.6. Interest on Advances . . . . . . . . . . . . . . . . 17
2.7. Interest Rate Determination. . . . . . . . . . . . . 18
2.8. Prepayments of Advances. . . . . . . . . . . . . . . 18
2.9. Increased Costs. . . . . . . . . . . . . . . . . . . 18
2.10.Payments and Computations. . . . . . . . . . . . . . 19
2.11.Taxes. . . . . . . . . . . . . . . . . . . . . . . . 21
2.12.Sharing of Payments, etc.. . . . . . . . . . . . . . 22
2.13.Evidence of Debt . . . . . . . . . . . . . . . . . . 22
2.14.Obligations Absolute . . . . . . . . . . . . . . . . 23
SECTION 3.CONDITIONS.. . . . . . . . . . . . . . . . . . . . . 23
3.1. Conditions Precedent at Restatement Effective Date.. 23
3.2.Conditions Precedent to Each Extension of Credit . . 24
SECTION 4.REPRESENTATIONS AND WARRANTIES.. . . . . . . . . . . 24
4.1. Representations and Warranties of the Borrower . . . 24
SECTION 5.COVENANTS OF THE BORROWER. . . . . . . . . . . . . . 27
5.1. Affirmative Covenants. . . . . . . . . . . . . . . . 27
5.2. Negative Covenants . . . . . . . . . . . . . . . . . 31
SECTION 6.EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . 36
6.1. Events of Default. . . . . . . . . . . . . . . . . . 36
SECTION 7.THE AGENT. . . . . . . . . . . . . . . . . . . . . . 38
7.1. Authorization and Action . . . . . . . . . . . . . . 38
7.2. Agent's Reliance, etc. . . . . . . . . . . . . . . . 38
7.3. Society and Affiliates . . . . . . . . . . . . . . . 38
7.4. Lender Credit Decision . . . . . . . . . . . . . . . 39
7.5. Indemnification. . . . . . . . . . . . . . . . . . . 39
7.6. Successor Agent. . . . . . . . . . . . . . . . . . . 39
7.7. Agent's Fee. . . . . . . . . . . . . . . . . . . . . 39
7.8. Co-Agent . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . 39
8.1. Amendments, etc. . . . . . . . . . . . . . . . . . . 39
8.2. Notices, etc.. . . . . . . . . . . . . . . . . . . . 40
8.3. No Waiver; Remedies. . . . . . . . . . . . . . . . . 40
8.4. Costs, Expenses and Taxes. . . . . . . . . . . . . . 40
8.5. Right of Set-off . . . . . . . . . . . . . . . . . . 41
8.6. Binding Effect. . . . . . . . . . . . . . . . . . . 41
8.7. Assignments and Participations . . . . . . . . . . . 41
8.8. Governing Law. . . . . . . . . . . . . . . . . . . . 43
8.9. Limitations on Liability of the Issuing Bank . . . . 43
8.10.Collateral . . . . . . . . . . . . . . . . . . . . . 43
8.11.Survival of Warranties and Agreements. . . . . . . . 44
8.12.Limitation of Liability. . . . . . . . . . . . . . . 44
8.13.No Duty. . . . . . . . . . . . . . . . . . . . . . . 44
8.14.Lenders and Agent Not Fiduciary to Borrower, etc.. . 44
8.15.Confidentiality. . . . . . . . . . . . . . . . . . . 44
8.16.Certain Consents and Waivers of the Borrower. . . . 44
8.17.Waiver of Jury Trial . . . . . . . . . . . . . . . 45
8.18.Execution in Counterparts. . . . . . . . . . . . . 45
Schedule I - Information as to Lenders
Schedule II - Schedule of Existing Liens
Schedule III - Schedule of Existing Debt
Schedule IV - Schedule of Outstanding Letters of Credit
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
AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 29,
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 ("Harris"), as
co-agent (together with any successor co-Agent appointed hereunder, the
"Co-Agent") for the Lenders hereunder:
PRELIMINARY STATEMENTS:
(1) The parties hereto entered into a Credit Agreement, dated as
of April 1, 1996 (the "Original Agreement").
(2) The parties hereto desire to amend and restate in its
entirety the Original Agreement in order, among other things, to provide
for a letter of credit subfacility of up to $10,000,000 as part of the
Commitments hereunder.
NOW, THEREFORE, the parties hereto hereby amend and restate the
Original Agreement in its entirety as provided herein and hereby 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 of the
Original Agreement 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 of
the Original Agreement 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" means April 3, 1996, which was the date on which the
Agent received the documents specified in or pursuant to section 3.1 of
the Original Agreement and the conditions specified in section 3.1 of
the Original Agreement were 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 he 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 nd 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 thesale 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, (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, and (F) net loss 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 excluded from such Consolidated Net Income;
(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 April 1, 1996 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.
"Issuing Bank" means Society, as the issuer of Letters of Credit
hereunder, and its successors and assigns in such capacity, except that
with reference to letters of credit previously issued by Harris and
deemed issued hereunder as Letters of Credit pursuant to the provisions
of section 2.2(d)(v), the term Issuing Bank means Harris and its
successors and assigns.
"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 and a Lender in
its capacity as the Issuing Bank.
"Letter of Credit" has the meaning specified in section
2.1(e).
"Letter of Credit Commitment" has the meaning specified in section
2.1(e).
"Letter of Credit Document" has the meaning specified in section
2.14.
"Letter of Credit Facility" has the meaning specified in section
2.1(e).
"Letter of Credit Participation Fee" has the meaning specified in
section 2.3(c).
"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) each Letter of Credit Document, (vii) 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 (viii)
all other written agreements between any Loan Party and the Agent or any
Lender delivered to the Agent or such Lender pursuant to or in
connection with this Agreement.
"Loan Party" means the Borrower or any of its Subsidiaries which
has executed and delivered any Loan Document to or for the benefit of
the Agent and the Lenders in connection herewith.
"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 Issuance" has the meaning specified in section
2.2(d).
"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.
"Original Agreement" has the meaning specified in the Preliminary
Statements hereof.
"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, 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.
"Restatement Effective Date" has the meaning specified in section
8.6.
"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 AND LETTERS OF CREDIT.
2.1. Revolving Advances, Swing Line Advances and Letters of Credit.
(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"), less the sum of (i) such Lender's pro rata share
of the aggregate maximum amount available to be drawn under all Letters
of Credit then outstanding (assuming compliance with all requirements
for drawing), plus (ii) such Lender's pro rata share of the aggregate
amount, if any, drawn under Letters of Credit which have been honored,
as to which reimbursement obligations have not as of such time either
been paid directly or out of the proceeds of Revolving Advances;
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.
(e) Subject to the terms and conditions of this Agreement, upon
request by the Borrower, (i) the Issuing Bank shall issue standby and
documentary letters of credit (each a "Letter of Credit") for the
account of the Borrower, and (ii) the Issuing Bank may in its discretion
(but only with the prior consent of all of the Lenders) issue Letters of
Credit for the account of any of the Borrower's Subsidiaries, in each
case from time to time on any Business Day during the period from the
Restatement Effective Date until 30 Business Days prior to the
Termination Date (A) in an aggregate maximum amount available to be
drawn under all Letters of Credit then outstanding (assuming compliance
with all requirements for drawing) not to exceed at any time $10,000,000
(such amount, as the same may be reduced pursuant to section 2.4, being
the Issuing Bank's "Letter of Credit Commitment", the amount of the
Letter of Credit Commitment of the Issuing Bank being the "Letter of
Credit Facility"), and (B) in a maximum amount available to be drawn
under any Letter of Credit to be issued on any date (assuming compliance
with all requirements for drawing) not to exceed the sum of (1) the
unused portion of the Commitments as of such date, plus (2) the
aggregate principal amount of the Swing Line Advances then outstanding.
Each issuance of a Letter of Credit shall be deemed to utilize the
Letter of Credit Commitment of the Issuing Bank by an amount equal to
the maximum available to be drawn under such Letter of Credit (assuming
compliance with all requirements for drawing). Immediately upon the
issuance of each Letter of Credit, the Issuing Bank shall be deemed to
have sold and transferred to each Lender, and each Lender shall be
deemed to have purchased and received from the Issuing Bank, in each
case irrevocably and without any further action by any party, an
undivided interest and participation in such Letter of Credit, each
drawing thereunder, the obligations of the Borrower under this
Agreement in respect thereof and the obligations of any Subsidiary in
respect of the Letter of Credit Documents related thereto, in an amount
equal to the product of (x) a fraction the numerator of which is the
amount of the Commitment of such Lender and the denominator of which is
the aggregate amount of all Commitments times (y) the maximum amount
available to be drawn under such Letter of Credit (assuming compliance
with all requirements for drawing). No Letter of Credit shall have an
expiration date (including all rights of the Borrower or any Subsidiary
or the beneficiary to require renewal) later than two years from the
date of issuance or an expiration date later than the Termination Date,
whichever is earlier. Within the limits of the Letter of Credit
Facility, and subject to the provisions hereof, the Borrower may request
(for its own account or, subject to the discretion of the Issuing Bank
and the consent of all of the Lenders referred to above, for the account
of any Subsidiary) the issuance of Letters of Credit under this section
2.1(e), prepay any Revolving Advances resulting from drawings thereunder
pursuant to section 2.8 and request the issuance of additional Letters
of Credit (for its own account or for the account of any Subsidiary)
under this section 2.1(e).
2.2. Procedures for Making Advances and Issuance of Letters of
Credit. (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) (i) Each Letter of Credit shall be issued upon notice, given
not later than 12:00 noon (Cleveland, Ohio time) on the third Business
Day prior to the date of the proposed issuance of such Letter of Credit,
by the Borrower to the Issuing Bank and the Agent. Each such notice by
the Borrower of the requested issuance of a Letter of Credit (a "Notice
of Issuance"), whether for the account of the Borrower or for the
account of any Subsidiary, shall be by telephone, telex, telecopier or
cable, confirmed immediately in writing, accompanied by a properly
completed application for the issuance of a letter of credit (in the
form supplied by the Issuing Bank from time to time) and such
reimbursement agreements and other documents and materials as may be
contemplated thereby, specifying therein the requested (A) date of such
issuance (which shall be a Business Day), (B) maximum amount of such
Letter of Credit, (C) expiration date of such Letter of Credit, (D) name
and address of the beneficiary of such Letter of Credit, and (E) nature
(i.e., standby or documentary) of such Letter of Credit. If the
requested issuance of such Letter of Credit conforms to the requirements
of this Agreement and any applicable Requirements of Law, the Issuing
Bank will, unless the Issuing Bank has received notice from any Lender
that an Event of Default has occurred and is continuing, but subject to
the terms and conditions of this Agreement, issue such Letter of Credit
and make it available to the Borrower at its office referred to in
section 8.2 or as otherwise agreed with such Borrower in connection with
such issuance. Any amendment to an outstanding Letter of Credit
requested by the Borrower which extends the expiration date thereof (or
any renewal, extension or similar rights of the beneficiary) or which
increases the maximum amount of such Letter of Credit shall for all
purposes of this Agreement be deemed the issuance of a Letter of Credit.
(ii) The Borrower will pay or cause to be paid to the Issuing Bank,
in immediately available funds, on the date of each drawing under any
Letter of Credit issued for the account of the Borrower, all
reimbursement obligations in respect of such Letter of Credit,
irrespective of any claim, set-off, defense or other right which the
Borrower or any Subsidiary may have against the Issuing Bank, any
Lender, or any other person. Such payment, if not so made by the
Borrower out of its own funds, may be made out of the proceeds of a
Revolving Advance to the Borrower made as provided in section
2.2(d)(iv). In the case of any Letter of Credit issued for the account
of any Subsidiary of the Borrower, the applicable Letter of Credit
Documents shall provide that such Subsidiary will pay or cause to be
paid to the Issuing Bank, in immediately available funds, on the date of
each drawing under such Letter of Credit, all reimbursement obligations
in respect of such Letter of Credit when due, irrespective of any claim,
set-off, defense or other right which the Borrower or any Subsidiary may
have against the Issuing Bank, any Lender, or any other person.
(iii) The Issuing Bank shall promptly notify the Agent (and the
Agent shall promptly notify the Lenders) of the issuance of any Letter
of Credit. The Issuing Bank will notify the Agent and the other Lenders
promptly of any increase or decrease in the maximum amount available to
be drawn under all Letters of Credit outstanding from time to time
(assuming compliance with all requirements for drawing).
(iv) The payment by the Issuing Bank of a draft drawn under any
Letter of Credit issued for the account of the Borrower shall constitute
for all purposes of this Agreement the making of a Revolving Advance to
the Borrower on the date such draft is drawn in the amount of such draft
(but without any requirement for compliance with the provisions of
sections 2.1 and 2.2 or the conditions set forth in section 3), if such
drawing is not reimbursed by the Borrower in immediately available funds
on the day of such drawing. In the event such reimbursement is not made
as provided above, the Issuing Bank shall promptly notify each other
Lender and the Agent. Each such Lender shall, on the same Business Day
(if such notification is received by it on a Business Day prior to 12:00
noon (Cleveland, Ohio time), or by 1:00 P.M. (Cleveland, Ohio time) on
the next Business Day (if such notification is received by it on a date
which is not a Business Day or is received by it on a Business Day after
12:00 P.M. Cleveland, Ohio time), make a Revolving Advance (which shall
be considered a Prime Rate Advance and a Revolving Borrowing by the
Borrower) in an amount equal to the amount of its participation in such
drawing for application to reimburse the Issuing Bank (but without any
requirement for compliance with the provisions of sections 2.1 and 2.2
or the conditions set forth in section 3 and without regard to whether
the Commitments have previously been terminated) and shall make
available for the account of its Lending Office to the Agent for the
account of the Issuing Bank, by deposit to the Agent's account, in same
day funds, the amount of such Revolving Advance. If and to the extent
that any Lender shall not have so made the amount of such Revolving
Advance available to the Agent, such Lender and the Borrower severally
agree to pay to the Agent forthwith on demand such amount together with
interest thereon, for each day from the date of demand by the Issuing
Bank until the date such amount is paid to the Agent, at (i) in the case
of the Borrower, the interest rate applicable at such time under section
2.6(i), and (ii) in the case of such Lender, the Federal Funds Rate. If
such Lender shall pay to the Agent such amount, such amount so paid
shall constitute a Revolving Advance by such Lender for purposes of this
Agreement.
(v) Schedule IV hereto contains an identification of certain
letters of credit issued for the account of the Borrower and certain of
its Subsidiaries by Society and Harris prior to the Restatement
Effective Date. Each of the Lenders and the Borrower acknowledges and
agrees that upon the Restatement Effective Date (A) such letters of
credit shall be deemed to be Letters of Credit issued hereunder, subject
to the terms and provisions of this Agreement, and (B) the Borrower
shall have all obligations hereunder in respect of such Letters of
Credit and Society or Harris, as the case may be, shall be deemed to be
the Issuing Bank in respect thereof.
(vi) The Borrower will use its best efforts to promptly arrange for
the issuance, subject to the terms and conditions of this Agreement, of
Letters of Credit for the account of the Borrower, in substitution for
those Letters of Credit listed on Schedule IV under the heading "Letters
of Credit to be Replaced", and which, pursuant to the provisions of
section 2.2(d)(v), are deemed issued hereunder on the Restatement
Effective Date.
(e) 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.
(f) 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.
(g) 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 has paid to the Agent on the
effective date of the Original Agreement as provided in section 8.6
thereof 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
the Original Agreement as provided in section 8.6 thereof 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.
(c) The Borrower agrees to pay to the Agent for the pro rata
account of each Lender a nonrefundable letter of credit participation
fee (a "Letter of Credit Participation Fee"), computed on the maximum
amount available to be drawn under all Letters of Credit issued and
outstanding for the account of the Borrower or any of its Subsidiaries
(assuming compliance with all requirements for drawing) during the
period from and including the Restatement Effective Date until no
Letters of Credit shall be issued and outstanding hereunder and the
Termination Date shall have occurred. The Letter of Credit Participation
Fee shall be payable as follows:
(i) in the case of the issuance after the Restatement
Effective Date of any Letter of Credit, or the increase after the
Restatement Effective Date in the maximum amount of any Letter of Credit
(assuming compliance with all requirements for drawing), the Letter
of Credit Participation Fee shall be payable with respect thereto
on the date of issuance or increase, as applicable, for the period from
the date of issuance or increase to the last day of the then
current calendar quarter (or shorter period ending with the
scheduled expiration date thereof (assuming exercise of any renewal or
extension rights)); and
in the case of any Letters of Credit outstanding on the
Restatement Effective Date or on the last day of any calendar
quarter thereafter, the Letter of Credit Fee shall be payable with
respect thereto on the Restatement Effective Date, in the case of
Letters of Credit outstanding or deemed outstanding on the
Restatement Effective Date, for the period from the Restatement
Effective Date to the end of the current calendar quarter (or
shorter period ending with the scheduled expiration date thereof
(assuming exercise of any renewal or extension rights)), and
thereafter quarterly in advance on the last day of each calendar
quarter, commencing June 30, 1996, in the case of any Letters of Credit
outstanding on such date, for the next succeeding calendar quarter
(or shorter period ending with the scheduled expiration datethereof
(assuming exercise of any renewal or extension rights));
in each case at a fluctuating rate equal to, in the case of the period
commencing on the Restatement Effective Date, the Applicable Eurodollar
Rate Margin per annum in effect at the Restatement Effective Date, and
in the case of any other time or period, at a fluctuating rate equal to
the Applicable Eurodollar Rate Margin per annum in effect at such time
or the commencement of such period, as the case may be. In the case of
Letters of Credit deemed issued hereunder on the Restatement Effective
Date as provided in section 2.2(d)(v), such Letters of Credit will on
the Restatement Effective Date be included in computations of the Letter
of Credit Participation Fee; accordingly, on or immediately following
the Restatement Effective Date, Society, Harris and the Borrower will
settle among themselves their respective accounts in respect of
issuance or similar fees for such Letters of Credit which have been paid
or were payable prior to the Restatement Effective Date under the
applicable documents with respect thereto (other than this Agreement),
and the Borrower will simultaneously cause each applicable Subsidiary to
settle its similar accounts with Harris.
(d) The Borrower shall pay to the Issuing Bank, for its own
account, (i) upon each issuance, negotiation, acceptance, transfer or
amendment of a Letter of Credit the normal and customary fee or fees, as
the case may be, then being charged by the Issuing Bank for the
issuance, negotiation, acceptance, transfer or amendment of letters of
credit, or such lesser or greater fee or fees in respect thereof as may
be agreed upon between the Borrower and the Issuing Bank; and (ii) on
demand, sums equal to any and all reasonable charges and expenses for
telex, delivery or other services that the Issuing Bank may from time to
time impose, pay or incur relative to the issuance of the Letters of
Credit issued for the account of the Borrower (or any Subsidiary), or to
presentment to, or to a payment by, the Issuing Bank thereunder.
2.4. Reduction of the 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) no such reduction shall reduce the Commitments below the
sum of the aggregate principal amount of the Revolving Advances then
outstanding, plus the maximum aggregate amount available to be drawn
under all outstanding Letters of Credit (assuming compliance with all
requirements for drawing), plus the amount of the unused Letter of
Credit Commitment, plus 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) 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 portion of the Letter of Credit
Commitment of the Issuing Bank; 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.
(d) 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 orrower
and the Agent by such Lender shall be conclusive and binding for all
purposes, in the absence of manifest error.
(c) If any of the events referred to in clauses (i) and (ii) of
section 2.9(a) shall either (i) impose, modify or deem applicable any
reserve, special deposit or similar requirement against letters of
credit issued by, or assets held by, or deposits in or for the ccount
of the Issuing Bank or any Lender, or (ii) impose on the Issuing Bank or
any Lender any other condition regarding this Agreement or such Lender,
in either case as it pertains to the Letters of Credit or any Letter of
Credit, and the result of any event referred to in the preceding clause
(i) or (ii) shall be to increase the cost to the Issuing Bank of issuing
or maintaining any Letter of Credit or to any Lender of purchasing any
participation therein (which increase in cost shall be determined by the
Issuing Bank's or such Lender's, as the case may be, reasonable
allocation of the aggregate of such cost increases resulting from such
event), then, upon demand by the Issuing Bank or such Lender, the
Borrower shall immediately pay to the Issuing Bank or such Lender, from
time to time as specified by the Issuing Bank or such Lender, additional
amounts that shall be sufficient to compensate the Issuing Bank or such
Lender for such increased cost. A certificate as to such increased cost
incurred by the Issuing Bank or such Lender as a result of any event
mentioned in clause (i) or (ii) above and identifying the event giving
rise thereto, submitted by the Issuing Bank or such Lender to the
Borrower in good faith, shall, in the absence of manifest error, be
conclusive as to the amount thereof.
(d) Except as provided in this subsection (d), 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 or other 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 and Letter of Credit Participation 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 or Letter of Credit
Participation 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.
2.14.Obligations Absolute. The obligations of the Borrower under
this Agreement in respect of any Letter of Credit issued for the account
of the Borrower and under any other agreement or instrument
relating to
any such Letter of Credit shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this
Agreement
(as the same may be amended from time to time) and such other
agreement
or instrument under all circumstances, including, without
limitation, to
the extent permitted by law, the following circumstances (except as
limited by section 8.9):
(i) any lack of validity or enforceability of any Letter of
Credit or any other agreement or instrument relating thereto
(collectively, the "Letter of Credit Documents") or any other Loan
Document;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the obligations of the
Borrower
(or any Subsidiary) in respect of the Letters of Credit or any
other
amendment or waiver of or any consent to departure from all or any of
the Letter of Credit Documents or any other Loan Document;
(iii)any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or
consent to
departure from any guaranty, for all or any of the obligations of the
Borrower (or any Subsidiary) in respect of the Letters of
Credit;
(iv) the existence of any claim, set-off, defense or
other
right that the Borrower (or any Subsidiary) may have at any time
against any beneficiary or any transferee of a Letter of Credit (or any
persons for whom any such beneficiary or any such transferee may be
acting), the Issuing Bank, or any other person, whether in
connection with the Loan Documents, the transactions contemplated hereby
or by the Letter of Credit Documents or any unrelated
transaction;
(v) any statement or any other document presented under or in
connection with any Letter of Credit or other Loan Document proving
to be forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any respect,
provided that payment by the Issuing Bank under such Letter of
Credit against presentation of such statement or document shall not have
constituted gross negligence or willful misconduct;
(vi) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not comply
with the terms of the Letter or Credit, except any such payment
resulting solely from the gross negligence or willful
misconduct of
the Issuing Bank; and
(vii)any other circumstance or happening whatsoever other than
the payment in full of all obligations hereunder in respect of any
Letter of Credit or any agreement or instrument relating to any
Letter of Credit, whether or not similar to any of the foregoing, that
might otherwise constitute a defense available to, or a
discharge
of, the Borrower.
SECTION 3.CONDITIONS.
3.1. Conditions Precedent at Restatement Effective Date. On or
prior to the Restatement Effective Date the following conditions shall
be satisfied (a) all fees and expenses and other amounts payable to the
Agent, for its own account or for the account of the Lenders,
pursuant
to the Original Agreement on or prior to the Restatement Effective Date
shall have been paid in full; and (b) the Agent shall have received on
or before the Restatement Effective Date the following, each 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, in exchange for
the Revolving Note issued to such Lender pursuant to the Original
Agreement.
(ii) A Swing Line Note payable to the order of each Swing Line
Lender in the principal amount of such Lender's Swing Line
Commitment, in exchange for the Swing Line Note issued to such
Lender pursuant to the Original Agreement.
(iii)A certificate of the Secretary or an Assistant
Secretary
of the Borrower, dated the Closing Date, certifying (A) 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, and (B) 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.
(iv) A Subsidiary Guaranty of each of Anderson
Industries,
Inc. and Atwood Industries, Inc., amending and restating in its
entirety the Subsidiary Guaranty previously executed and delivered by
such person.
(v) 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 Extension of Credit. The
obligation of each Lender to make an Advance on the occasion of
each
Borrowing (including the initial Borrowing) and the obligation of the
Issuing Bank to issue any Letter of Credit shall be subject to the
further conditions precedent that the Agent shall have received the
Notice of Borrowing or Notice of Issuance with respect thereto and that
on the date of such Borrowing or such issuance of a Letter of
Credit (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, or the giving of the applicable Notice of
Issuance and the issuance of the Letter of Credit related thereto, as
the case may be, shall constitute a representation and warranty by the
Borrower that on the date of such Borrowing or the issuance of such
Letter of Credit, as the case may be, 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 30, 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 30, 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 30, 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. The transactions contemplated by the Stock
Purchase Agreement were consummated on April 3, 1996.
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
Letters of Credit and 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; and unsecured Debt of the Borrower owed to any of
its Wholly-Owned Subsidiaries, provided that such Debt is
subordinated
to the Notes and the other obligations of the Borrower under
the Loan Documents pursuant to subordination provisions
satisfactory in form and substance to the Majority Lenders;
(vi) 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 (vii) and (viii) below, does not
(without duplication) exceed 15% of Consolidated Net Worth;;
(vii)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 (vi) above and clause (viii) below,
does not
(without duplication) exceed 15% of Consolidated Net Worth;
(viii)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), (vi) and (vii)
above, does not (without duplication) exceed 15% of
Consolidated Net Worth; and
(ix) 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 its fiscal
quarter ended closest to March 31, June 30, September 30 and
December 31 in each year, commencing with its fiscal quarter ended
closest to June 30, 1996, the ratio of (i) Consolidated EBIT of the
Borrower and its Consolidated Subsidiaries during the
twelve-month
period ending on the last day of such fiscal quarter 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 29, 1997; (2) 55% at any time
thereafter
through its fiscal quarter ended closest to 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 29, 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 28, 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
reimbursement obligation in respect of any Letter of Credit issued for
the account of the Borrower when the same shall be due and
payable,
or shall fail to pay interest on any Note or any other amount
payable under this Agreement or any of the other Loan Documents
within
five days of the due date thereof; or any Subsidiary shall
fail to
pay any reimbursement obligation in respect of any Letter of Credit
issued for the account of such Subsidiary when the same shall be due and
payable, or shall fail to pay any other amount payable under any
Loan Document to which it is a party within five days of the due
date thereof;
(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 or any other Loan Party 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 obligations of each Lender and the
Issuing
Bank to make Advances and to issue Letters of Credit 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 and the Issuing Bank to make Advances and to
issue Letters of Credit 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 on the
date (the "Restatement Effective Date") 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 the
conditions
specified in section 3.1 hereof shall have been satisfied, 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. Limitations on Liability of the Issuing Bank. The
Borrower
assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such
Letters of Credit. Neither the Issuing Bank nor any of its
officers or
directors shall be liable or responsible for: the use which may be
made of any Letter of Credit or any acts or omissions of any
beneficiary
or transferee in connection therewith; (b) the validity,
sufficiency or
genuineness of documents, or of any endorsement thereon, even if such
documents should prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by the Issuing Bank
against presentation of documents that do not comply with the terms of
a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to such Letter of Credit; or (d) any
other circumstances whatsoever in making or failing to make payment
under any Letter of Credit, except that the Borrower shall have a claim
against the Issuing Bank, and the Issuing Bank shall be liable to the
Borrower, to the extent of any direct, but not consequential,
damages
suffered by the Borrower which the Borrower proves were caused by (i)
the Issuing Bank's willful misconduct or gross negligence in
connection
with a Letter of Credit or (ii) the Issuing Bank's willful failure to
make lawful payment under any Letter of Credit after the
presentation to
it of documentation strictly complying with the terms and
conditions of
such Letter of Credit. In furtherance and not in limitation of the
foregoing, the Issuing Bank may accept documents that appear on
their
face to be in order, without responsibility for further
investigation.
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.
8.18.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.
[The balance of this page is intentionally blank.]
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
EXCEL INDUSTRIES, INC.
$100,000,000
7.78% Senior Notes due April 30, 2011
NOTE PURCHASE AGREEMENT
Dated May 3, 1996
<PAGE>
TABLE OF CONTENTS
Section Page
1. AUTHORIZATION OF NOTES. . . . . . . . . . . . . .1
2. SALE AND PURCHASE OF NOTES. . . . . . . . . . . .1
3. CLOSING . . . . . . . . . . . . . . . . . . . . .2
4. CONDITIONS TO CLOSING . . . . . . . . . . . . . .2
4.1. Representations and Warranties . . . . 2
4.2. Performance; No Default. . . . . . . . 2
4.3. Compliance Certificates. . . . . . . . 3
4.4. Opinions of Counsel. . . . . . . . . . 3
4.5. Purchase Permitted By Applicable
Law, etc. . . . . . . . . . . . . . . 3
4.6. Sale of Other Notes. . . . . . . . . . 3
4.7. Payment of Special Counsel Fees. . . . 3
4.8. Private Placement Number . . . . . . . 4
4.9. Changes in Corporate Structure . . . . 4
4.10. Execution and Delivery of
Certain Documents . . . . . . . . . . 4
4.11. Credit Agreement and Subordinated Debt
Agreement. . . . . . . . . . . . . . . 4
4.12. Proceedings and Documents . . . . . . .4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY . .5
5.1. Organization; Power and Authority. . . 5
5.2. Authorization, etc.. . . . . . . . . . 5
5.3. Disclosure . . . . . . . . . . . . . . 5
5.4. Organization and Ownership of
Shares of Subsidiaries; Affiliates . . 6
5.5. Financial Statements . . . . . . . . . 6
5.6. Compliance with Laws, Other
Instruments, etc.. . . . . . . . . . . 7
5.7. Governmental Authorizations, etc.. . . 7
5.8. Litigation; Observance of Agreements,
Statutes and Orders . . . . . . . . . .7
5.9. Taxes. . . . . . . . . . . . . . . . . 7
5.10. Title to Property; Leases . . . . . . .8
5.11. Licenses, Permits, etc. . . . . . . . .8
5.12. Compliance with ERISA . . . . . . . . .9
5.13. Private Offering by the Company . . . 10
5.14. Use of Proceeds; Margin Regulations . 10
5.15. Existing Debt; Future Liens . . . . . 10
5.16. Foreign Assets Control Regulations,
etc.. . . . . . . . . . . . . . . . . 11
5.17. Status under Certain Statutes . . . . 11
5.18. Environmental Matters . . . . . . . . 11
5.19. Status as Senior Debt . . . . . . . . 12
6. REPRESENTATIONS OF THE PURCHASER. . . . . . . . 12
6.1. Purchase for Investment. . . . . . . .12
6.2. Source of Funds. . . . . . . . . . . .12
7. INFORMATION AS TO COMPANY . . . . . . . . . . . 13
7.1. Financial and Business Information . .13
7.2. Officer's Certificate. . . . . . . . .16
7.3. Inspection . . . . . . . . . . . . . .17
7.4. Information Required by Rule 144A. . .17
8. PREPAYMENT OF THE NOTES . . . . . . . . . . . . 18
8.1. Required Prepayments . . . . . . . . .18
8.2. Optional Prepayments with
Make-Whole Amount. . . . . . . . . . .18
8.3. Allocation of Partial Prepayments. . .19
8.4. Maturity; Surrender, etc.. . . . . . .19
8.5. Change in Control. . . . . . . . . . .19
8.6. Purchase of Notes. . . . . . . . . . .20
8.7. Make-Whole Amount. . . . . . . . . . .21
9. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . 22
9.1. Compliance with Law. . . . . . . . . .22
9.2. Insurance. . . . . . . . . . . . . . .23
9.3. Maintenance of Properties. . . . . . .23
9.4. Payment of Taxes and Claims. . . . . .23
9.5. Corporate Existence, Etc.. . . . . . .23
9.6. Covenant to Secure Notes Equally . . .24
9.7. Senior Debt. . . . . . . . . . . . . .24
10. NEGATIVE COVENANTS. . . . . . . . . . . . . . . 24
10.1. Consolidated Net Worth. . . . . . . . .24
10.2. Interest Charges Coverage Ratio.. . . .25
10.3. Maintenance of Consolidated Debt. . . .25
10.4. Priority Debt.. . . . . . . . . . . . .25
10.5. Liens.. . . . . . . . . . . . . . . . .25
10.6. Restricted Investments. . . . . . . . .27
10.7. Restrictions on Dividends of
Subsidiaries, Etc. . . . . . . . . . . 28
10.8. Sale-and-Leasebacks.. . . . . . . . . .28
10.9. Transactions with Affiliates. . . . . .28
10.10. Merger, Consolidation, Etc.. . . . . . 29
10.11. Sale of Assets, Etc. . . . . . . . . . 29
10.12. Line of Business.. . . . . . . . . . . 30
10.13. Subordinated Debt Restrictions . . . . 30
10.14. Accounting Changes . . . . . . . . . . 30
11. EVENTS OF DEFAULT . . . . . . . . . . . . . . . 31
12. REMEDIES ON DEFAULT, ETC. . . . . . . . . . . . 33
12.1. Acceleration. . . . . . . . . . . . . . . 33
12.2. Other Remedies. . . . . . . . . . . . . . 34
12.3. Rescission. . . . . . . . . . . . . . . . 34
12.4. No Waivers or Election of Remedies,
Expenses, etc. . . . . . . . . . . . . . .35
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES . 35
13.1. Registration of Notes . . . . . . . . . . 35
13.2. Transfer and Exchange of Notes. . . . . . 35
13.3. Replacement of Notes. . . . . . . . . . . 36
14. PAYMENTS ON NOTES . . . . . . . . . . . . . . . 36
14.1. Place of Payment. . . . . . . . . . . . . 36
14.2. Home Office Payment . . . . . . . . . . . 36
15. EXPENSES, ETC . . . . . . . . . . . . . . . . . 37
15.1. Transaction Expenses. . . . . . . . . . . 37
15.2. Survival. . . . . . . . . . . . . . . . . 37
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
ENTIRE AGREEMENT . . . . . . . . . . . . . . . .37
17. AMENDMENT AND WAIVER. . . . . . . . . . . . . . 38
17.1. Requirements. . . . . . . . . . . . . . . 38
17.2. Solicitation of Holders of Notes. . . . . 38
17.3. Binding Effect, etc.. . . . . . . . . . . 39
17.4. Notes held by Company, etc. . . . . . . . 39
18. NOTICES . . . . . . . . . . . . . . . . . . . . 39
19. REPRODUCTION OF DOCUMENTS . . . . . . . . . . . 40
20. CONFIDENTIAL INFORMATION. . . . . . . . . . . . 40
21. SUBSTITUTION OF PURCHASER . . . . . . . . . . . 41
22. MISCELLANEOUS . . . . . . . . . . . . . . . . . 41
22.1. Successors and Assigns. . . . . . . . . . 41
22.2. Payments Due on Non-Business Days . . . . 41
22.3. Severability. . . . . . . . . . . . . . . 42
22.4. Construction. . . . . . . . . . . . . . . 42
22.5. Counterparts. . . . . . . . . . . . . . . 42
22.6. Governing Law . . . . . . . . . . . . . . 42
SCHEDULES AND EXHIBITS
SCHEDULE A -- Information Relating To Purchasers
SCHEDULE B -- Defined Terms
SCHEDULE 5.3 -- Certain Additional Disclosure Items
SCHEDULE 5.4 -- Subsidiaries of the Company and
Ownership of Subsidiary Stock
SCHEDULE 5.12 -- Accumulated Benefits Obligations and
Post-Employment Benefits Obligations
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Debt
SCHEDULE 8.1 -- Required Prepayments
SCHEDULE 10.4 -- Existing Priority Debt
SCHEDULE 10.5 -- Existing Liens
SCHEDULE 10.6 -- Existing Investments
EXHIBIT A -- Form of 7.78% Senior Note
due April 30, 2011
EXHIBIT B -- Form of Opinion of Special Counsel
for the Company
EXHIBIT C -- Form of Opinion of Special Counsel
for the Purchasers
EXHIBIT D -- Form of Intercreditor Agreement
<PAGE>
EXCEL INDUSTRIES, INC.
1120 North Main Street
Elkhart, Indiana 46514
7.78% Senior Notes due April 30, 2011
May 3, 1996
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
Excel Industries, Inc., an Indiana corporation (the
"Company"), agrees with you as follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of
$100,000,000 aggregate principal amount of its 7.78% Senior Notes due
April 30, 2011 (the "Notes", such term to include any such notes issued
in substitution therefor pursuant to Section 13 of this Agreement or the
Other Agreements (as hereinafter defined)). The Notes shall be
substantially in the form set out in Exhibit A, with such changes
therefrom, if any, as may be approved by you and the Company.
Certain
capitalized terms used in this Agreement are defined in Schedule B;
references to a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Schedule or an Exhibit attached to this Agreement.
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this
Agreement,
the Company will issue and sell to you and you will purchase from the
Company, at the Closing provided for in Section 3, Notes in the
principal amount specified opposite your name in Schedule A at the
purchase price of 100% of the principal amount thereof.
Contemporaneously with entering into this Agreement, the Company is
entering into separate Note Purchase Agreements (the "Other
Agreements")
identical with this Agreement with each of the other purchasers
named in
Schedule A (the "Other Purchasers"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the principal amount
specified opposite its name in Schedule A. Your obligation
hereunder
and the obligations of the Other Purchasers under the Other
Agreements
are several and not joint obligations and you shall have no
obligation
under any Other Agreement and no liability to any Person for the
performance or non-performance by any Other Purchaser thereunder.
3. CLOSING.
The sale and purchase of the Notes to be
purchased by
you and the Other Purchasers shall occur at the offices of Schiff Hardin
& Waite, 7200 Sears Tower, Chicago, Illinois 60606, at 10:00 a.m.,
Central time, at a closing (the "Closing") on May 3, 1996 or on
such
other Business Day thereafter on or prior to May 9, 1996 as may be
agreed upon by the Company, you and the Other Purchasers. At the
Closing the Company will deliver to you the Notes to be pur-chased by
you in the form of a single Note (or such greater number of Notes in
denominations of at least $100,000 as you may request) dated the date of
the Closing and registered in your name (or in the name of your
nominee), against delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price
therefor
by wire transfer of immediately available funds for the account of the
Company to account number 120-250-0900 at Key Bank, 301 S. Main,
Elkhart, Indiana, ABA No. 071-200-538. If at the Closing the
Company
shall fail to tender such Notes to you as provided above in this Section
3, or any of the conditions specified in Section 4 shall not have been
fulfilled to your satisfaction, you shall, at your election, be
relieved
of all further obligations under this Agreement, without thereby waiving
any rights you may have by reason of such failure or such nonful-
fillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to
be sold to you at the Closing is subject to the fulfillment to your
satisfaction, prior to or at the Closing, of the following
conditions:
4.1. Representations and Warranties.
The representations and warranties of the Company in
this Agreement shall be correct when made and at the time of the
Closing.
4.2. Performance; No Default.
The Company shall have performed and complied
with all
agreements and conditions contained in this Agreement required to be
performed or complied with by it prior to or at the Closing and
after
giving effect to the issue and sale of the Notes (and the
application of
the proceeds thereof as contemplated by Schedule 5.14) no Default or
Event of Default shall have occurred and be continuing.
4.3. Compliance Certificates.
(a) Officer's Certificate. The Company
shall
have delivered to you an Officer's Certificate, dated the date of the
Closing, certifying that the conditions specified in Sections 4.1, 4.2
and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall
have delivered to you a certificate certifying as to the
resolutions
attached thereto and other corporate proceedings relating to the
authorization, execution and delivery of the Notes and the
Agree-ments.
4.4. Opinions of Counsel.
You shall have received opinions in form and
substance
satisfactory to you, dated the date of the Closing (a) from Sommer &
Barnard, PC, counsel for the Company, covering the matters set
forth in
Exhibit B and covering such other matters incident to the
transactions
contemplated hereby as you or your counsel may reasonably request (and
the Company hereby instructs its counsel to deliver such opinion to you)
and (b) from Schiff Hardin & Waite, your special counsel in
connection
with such transactions, sub-stantially in the form set forth in
Exhibit
C and covering such other matters incident to such transactions as you
may reasonably request.
4.5. Purchase Permitted By Applicable Law, etc.
On the date of the Closing your purchase of Notes
shall (i) be permitted by the laws and regulations of each
jurisdiction
to which you are subject, without recourse to provisions (such as
Section 1405(a)(8) of the New York Insurance Law) permitting
limited
investments by insurance companies without restriction as to the
character of the particular investment, (ii) not violate any
applicable
law or regulation (including, without limitation, Regulation G, T or X
of the Board of Governors of the Federal Reserve System) and (iii) not
subject you to any tax, penalty or liability under or pursuant to any
applicable law or regulation, which law or regulation was not in effect
on the date hereof. If requested by you, you shall have received an
Officer's Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such purchase is
so permitted.
4.6. Sale of Other Notes.
Contemporaneously with the Closing the Company shall
sell to the Other Purchasers and the Other Purchasers shall
purchase the
Notes to be purchased by them at the Closing as specified in
Sched-ule
A.
4.7. Payment of Special Counsel Fees.
Without limiting the provisions of Section 15.1, the
Company shall have paid on or before the Closing the fees, charges and
disbursements of your special counsel referred to in Section 4.4 to the
extent reflected in a statement of such counsel rendered to the
Company
at least one Business Day prior to the Closing.
4.8. Private Placement Number.
A Private Placement number issued by Standard & Poor's
CUSIP Service Bureau (in cooperation with the Securities Valuation
Office of the National Association of Insurance Commissioners)
shall
have been obtained for the Notes.
4.9. Changes in Corporate Structure.
The Company shall not have changed its
jurisdiction of
incorporation or been a party to any merger or consolidation and shall
not have succeeded to all or any substantial part of the
liabilities of
any other entity, at any time following the date of the most recent
financial statements referred to in Section 5.5.
4.10. Execution and Delivery of Certain Documents.
The following documents shall have been executed by
each party thereto and delivered to you, which documents shall be in
form and substance satisfactory to you: (a) the Notes to be
delivered
to you pursuant to Section 2; and (b) the Intercreditor Agreement.
4.11. Credit Agreement and Subordinated Debt Agreement.
You shall have received: (a) a copy of the
Credit
Agreement, the Subordinated Debt Agreement, each guaranty thereof and
all other related instruments and agreements as you may request,
certified as accurate and complete and as in effect on the date of the
Closing by a Senior Financial Officer, all of which shall be in
form and
substance acceptable to you; and (b) evidence satisfactory to you that
the Senior Private Placement Debt
constitutes "Senior Debt" as such term is defined (and used) in the
Subordinated Debt Agreement and the Subordinated Debt Guaranty.
4.12. Proceedings and Documents.
All corporate and other proceedings in connection with
the transactions contemplated by this Agreement and all documents and
instruments incident to such transactions shall be satisfactory to you
and your special counsel, and you and your special counsel shall have
received all such counterpart originals or certified or other
copies of
such documents as you or they may reasonably request.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1. Organization; Power and Authority.
The Company is a corporation duly organized and
validly existing under the laws of its jurisdiction of
incorporation,
and is duly qualified as a foreign corporation and is in good
standing
in each jurisdiction in which such qualification is required by
law,
other than those jurisdictions as to which the failure to be so
qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect.
The Company has the corporate power and authority to own or hold under
lease the properties it purports to own or hold under lease, to
transact
the business it transacts and proposes to transact, to execute and
deliver this Agreement and the Other Agreements and the Notes and to
perform the provisions hereof and thereof.
5.2. Authorization, etc.
This Agreement and the Other Agreements and the Notes
have been duly authorized by all necessary corporate action on the part
of the Company, and this Agreement constitutes, and upon execution and
delivery thereof each Note will constitute, a legal, valid and
binding
obligation of the Company enforceable against the Company in
accordance
with its terms, except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general
principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
5.3. Disclosure.
The Company, through its agent, Key Capital
Markets,
Inc., has delivered to you and each Other Purchaser a copy of a
Private
Placement Memorandum (the "Memorandum"), relating to the
transactions
contemplated hereby. The Memorandum fairly describes, in all
material
respects, the general nature of the business and principal
properties of
the Company and its Subsidiaries. This Agreement (including the
information set forth on Schedule 5.3), the Memorandum, the Form 8-K
filed by the Company with the
Securities and Exchange Commission on April 18, 1996, and the other
documents, certificates or other writings delivered to you by or on
behalf of the Company in connection with the transactions
contemplated hereby and the financial statements described in
Section
5.5, taken as a whole, do not contain any untrue statement of a
material
fact or omit to state any material fact necessary to make the
statements
therein not misleading in light of the circum-stances under which they
were made. Since December 30, 1995, there has been no change in the
financial condition, operations,
business, properties or prospects of the Company and its
Subsidiary except changes that individually or in the aggregate
could
not reasonably be expected to have a Material Adverse Effect.
There is
no fact known to a Responsible Officer of the Company after due
inquiry
that could reasonably be expected to have a Material Adverse Effect that
has not been set forth herein or in the Memorandum or in the other
documents, certificates and other writings delivered to you by or on
behalf of the Company
specifically for use in connection with the transactions
contemplated hereby.
5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates.
(a) Schedule 5.4 contains (except as noted
therein) complete and correct lists (i) of the Company's
Subsidiaries,
showing, as to each Subsidiary, the correct name thereof, the
jurisdiction of its organization, and the percentage of shares of each
class of its capital stock or similar equity interests outstanding owned
by the Company and each other Subsidiary, (ii) of the Company's
Affiliates, other than Subsidiaries, and (iii) of the Company's
directors and senior officers.
(b) All of the outstanding shares of capital
stock or similar equity interests of each Subsidiary shown in
Schedule
5.4 as being owned by the Company and its Subsidiaries have been validly
issued, are fully paid and nonassessable and are owned by the
Company or
another Subsidiary free and clear of any Lien (except as otherwise
disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is
a corporation or other legal entity duly organized, validly
existing and
in good standing under the laws of its jurisdiction of
organization, and is duly qualified as a foreign corporation or
other
legal entity and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to
which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect. Each such Subsidiary has the corporate or
other power and authority to own or hold under lease the properties it
purports to own or hold under lease and to transact the business it
transacts and proposes to transact.
(d) No Subsidiary is a party to, or
otherwise
subject to any legal restriction or any agreement (other than this
Agreement, the agreements listed on Schedule 5.4, the limitation set
forth in the Certificate of Incorporation of Anderson as in effect on
the date hereof and customary limitations imposed by corporate law
statutes) restricting the ability of such Subsidiary to pay
dividends
out of profits or make any other similar distributions of profits to the
Company or any of its Subsidiaries that owns outstanding shares of
capital stock or similar equity interests of such Subsidiary.
5.5. Financial Statements.
The Company has delivered to you and the Other
Purchasers copies of complete and correct copies of (a) the
consolidated balance sheets of the Company and its consolidated
subsidiaries as at December 31, 1994 and December 30, 1995 and the
related consolidated statements of income, shareholders' equity and
cash flows of the Company and its consolidated subsidiaries for the
years then ended, all certified without qualification by Price
Waterhouse L.L.P., and (b) the consolidated balance sheets of
Atwood
and its consolidated subsidiaries as at December 30, 1995 and
December
31, 1994 and the related consolidated statements of operations,
shareholders' equity and cash flows for the years then ended, all
certified by Coopers & Lybrand L.L.P. All such
financial statements have been prepared in accordance with GAAP ,
consistently applied (except as stated therein), and fairly present the
consolidated financial position of the Company and Atwood (as
applicable) as at the respective dates indicated and the
consolidated results of their operations and cash flows for the
respective periods indicated. The Company has also delivered to you and
the Other Purchasers certain financial projections prepared by
management of the Company and set forth in the Memorandum (the
"Financial Projections"). The Financial Projections were prepared in
good faith after taking into account the existing and historical levels
of the Company's and its Subsidiaries' business activity, known
trends,
including general economic trends, and all other information,
assumptions and estimates pertinent thereto; provided, however,
that
such assumptions and estimates are subject to significant economic and
competitive factors beyond the Company's control. The Financial
Projections were considered by management of the Company, 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,
however,
that no representation or warranty is made as to the impact of
future
general economic conditions or as to whether the Company's
projected
results as set forth in the Financial
Projections will actually be realized. No facts (other than facts of a
general economic or political nature that do not affect the Company or
its Subsidiaries uniquely) are known to the Company at the date
hereof
which, if reflected in the Financial Projections, could reasonably be
expected to result in a Material Adverse Effect as compared to the
assets, liabilities, results or operations or cash flows reflected
therein.
5.6. Compliance with Laws, Other Instruments, etc.
The execution, delivery and performance by the Company
of this Agreement and the Notes will not (i) contravene, result in any
breach of, or constitute a default under, or result in the creation of
any Lien in respect of any property of the Company or any
Subsidiary
under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other
agreement
or instrument to which the Company or any Subsidiary is bound or by
which the Company or any Subsidiary or any of their respective
properties may be bound or affected, (ii) conflict with or result in a
breach of any of the terms, conditions or provisions of any order,
judgment, decree, or ruling of any court, arbitrator or
Governmental
Authority applicable to the Company or any Subsidiary or (iii)
violate
any provision of any statute or other rule or regulation of any
Governmental Authority applicable to the Company or any Subsidiary.
5.7. Governmental Authorizations, etc.
No consent, approval or authorization of, or
registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or
performance by the Company of this Agreement or the Notes.
5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) After taking into account the Company's
provisions for reserves as set forth in its financial statements
referred to in Section 5.5, there are no actions, suits or
proceedings
pending or, to the knowledge of any Responsible Officer of the
Company
after due inquiry, threatened against or affecting the Company or any
Subsidiary or any property of the Company or any Subsidiary in any court
or before any arbitrator of any kind or before or by any
Governmental
Authority that, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in
default under any term of any agreement or instrument to which it is a
party or by which it is bound, or any order, judgment, decree or ruling
of any court, arbitrator or Governmental Authority or is in
violation of
any applicable law, ordinance, rule or regulation (including
without
limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in
the aggregate, could reasonably be expected to have a Material
Adverse
Effect.
5.9. Taxes.
The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and
have paid all taxes shown to be due and payable on such returns and all
other taxes and assessments levied upon them or their properties,
assets, income or franchises, to the extent such taxes and
assessments
have become due and payable and before they have become delinquent,
except for any taxes and assessments (i) the amount of which is not
individually or in the aggregate Material or (ii) the amount,
applicability or validity of which is currently being contested in good
faith by appropriate proceedings and with respect to which the
Company
or a Subsidiary, as the case may be, has established adequate
reserves
in accordance with GAAP. No Responsible Officer of the Company
after
due inquiry knows of any basis for any other tax or assessment that
could reasonably be expected to have a Material Adverse Effect. The
charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all fiscal
periods are adequate in all material respects. The Federal income tax
liabilities of the Company and its Subsidiaries have been audited by the
Internal Revenue Service and paid for all fiscal years up to and
including the fiscal year ended December 31, 1992, except that the
Federal income tax liabilities of Anderson and its Subsidiaries
have
been audited by the Internal Revenue Service and paid for all
fiscal
years up to and including the fiscal year ended December 31, 1993.
5.10. Title to Property; Leases.
The Company and its Subsidiaries have good and
sufficient title to their respective properties that individually or in
the aggregate are Material, including all such properties reflected in
the most recent audited balance sheet referred to in Section 5.5 or
purported to have been acquired by the Company or any Subsidiary after
said date (except as sold or otherwise disposed of in the ordinary
course of business), in each case free and clear of Liens
prohibited by
this Agreement. All leases that individually or in the aggregate are
Material are valid and subsisting and are in full force and effect in
all material respects.
5.11. Licenses, Permits, etc.
(a) The Company and its
Subsidiaries
own or possess all licenses, permits, franchises,
authorizations, patents, copyrights, service marks,
trademarks
and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the
rights
of others.
(b) To the best knowledge of the
Responsible Officers of the Company after due inquiry, no
product of the Company infringes in any material respect any
license, permit, franchise, authorization, patent,
copyright,
service mark, trademark, trade name or other right owned by any
other Person.
(c) To the best knowledge of the
Responsible Officers of the Company after due inquiry,
there is
no Material violation by any Person of any right of the Company
or any of its Subsidiaries with respect to any patent,
copyright, service mark, trademark, trade name or other right
owned or used by the Company or any of its Subsidiaries.
5.12. Compliance with ERISA.
(a) The Company and each ERISA Affiliate
have
operated and administered each Plan in compliance with all
applicable
laws except for such instances of noncompliance as have not
resulted in
and could not reasonably be expected to result in a Material
Adverse
Effect. Neither the Company nor any ERISA Affiliate has incurred any
liability pursuant to Title I or IV of ERISA or the penalty or
excise
tax provisions of the Code relating to employee benefit plans (as
defined in Section 3 of ERISA), and no event, transaction or
condition
has occurred or exists that could reasonably be expected to result in
the
incurrence of any such liability
by the Company or any ERISA Affiliate, or in the imposition of any Lien
on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV
of ERISA or to such penalty or excise tax provisions or to Section
401(a)(29) or 412 of the Code, other than such liabilities or Liens as
would not be individually or in the aggre-gate Material.
(b) Except as set forth on Schedule 5.12, the
accumulated benefit obligations under each of the Plans (other than
Multiemployer Plans), determined as of December 31, 1995 on the
basis of
FASB No. 87 did not exceed the aggregate fair value of the assets of
such Plan. The terms "accumulated benefit obligations" and "fair value"
shall have the meaning in Statement of Financial Accounting
Standards
("FASB") No. 87 ("Employers' Accounting For Pensions").
(c) The Company and its ERISA Affiliates
have not
incurred withdrawal liabilities (and are not subject to contingent
withdrawal liabilities) under section 4201 or 4204 of ERISA in
respect
of Multiemployer Plans that individually or in the aggre-gate are
Material.
(d) Except as set forth on Schedule 5.12, the
expected post-retirement benefit obligation (determined as of the last
day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without
regard
to liabilities attributable to continuation coverage mandated by section
4980B of the Code) of the Company and its Subsidiaries is not
Material.
(e) The execution and delivery of this
Agreement
and the issuance and sale of the Notes hereunder will not involve any
transaction that is subject to the prohibitions of section 406 of ERISA
or in connection with which a tax could be imposed pursuant to
section
4975(c)(1)(A)-(D) of the Code. The representation by the Company in the
first sentence of this Section 5.12(e) is made in reliance upon and
subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds to be used to pay the purchase price of the Notes
to be purchased by you.
5.13. Private Offering by the Company.
Neither the Company nor anyone acting on its
behalf
has offered the Notes or any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise
approached
or negotiated in respect thereof with, any person other than you, the
Other Purchasers and not more than 20 other
Institutional Investors, each of which has been offered the Notes at a
private sale for investment. Neither the Company nor anyone acting on
its behalf has taken, or will take, any action that would subject the
issuance or sale of the Notes to the registration requirements of
Section 5 of the Securities Act.
5.14. Use of Proceeds; Margin Regulations.
The Company will apply the proceeds of the sale of the
Notes as set forth in Schedule 5.14. No part of the proceeds from the
sale of the Notes hereunder will be used, directly or in-directly, for
the purpose of buying or carrying any margin stock within the
meaning of
Regulation G of the Board of Governors of the Federal Reserve
System (12
CFR 207), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Company in a
violation of Regulation X of said Board (12 CFR 224) or to involve any
broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does
not constitute more than 25% of the value of the consolidated
assets of
the Company and its Subsidiaries and the Company does not have any
present intention that margin stock will constitute more than 25% of the
value of such assets. As used in this Section, the terms "margin stock"
and "purpose of buying or carrying" shall have the meanings
assigned to
them in said Regulation G.
5.15. Existing Debt; Future Liens.
(a) Except as described therein, Schedule 5.15
sets forth a complete and correct list of all outstanding Debt in excess
of $100,000 of the Company and its Subsidiaries as of the date of this
Agreement. Neither the Company nor any Subsidiary is in de-fault and no
waiver of default is currently in effect, in the payment of any
principal or interest on any such Debt of the Company or such
Subsidiary
and no event or condition exists with respect to any such Debt of the
Company or any Subsidiary that would permit (or that with notice or the
lapse of time, or both, would permit) one or more Persons to cause such
Debt to become due and payable before its stated maturity or before its
regularly scheduled dates of payment.
(b) Except for Liens permitted under Section
10.5, neither the Company nor any Subsidiary has agreed or
consented to
cause or permit in the future (upon the happening of a contingency or
otherwise) any of its property, whether now owned or hereafter
acquired,
to be subject to a Lien.
5.16. Foreign Assets Control Regulations, etc.
Neither the sale of the Notes by the Company
hereunder
nor its use of the proceeds thereof will violate the Trading with the
Enemy Act, as amended, or any of the foreign assets control
regulations
of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V,
as amended) or any enabling legislation or executive order relating
thereto.
5.17. Status under Certain Statutes.
Neither the Company nor any Subsidiary is subject to
regulation under the Investment Company Act of 1940, as amended, the
Public Utility Holding Company Act of 1935, as amended, the
Interstate
Commerce Act, as amended, or the Federal Power Act, as amended.
5.18. Environmental Matters.
(a) After taking into account the Company's
provisions for reserves as set forth in its financial statements
referred to in Section 5.5, no Responsible Officer of the Company or any
Subsidiary after diligent inquiry has knowledge of any claim or has
received any notice of any claim, and no proceeding has been
instituted
raising any claim against the Company or any of its Subsidiaries or any
of their respective real properties now or formerly owned, leased or
operated by any of them or other assets, alleging any damage to the
environment or violation of any
Environmental Laws, except, in each case, such as could not
reasonably
be expected to result in a Material Adverse Effect.
(b) No Responsible Officer of the Company or any
Subsidiary after diligent inquiry has knowledge of any facts which would
give rise to any claim, public or private, of violation of
Environmental
Laws or damage to the environment emanating from, occurring on or in any
way related to real properties now or formerly owned, leased or
operated
by any of them or to other assets or their use, except, in each
case,
such as could not reasonably be expected to result in a Material Adverse
Effect.
(c) Neither the Company nor any of its
Subsidiaries has stored any Hazardous Materials on real properties now
or formerly owned, leased or operated by any of them and has not
disposed of any Hazardous Materials in a manner contrary to any
Environmental Laws in each case in any manner that could reasonably be
expected to result in a Material Adverse Effect.
(d) All buildings on all real properties now
owned, leased or operated by the Company or any of its Subsidiaries are
in compliance with applicable Environmental Laws, except where
failure
to comply could not reasonably be expected to result in a Material
Adverse Effect.
5.19. Status as Senior Debt.
(a) The principal of, Make-Whole Amount, if any,
with respect to, and interest on all Notes and all reasonable and
verifiable fees and expenses and other amounts payable by the
Company
arising under this Agreement and the Notes (collectively, the
"Senior
Private Placement Debt") ranks in priority of payment at least
equally
with all senior unsecured and unsubordinated indebtedness of the
Company.
(b) The Senior Private Placement Debt
constitutes
"Senior Debt" as such term is defined (and used) in the
Subordinated Debt Agreement and the Subordinated Debt Guaranty. The
Senior Private Placement Debt is senior in right of payment to the
Subordinated Debt at least to the extent provided in the
Subordinated
Debt Agreement as in effect on the date hereof.
6. REPRESENTATIONS OF THE PURCHASER.
6.1. Purchase for Investment.
You represent that you are purchasing the Notes for
your own account or for one or more separate accounts maintained by you
or for the account of one or more pension or trust funds managed by you
and not with a view to the distribution thereof, provided that the
disposition of your or their property shall at all times be within your
or their control. You understand that the Notes have not been
registered under the Securities Act and may be resold only if
registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the
Company is not required to register the Notes.
6.2. Source of Funds.
You represent that at least one of the following
statements is an accurate representation as to each source of funds (a
"Source") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) if you are an insurance
company, the
Source does not include assets allocated to any separate
account maintained by you in which any employee benefit plan
(or its related trust) has any interest; or
(b) if you are an insurance
company, the
Source is your "insurance company general account" (as such
term is defined under Section V of the United States Department
of Labor's Prohibited Transaction Class Exemption ("PTCE") 95-
60), and as of the date of the purchase of the Notes you satisfy
all of the applicable requirements for relief under
Section I and IV of PTCE 95-60; or
(c) the Source is either (i) an
insurance company pooled separate account, within the meaning
of Prohibited Transaction Exemption ("PTE") 90-1 (issued
January 29, 1990), or (ii) a bank collective investment fund,
within the meaning of the PTE 91-38 (issued July 12, 1991) and,
except as you have disclosed to the Company in writing pursuant
to this paragraph (c), no employee benefit plan or group of
plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to
such pooled separate account or collective investment fund; or
(d) the Source constitutes assets of an
"investment fund" (within the meaning of Part V of the QPAM
Exemption) managed by a "qualified professional asset manager"
or "QPAM" (within the meaning of Part V of the QPAM Exemption),
no employee benefit plan's assets that are included in such
investment fund, when combined with the assets of all other
employee benefit plans established or maintained by the same
employer or by an affiliate (within the meaning of Section
V(c)(1) of the QPAM Exemption) of such employer or by the same
employee organization and managed by such QPAM, exceed 20% of
the total client assets managed by such QPAM, the conditions of Part
I(c) and (g) of the QPAM Exemption are satisfied, neither
the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the
QPAM Exemption) owns a 5% or more interest in the Company and
(i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such in-
vestment fund have been disclosed to the Company in writing
pursuant to this paragraph (d); or
(e) the Source is a governmental plan;
or
(f) the Source is one or more
employee
benefit plans, or a separate account or trust fund comprised of
one or more employee benefit plans, each of which has been
identified to the Company in writing pursuant to this paragraph
(e); or
(g) the Source does not include
assets
of any employee benefit plan, other than a plan exempt from the
coverage of ERISA.
As used in this Section 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest" and "separate account"
shall
have the respective meanings assigned to such terms in Section 3 of
ERISA.
7. INFORMATION AS TO COMPANY.
7.1. Financial and Business Information.
The Company shall deliver to each holder of Notes that
is an Institutional Investor:
(a) Quarterly Statements -- within 45
days after the end of each quarterly fiscal period in each
fiscal year of the Company (other than the last quarterly
fiscal period of each such fiscal year), duplicate copies of,
(i) a consolidating and
consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidating and
consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and
its Subsidiaries, for such quarter and (in the case of
the second and third quarters) for the portion of the
fiscal year ending with such quarter,
setting forth in each case, and in comparative form for the
consolidated statements, the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail,
prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior
Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being
reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments,
provided that delivery within the time period specified above
of copies of the Company's Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefor and filed
with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this Section 7.1(a) with respect to
the consolidated financial statements referred to above;
(b) Annual Statements -- within 90 days
after the end of each fiscal year of the Company, duplicate
copies of,
(i) a consolidating and
consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidating and
consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and
its Subsidiaries, for such year,
setting forth in each case, and in comparative form for the
consolidated statements, the figures for the previous fiscal year,
all in reasonable detail, prepared in accordance with
GAAP, and accompanied
(A) by an opinion, as to such
consolidated financial statements,of independent
certified public accountants of recognized national
standing, which opinion shall state that such
financial statements present fairly, in all material
respects, the financial position of the companies
being reported upon and their results of operations
and cash flows and have been prepared in conformity
with GAAP, and that the examination of such
accountants in connection with such financial
statements has been made in accordance with generally
accepted auditing standards, and that such audit provides
a reasonable basis for such opinion in the circumstances,
and
(B) a certificate of such
accountants stating that they have reviewed this
Agreement and stating further whether, in making their
audit, they have become aware of any condition or
event that then constitutes a Default or an Event of
Default, and, if they are aware that any such
condition or event then exists, specifying the nature
and period of the existence thereof (it being
understood that such accountants shall not be liable,
directly or indirectly, for any failure to obtain
knowledge of any Default or Event of Default unless such
accountants should have obtained knowledge thereof in
making an audit in accordance with generally accepted
auditing standards or did not make such an audit),
provided that the delivery within the time period specified
above of the Company's Annual Report on Form 10-K for such fiscal
year (together with the Company's annual report to
shareholders, if any, prepared pursuant to Rule 14a-3 under the
Exchange Act) prepared in accordance with the requirements
therefor and filed with the Securities and Exchange Commis-
sion, together with the accountant's certificate described in
clause (B) above, shall be deemed to satisfy the requirements
of this Section 7.1(b) with respect to the consolidated
financial statements referred to above;
(c) SEC and Other Reports --
promptly
upon their becoming available, one copy of (i) each financial
statement, report, notice or proxy statement sent by the
Company or any Subsidiary to public securities holders
generally, and (ii) each regular or periodic report, each
registration statement (without exhibits except as expressly
requested by such holder), and each prospectus and all
amendments thereto filed by the Company or any Subsidiary with
the Securities and Exchange Commission and of all press
releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments
that are Material;
(d) Notice of Default or Event of
Default -- promptly after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person
has given any notice or taken any action with respect
to a claimed default hereunder or that any Person has given any
notice or taken any action with respect to a claimed default of
the type referred to in Section 11(f), a written
notice specifying the nature and period of existence thereof
and what action the Company is taking or proposes to take with
respect thereto;
(e) ERISA Matters -- promptly, and in
any event within five days after a Responsible Officer becoming
aware of any of the following, a written notice setting forth
the nature thereof and the action, if any, that the Company or
an ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan,
any reportable event, as defined in section 4043(b) of
ERISA and the regulations thereunder, for which notice
thereof has not been waived pursuant to such
regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of
steps to institute, or the threatening by the PBGC of
the institution of, proceedings under section 4042 of
ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the
Company or any ERISA Affiliate of a notice from a
Multiemployer Plan that such action has been taken by
the PBGC with respect to such Multiemployer Plan; or
(iii) any event,
transaction or condition that could result in the
incurrence of any liability by the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties
or assets of the Company or any ERISA Affiliate pursuant
to Title I or IV of ERISA or such penalty or excise tax
provisions, if such liability or Lien, taken together with
any other such liabilities or Liens then existing, could
reasonably be expected to have a Material Adverse
Effect;
(f) Notices from Governmental
Authority
- -- promptly upon receipt thereof, and in any event within 30
days, after a Responsible Officer becomes aware of any such
notice, copies of any notice to the Company or any Subsidiary
from any Federal or state Governmental Authority relating to
any order, ruling, statute or other law or regulation that
could reasonably be expected to have a Material Adverse Effect;
and
(g) Requested Information -- with
reasonable promptness, such other data and information relating
to the business, operations, affairs, financial condition,
assets or properties of the Company or any of its Subsidiaries
or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time
may be reasonably requested by any such holder of Notes.
7.2. Officer's Certificate.
Each set of financial statements delivered to a holder
of Notes pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be
accompanied by a certificate of a Senior Financial Officer setting
forth:
(a) Covenant Compliance -- the
information (including detailed calculations) required in
order to establish whether the Company was in compliance with
the requirements of Sections 10.1, 10.2, 10.3, 10.4, 10.5, 10.6
and 10.11 during the quarterly or annual period covered by the
statements then being furnished (including with respect to each
such Section, where applicable, the calculations of the maximum
or minimum amount, ratio or percentage, as the case may be,
permissible under the terms of such Sections, and the
calculation of the amount, ratio or percentage then in
existence); and
(b) Event of Default -- a statement that
such officer has reviewed the relevant terms hereof and has
made, or caused to be made, under his or her supervision, a
review of the transactions and conditions of the Company and
its Subsidiaries from the beginning of the quarterly or annual
period covered by the statements then being furnished to the
date of the certificate and that such review shall not have
disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if
any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the
Company shall have taken or proposes to take with respect
thereto.
7.3. Inspection.
The Company shall permit the representatives of each
holder of Notes that is an Institutional Investor:
(a) No Default -- if no Default or Event
of Default then exists, at the expense of such holder and upon
reasonable prior notice to the Company, to visit the principal
executive office of the Company, to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with
the Company's officers, and (with the consent of the Company,
which consent will not be unreasonably withheld) its
independent public accountants, and (with the consent of the
Company, which consent will not be unreasonably withheld) to
visit the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may be
reasonably requested in writing; and
(b) Default -- if a Default or
Event of
Default then exists, at the expense of the Company to visit and
inspect any of the offices or properties of the Company or any
Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances
and accounts with their respective officers and independent public
accountants (and by this provision the Company autho-
rizes said accountants to discuss the affairs, finances and
accounts of the Company and its Subsidiaries), all at such
times and as often as may be requested.
7.4. Information Required by Rule 144A.
The Company covenants that it will upon the
request of
the holder of any Note, provide such holder, and any qualified
institutional buyer designated by such holder, such financial and other
information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of
Rule
144A under the Securities Act in connection with the resale of
Notes,
except at such times as the Company is subject to the reporting
requirements of section 13 or 15(d) of the Exchange Act. For the
purpose of this Section 7.4, the term "qualified institutional
buyer"
shall have the meaning specified in Rule 144A under the Securities Act.
8. PREPAYMENT OF THE NOTES.
8.1. Required Prepayments.
(a) Scheduled Payments. The Company will prepay
the Notes on such dates and in such principal amounts as is set
forth in
Schedule 8.1 (or such lesser principal amount as shall then be
outstanding) at par and without payment of the Make-Whole Amount or any
premium, provided that upon any partial prepayment of the Notes
pursuant
to Section 8.5, the principal amount of each required prepayment of the
Notes becoming due under this Section 8.1(a) on and after the date of
such prepayment shall be reduced in the same proportion as the aggregate
unpaid principal amount of the Notes is reduced as a result of such
prepayment.
(b) Prepayment With Make-Whole Amount Pursuant to
Intercreditor Agreement. If amounts are to be applied to the principal
of Notes pursuant to the terms of the Intercreditor Agreement, interest
owing thereon to the prepayment date and the Make-Whole Amount, if any,
with respect thereto shall be due and payable on such date. Any partial
prepayment of the Notes pursuant to this clause (b) shall be applied in
satisfaction of required prepayments of principal pursuant to Section
8.1(a) in inverse order of the scheduled due dates.
8.2. Optional Prepayments with Make-Whole Amount.
The Company may, at its option, upon notice as
provided below, prepay at any time all, or from time to time any part
of, the Notes, in an amount not less than 5% of the aggregate principal
amount of the Notes then outstanding in the case of a partial
prepayment, at 100% of the principal amount so prepaid, plus the Make-
Whole Amount determined for the prepayment date with respect to such
principal amount. The Company will give each holder of Notes written
notice of each optional prepayment under this Section 8.2 not less than
10 days and not more than 60 days prior to the date fixed for such
prepayment. Each such notice shall specify such date, the aggregate
principal amount of the Notes to be prepaid on such date, the principal
amount of each Note held by such holder to be prepaid (determined in
accordance with Section 8.3), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and
shall be accompanied by a certificate of a Senior Financial Officer as
to the estimated Make-Whole Amount due in connection with such prepay-
ment (calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation. Two
Business Days prior to such prepayment, the Company shall deliver to
each holder of Notes a certificate of a Senior Financial Officer
specifying the calculation of such Make-Whole Amount as of the
specified prepayment date. The Company shall, on or before the day on
which it gives written notice of prepayment pursuant to this Section
8.2, give telephonic notice of the principal amount of the Notes to be
prepaid and the prepayment date to each Institutional Investor which
shall have designated a recipient of such notices in Schedule A attached
hereto or by notice in writing to the Company. Any partial prepayment
of the Notes pursuant to this Section 8.2 shall be applied in
satisfaction of required prepayments of principal pursuant to Section
8.1(a) in the inverse order of the scheduled due dates.
8.3. Allocation of Partial Prepayments.
In the case of each partial prepayment of the Notes
pursuant to Section 8.1 or 8.2, the principal amount of the Notes to be
prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for
prepayment.
8.4. Maturity; Surrender, etc.
In the case of each prepayment of Notes pursuant to
this Section 8, the principal amount of each Note to be prepaid shall
mature and become due and payable on the date fixed for such prepayment,
together with interest on such principal amount accrued to such date and
the applicable Make-Whole Amount, if any. From and after such date,
unless the Company shall fail to pay such principal amount when so due
and payable, together with the interest and Make-Whole Amount, if any,
as aforesaid, interest on such principal amount shall cease to accrue.
Any Note paid or prepaid in full shall be surrendered to the Company and
cancelled and shall not be reissued, and no Note shall be issued in lieu
of any prepaid principal amount of any Note.
8.5. Change in Control.
(a) Notice of Change in Control or Control Event.
The Company will, promptly after the occurrence of any Change in Control
or Control Event, but in any event within two Business Days thereafter,
give written notice of such Change in Control or Control Event to each
holder of a Note. In the case that a Change in Control has occurred,
such notice shall contain and constitute an offer to prepay Notes as
described in subparagraph (b) of this Section 8.5 and shall be
accompanied by the certificate described in subparagraph (f) of this
Section 8.5.
(b) Offer to Prepay Notes. The offer to prepay
Notes contemplated by subparagraph (a) of this Section 8.5 shall be an
offer to prepay, in accordance with and subject to this Section 8.5,
all, but not less than all, the Notes held by each holder (in this case
only, "holder" in respect of any Note registered in the name of a
nominee for a disclosed beneficial owner shall mean such beneficial
owner) on the later of a date certain, set forth in such offer, which
shall not be less than 30 days nor more than 60 days after the date of
such offer (the "Proposed Prepayment Date") or, if such prepayment date
is extended to a later date pursuant to subparagraph (e)(ii) of this
Section 8.5, such later date.
(c) Acceptance; Rejection. A holder of Notes may
accept the offer to prepay made pursuant to this Section 8.5 by causing
a notice of such acceptance to be delivered to the Company at least 7
days prior to the Proposed Prepayment Date; provided that a failure by
a holder of any Note to respond to an offer to prepay made pursuant to
this Section 8.5 shall be deemed to constitute an acceptance of such
offer by such holder. The Company will, immediately after any holder
shall be deemed to have accepted an offer pursuant to this subparagraph
(c) or, if earlier, immediately after receiving a notice of acceptance
pursuant to this subparagraph (c) from any holder of a Note, give
written notice thereof to each other holder of any Notes (the date that
the first such notice is given by the Company being called the
"Acceptance Notice Date").
(d) Prepayment. Prepayment of the Notes to be
prepaid pursuant to this Section 8.5 shall be at 100% of the
principal
amount of such Notes, plus the Make-Whole Amount determined for the date
of prepayment with respect to such principal amount, together with
interest on such Notes accrued to the date of prepayment. The
prepayment shall be made on the later of the Proposed Prepayment Date
or, if such prepayment date is extended to a later date pursuant to
subparagraph (e)(ii) of this Section 8.5, such later date.
(e) Relinquishment of Rights. Any holder of
Notes (a "Relinquishing Holder") may, by notice to the Company
invoking
the provisions of this subparagraph (e), irrevocably relinquish, for
itself only but not for any subsequent holder of such holder's Notes,
the right to have its Notes prepaid pursuant to this Section 8.5 unless
any other holder of any Notes accepts (or is deemed to have accepted) an
offer to prepay Notes pursuant to subparagraph (c) of this Section 8.5.
In the event that there is one or more Relinquishing Holders at any time
and any other holder of any Notes accepts (or is deemed to have
accepted) an offer to prepay Notes pursuant to subparagraph (c) of this
Section 8.5, then (i) any such Relinquishing Holder may accept the offer
to prepay made pursuant to this Section 8.5 by causing a notice of such
acceptance to be delivered to the Company on or before the 15th day
after the Acceptance Notice Date, and (ii) the date for the prepayment
of the Notes to be prepaid pursuant to this Section 8.5 shall be
extended to the 20th day after the Acceptance Notice Date.
(f) Officer's Certificate. Each offer to prepay
the Notes pursuant to this Section 8.5 shall be accompanied by a
certificate, executed by a Senior Financial Officer of the Company and
dated the date of such offer, specifying: (i) the Proposed
Prepayment
Date; (ii) that such offer is made pursuant to this Section 8.5; (iii)
the principal amount of each Note offered to be prepaid; (iv) the
estimated Make-Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation; (v) the
interest that would be due on each Note offered to be prepaid,
accrued
to the Proposed Prepayment Date; (vi) that the conditions of this
Section 8.5 have been fulfilled; and (vii) in reasonable detail, the
nature and date of the Change in Control.
8.6. Purchase of Notes.
The Company will not and will not permit any
Affiliate
to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or
prepayment of the Notes in accordance with the terms of this
Agreement
and the Notes. The Company will promptly cancel all Notes acquired by
it or any Affiliate pursuant to any payment, prepayment or purchase of
Notes pursuant to any provision of this Agreement and no Notes may be
issued in substitution or exchange for any such Notes.
8.7. Make-Whole Amount.
The term "Make-Whole Amount" means, with respect to
any Note, an amount equal to the excess, if any, of the Discounted Value
of the Remaining Scheduled Payments with respect to the Called Principal
of such Note over the amount of such Called Principal, provided that the
Make-Whole Amount may in no event be less than zero. For the purposes
of determining the Make-Whole Amount, the following terms have the
following meanings:
"Called Principal" means, with respect to any
Note, the principal of such Note that is to be prepaid pursuant
to Section 8.1(b), 8.2 or 8.5 or has become or is declared to
be immediately due and payable pursuant to Section 12.1, as the context
requires.
"Discounted Value" means, with respect to the
Called Principal of any Note, the amount obtained by
discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal,
in accordance with accepted financial practice and at a
discount factor (applied on the same periodic basis as that on
which interest on the Notes is payable) equal to the
Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" means, with respect to
the Called Principal of any Note, 0.50% over the yield to
maturity implied by (i) the yields reported, as of 10:00 A.M.
(New York City time) on the second Business Day preceding the
Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Access Service
(or such other display as may replace Page 678 on Telerate
Access Service) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date, or (ii) if such
yields are not reported as of such time or the yields reported
as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such
yields have been so reported as of the second Business Day
preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519)
(or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if
necessary, by (a) converting U.S. Treasury bill quotations to
bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the
actively traded U.S. Treasury security with the remaining life
closest to and greater than the Remaining Average Life and (2)
the actively traded U.S. Treasury security with the remaining
life closest to and less than the Remaining Average Life.
"Remaining Average Life" means, with
respect
to any Called Principal, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called
Principal into (ii) the sum of the products obtained by
multiplying (a) the principal component of each Remaining
Scheduled Payment with respect to such Called Principal by (b)
the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Settlement Date with respect
to such Called Principal and the scheduled due date of such
Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with
respect to the Called Principal of any Note, all payments of
such Called Principal and interest thereon that would be due
after the Settlement Date with respect to such Called Principal
if no payment of such Called Principal were made prior to its
scheduled due date, provided that if such Settlement Date is
not a date on which interest payments are due to be made under the
terms of the Notes, then the amount of the next succeeding scheduled
interest payment will be reduced by the amount of interest accrued
to such Settlement Date and required to be
paid on such Settlement Date pursuant to Section 8.1(b), 8.2,
8.5 or 12.1.
"Settlement Date" means, with respect to the
Called Principal of any Note, the date on which such Called
Principal is to be prepaid pursuant to Section 8.1(b), 8.2 or
8.5 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes
are outstanding:
9.1. Compliance with Law.
The Company will and will cause each of its
Subsidiaries to comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without
limitation, ERISA and Environmental Laws, and will obtain and
maintain
in effect all licenses, certificates, permits, franchises and other
governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective
businesses,
in each case to the extent necessary to ensure that non-compliance with
such laws, ordinances or governmental rules or regulations or
failures
to obtain or maintain in effect such licenses, certificates,
permits,
franchises and other governmental authorizations could not,
individually
or in the aggregate, reasonably be expected to have a Material
Adverse
Effect.
9.2. Insurance.
The Company will and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and
businesses against such casualties and contingencies, of such types, on
such terms and in such amounts (including deductibles, co-insurance and
self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities
of established reputations engaged in the same or a similar business and
similarly situated.
9.3. Maintenance of Properties.
The Company will and will cause each of its
Subsidiaries to maintain and keep, or cause to be maintained and kept,
their respective properties in good repair, working order and
condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times,
provided
that this Section shall not prevent the Company or any Subsidiary from
discontinuing the operation and the maintenance of any of its
properties
if such discontinuance is desirable in the conduct of its business and
the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
9.4. Payment of Taxes and Claims.
The Company will and will cause each of its
Subsidiaries to file all tax returns required to be filed in any
jurisdiction and to pay and discharge all taxes shown to be due and
payable on such returns and all other taxes, assessments,
governmental
charges, or levies imposed on them or any of their properties,
assets,
income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become
delinquent and all claims for which sums have become due and
payable
that have or might become a Lien on properties or assets of the
Company
or any Subsidiary, provided that neither the Company nor any
Subsidiary
need pay any such tax or assessment or claims if (i) the amount,
applicability or validity thereof is contested by the Company or such
Subsidiary on a timely basis in good faith and in appropriate
proceedings, and the Company or a Subsidiary has established
adequate
reserves therefor in accordance with GAAP on the books of the
Company or
such Subsidiary or (ii) the nonpayment of all such taxes and
assessments
in the aggregate could not rea-sonably be expected to have a
Material
Adverse Effect.
9.5. Corporate Existence, Etc.
The Company will at all times preserve and keep in
full force and effect its corporate existence. Subject to Sections
10.10 and 10.11, the Company will at all times preserve and keep in full
force and effect the corporate existence of each of its
Subsidiaries
(unless merged into the Company or a Subsidiary) and all rights and
franchises of the Company and its Subsidiaries unless, in the good faith
judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a
Material
Adverse Effect.
9.6. Covenant to Secure Notes Equally.
If the Company or any Subsidiary shall create or
assume any Lien upon any of its property or assets, whether now
owned or
hereafter acquired, other than Liens permitted by the provisions of
Section 10.5, the Company will make or cause to be made effective
provision whereby the Notes will be secured by such Lien equally and
ratably with any and all other Debt thereby secured so long as any such
other Debt shall be so secured; provided that compliance with this
Section 9.7 shall not be deemed to constitute a cure of any breach of
the terms of Section 10.5.
9.7. Senior Debt.
The Company will at all times ensure that (a) 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
Company, (b) any Debt subordinated in any manner to the claims of any
other senior unsecured creditor of the Company will be subordinated in
like manner to the claims of holders of the Notes, and (c) the
Senior
Private Placement Debt will at all times constitute "Senior Debt" as
such term is defined (and used) in the Subordinated Debt Agreement and
be senior in right of payment to the Subordinated Debt at least to the
extent provided in the Subordinated Debt Agreement as in effect on the
date hereof.
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes
are outstanding:
10.1. Consolidated Net Worth.
The Company will not permit Consolidated Net
Worth at
any time to be less than $125,000,000, except that effective as of the
end of the Company's fiscal quarter ended June 29, 1996, and as of the
end of each fiscal quarter of the Company thereafter, the foregoing
amount (as it may from time to time be increased as herein
provided)
shall be increased by 50% of the Company'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).
10.2. Interest Charges Coverage Ratio.
The Company will not permit at any time the ratio of
(i) Consolidated EBIT of the Company and its Consolidated
Subsidiaries
during the twelve-month period ending on the last day of each
fiscal
quarter of the Company, to (ii) Consolidated Interest Expense of the
Company and its Consolidated Subsidiaries for such twelve-month
period
to be less than 2.00 to 1.00.
10.3. Maintenance of Consolidated Debt.
The Company will not permit the ratio of (i)
Consolidated Debt of the Company 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 Company and its Consolidated
Subsidiaries, at the end of any fiscal quarter, to exceed (1) 60% at any
time on or prior to May 3, 1997; (2) 55% at any time thereafter
through
January 3, 1998; or (3) 50% at any time
thereafter.
10.4. Priority Debt.
The Company will not, and will not permit any
Subsidiary to, create, incur, assume or suffer to exist any
Priority
Debt at any time, except:
(a) Priority Debt existing on the date
hereof (excluding the Additional Letters of Credit), provided
that such existing Priority Debt is described on Schedule 10.4
and the aggregate amount of such existing Priority Debt does
not exceed the aggregate amount set forth therefor on Schedule
10.4;
(b) any refinancing of any item of
existing Priority Debt described in clause (a) above, provided
that such refinancing does not increase the principal amount of such
item of existing Priority Debt outstanding at the time of
such refinancing;
(c) the Additional Letters of
Credit,
provided that the aggregate amount of such Additional Letters
of Credit does not exceed the aggregate amount set forth
therefor on Schedule 10.4; and
(d) other Priority Debt, provided that
(i) the aggregate amount of all such other Priority Debt
outstanding at any time does not exceed the Permitted Priority
Debt Amount at such time and (ii) the creation, incurrence or
assumption of such other Priority Debt is permitted by Section
10.3.
10.5. Liens.
The Company will not, and will not permit any
Subsidiary to, create, assume, incur or suffer to exist any Lien upon
any of its property, whether now owned or hereafter acquired,
except:
(a) 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);
(b) 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 Company to the extent required under
GAAP;
(c) 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;
(d) pledges or deposits to secure
obligations under workmen's compensation laws or similar
legislation or to secure statutory obligations of the Company
or any of its Subsidiaries, provided such Liens do not result
in a Material Adverse Effect;
(e) 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;
(f) 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 Company 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 Company or any of its Subsidiaries, provided,
that (i) 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 Company or any of its Subsidiary, (ii) such Liens do not
extend to any other property of the Company or any of its
Subsidiaries and (iii) the aggregate principal amount of the
Debt secured by Liens permitted by this clause (f) and clauses
(j) and (k) below is permitted to exist under Section 10.4;
(g) 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 of any State
thereof, to secure partial, progress, advance or other payments
pursuant to any contract (other than for borrowed money) or
statute;
(h) 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
Company or any of its Subsidiaries with respect to which the Company
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 Company or any of its Subsidiaries for the
purpose of obtaining a stay or discharge
in the course of any legal proceeding to which the Company or
such Subsidiary is a party; provided, that the aggregate amount
secured by all such Liens referred to in this clause (h) shall
not exceed $5,000,000 at any time;
(i) 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;
(j) purchase money Liens upon or in
property acquired or held by the Company 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 (j),
clause (f) above and clause (k) below is permitted to exist
under Section 10.4; and
(k) Liens not otherwise permitted
hereunder securing Debt of the Company or any Subsidiary,
provided that the aggregate principal amount of the Debt at any
one time outstanding secured by Liens permitted by this clause
(k) and clauses (f) and (j) above is permitted to exist under
Section 10.4.
10.6. Restricted Investments.
(a) Limitation. The Company will not,
and will not permit any of its Subsidiaries to, declare, make
or authorize any Restricted Investment unless immediately after
giving effect to such action:
(i) the aggregate value of all
Restricted Investments of the Company and its
Subsidiaries (valued immediately after such action)
would not exceed the sum of:
(A) $25,000,000, plus
(B) $10,000,000 per
year for each completed fiscal year of the
Company commencing with the Company's fiscal
year beginning on or about December 29, 1996
(calculated on a cumulative basis); and
(ii) no Default or Event of
Default would exist.
(b) Investments of Subsidiaries. Each
Person which becomes a Subsidiary of the Company after the date
of the Closing will be deemed to have made, on the date such
Person becomes a Subsidiary of the Company, all Restricted
Investments of such Person in existence on such date.
Investments in any Person that ceases to be a Wholly-Owned
Subsidiary of the Company after the date of the Closing (but in
which the Company or another Subsidiary continues to maintain
an Investment) will be deemed to have been made on the date on
which such Person ceases to be a Wholly-Owned Subsidiary of the
Company.
(c) General Partnerships.
Notwithstanding anything to the contrary herein set forth, the
Company will not, and will not permit any Subsidiary to, become
a general partner in any general or limited partnership other
than such a partnership that is a Wholly-Owned Subsidiary.
10.7. Restrictions on Dividends of Subsidiaries, Etc.
The Company will not, and will not permit any of its
Subsidiaries to, enter into any agreement which would restrict any
Subsidiary's ability or right to pay dividends to, or make advances to
or Investments in, the Company or, if such Subsidiary is not
directly
owned by the Company, the "parent" Subsidiary of such Subsidiary.
10.8. Sale-and-Leasebacks.
The Company will not, and will not permit any
Subsidiary to, enter into any Sale-and-Leaseback Transaction
unless,
immediately after giving effect thereto, the aggregate amount of all
outstanding Attributable Debt of the Company and its
Subsidiaries does not exceed 5% of Consolidated Net Worth
determined at such time.
10.9. Transactions with Affiliates.
The Company will not and will not permit any
Subsidiary to enter into directly or indirectly any transaction or
Material group of related transactions (including without
limitation the
purchase, lease, sale or exchange of properties of any kind or the
rendering of any service) with any Affiliate (other than the
Company or
another Subsidiary), except in the ordinary course and pursuant to the
reasonable requirements of the Company's or such Subsidiary's
business
and upon fair and reasonable terms no less favorable to the Company or
such Subsidiary than would be
obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
10.10. Merger, Consolidation, Etc.
The Company will not, and will not permit any
Subsidiaries to, consolidate with or merge with any other
corporation or convey, transfer or lease all or substantially all of its
assets in a single transaction or series of transactions to any
Person
(except that a Wholly-Owned Subsidiary of the Company may (x)
consolidate with or merge with, or convey, transfer or lease
substantially all of its assets in a single transaction or series of
transactions to, the Company or another Wholly-Owned Subsidiary of the
Company and (y) convey, transfer or lease all of its assets in
compliance with the provisions of Section 10.11), provided that the
foregoing restriction does not apply to the consolidation or merger of
the Company with, or the conveyance, transfer or lease of all or
substantially all of the assets of the Company in a single
transaction
or series of transactions to, any Person so long as:
(a) the successor formed by such
consolidation or the survivor of such merger or the Person that
acquires by conveyance, transfer or lease substantially all of
the assets of the Company as an entirety, as the case may be
(the "Successor Corporation"), shall be a solvent corporation
organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia;
(b) if the Company is not the
Successor
Corporation, such corporation shall have executed and
delivered to each holder of Notes its assumption of the due and
punctual performance and observance of each covenant and
condition of this Agreement and the Notes (pursuant to such
agreements and instruments as shall be reasonably satisfactory
to the Required Holders), and the Company shall have caused to
be delivered to each holder of Notes an opinion of nationally
recognized independent counsel, or other independent counsel
reasonably satisfactory to the Required Holders, to the effect
that all agreements or instruments effecting such assumption
are enforceable in accordance with their terms and comply with
the terms hereof; and
(c) immediately after giving effect to
such transaction no Default or Event of Default would exist.
No such conveyance, transfer or lease of all or substantially all of the
assets of the Company shall have the effect of releasing the
Company or
any Successor Corporation from its liability under this Agreement
(including Section 8.5) or the Notes.
10.11. Sale of Assets, Etc.
Except as permitted under Section 10.10, the
Company
will not, and will not permit any of its Subsidiaries to, make any Asset
Disposition unless:
(a) in the good faith opinion of the
Company, the Asset Disposition is in exchange for consideration
having a Fair Market Value at least equal to that of the
property exchanged and is in the best interest of the Company
or such Subsidiary; and
(b) immediately after giving effect to
the Asset Disposition, no Default or Event of Default would
exist; and
(c) immediately after giving effect to
the Asset Disposition, (i) the Disposition Value of all
property that was the subject of any Asset Disposition
occurring in the most recent thirty-six calendar months then
ended (together with the assets proposed to be so disposed)
would not exceed 15% of Consolidated Assets as of the end of
the then most recently ended fiscal year of the Company and
(ii) all of such property did not account for more than 15% of
Consolidated Net Income for any of the three most recently
ended fiscal years of the Company.
10.12. Line of Business.
The Company will not, and will not permit any of its
Subsidiaries to, engage in any business if, as a result, the
general
nature of the business in which the Company and its Subsidiaries, taken
as a whole, would then be engaged would be substantially changed from
the general nature of the business in which the Company and its
Subsidiaries, taken as a whole, are engaged on the date of this
Agreement as described in the Memorandum.
10.13. Subordinated Debt Restrictions.
The Company will not, and will not permit any of its
Subsidiaries to, repay or prepay any principal amount of, any
premium,
penalty or make-whole payment with respect to or any interest, fees or
other charges on any Subordinated Debt (including any sinking fund
payments, defeasance payments or similar payments with respect
thereto),
directly or indirectly, or amend or
otherwise modify any provision of any instrument or agreement
evidencing
any Subordinated Debt in any manner which may reasonably be
expected to
be adverse to any holder of a Note; provided, however, that the
Company
may make (a) regularly scheduled
prepayments of principal of, and interest on, the Subordinated Debt in
accordance with the express terms of the Subordinated Debt
Agreement as
in effect on the date of the Closing (and as certified pursuant to
Section 4.11) and (b) optional prepayments of
Subordinated Debt pursuant to Section 9.2 of the Subordinated Debt
Agreement as in effect on the date of the Closing (and as certified
pursuant to Section 4.11), in each case (with respect to the
foregoing
clauses (a) and (b)) so long as no Default or Event of Default
exists or
would exist as a result thereof; provided, further, that this
Section
10.13 shall not be deemed to prohibit the conversion of
Subordinated
Debt solely into common stock of the Company.
10.14. Accounting Changes.
The Company will not (a) change its fiscal year, or
(b) make, or permit any of its Subsidiaries to make, any change in its
accounting policies of 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 Company shall have delivered to each holder prior to the
effectiveness of any such change a report prepared by a responsible
financial officer of the Company
describing such change and explaining in reasonable detail the
basis
therefor and effect thereof.
10.15. Issuance of Stock by Subsidiaries.
The Company will not permit any Subsidiary,
directly
or indirectly, to issue or sell any of its capital stock, except (a) to
the Company or to a Wholly-Owned Subsidiary of the Company, or (b) sales
of common stock to the extent expressly permitted under Section
10.11.
11. EVENTS OF DEFAULT.
An "Event of Default" shall exist if any of the
following conditions or events shall occur and be continuing:
(a) the Company defaults in the
payment
of any principal or Make-Whole Amount, if any, on any Note when
the same becomes due and payable, whether at maturity or at a
date fixed for prepayment or by declaration or otherwise; or
(b) the Company defaults in the
payment
of any interest on any Note for more than five Business Days
after the same becomes due and payable; or
(c) the Company defaults in the
performance of or compliance with any term contained in
Sections 7.1(d), 9.2, 9.5, 9.6, 9.7 or any subsection of
Section 8 or Section 10; or
(d) the Company defaults in the
performance of or compliance with any term contained herein
(other than those referred to in paragraphs (a), (b) and (c) of
this Section 11) and such default is not remedied within 30
days after the earlier of (i) a Responsible Officer obtaining
actual knowledge of such default and (ii) the Company receiving written
notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to
refer specifically to this paragraph (d) of Sec-
tion 11); or
(e) any representation or warranty made
in writing by or on behalf of the Company or by any officer of
the Company in this Agreement or in any writing furnished in
connection with the transactions contemplated hereby proves to
have been false or incorrect in any material respect on the
date as of which made; or
(f) (i) the Company or any
Subsidiary is
in default (as principal or as guarantor or other surety) in
the payment of any principal of or premium or make-whole amount
or interest on any Debt that is outstanding in an aggregate
principal amount of at least $4,000,000 beyond any period of grace
provided with respect thereto, or (ii) the Company or
any Subsidiary is in default in the performance of or com-
pliance with any term of any evidence of any Debt in an aggre-
gate outstanding principal amount of at least $4,000,000 or of
any mortgage, indenture or other agreement relating thereto or
any other condition exists, and as a consequence of such
default or condition such Debt has become, or has been declared
(or one or more Persons are entitled to declare such Debt to
be), due and payable before its stated maturity or before its
regularly scheduled dates of payment, or (iii) as a consequence
of the occurrence or continuation of any event or condition
(other than the passage of time or the right of the holder of
Debt to convert such Debt into equity interests), (x) the
Company or any Subsidiary has become obligated to purchase or
repay Debt before its regular maturity or before its regularly
scheduled dates of payment in an aggregate outstanding
principal amount of at least $4,000,000, or (y) one or more
Persons have the right to require the Company or any Subsidiary
so to purchase or repay such Debt; or
(g) the Company or any Subsidiary (i) is
generally not paying, or admits in writing its inability to
pay, its debts as they become due, (ii) files, or consents by
answer or otherwise to the filing against it of, a petition for
relief or reorganization or arrangement or any other petition
in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other
similar law of any jurisdiction, (iii) makes an assignment for
the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial
part of its property, (v) is adjudicated as insolvent or to be
liquidated, or (vi) takes corporate action
for the purpose of any of the foregoing; or
(h) a court or governmental
authority of
competent jurisdiction enters an order appointing, without
consent by the Company or any of its Subsidiaries, a custodian,
receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a
petition for relief or reorganization or any other petition in
bankruptcy or for liquidation or to take advantage of any
bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Company or
any of its Subsidiaries, or any such petition shall be filed
against the Company or any of its Subsidiaries and such
petition shall not be dismissed within 60 days; or
(i) a final judgment or judgments for
the payment of money aggregating in excess of $5,000,000 are
rendered against one or more of the Company and its
Subsidiaries and which judgments are not, within 60 days after
entry thereof, bonded, discharged or stayed pending appeal, or
are not discharged within 60 days after the expiration of such
stay; or
(j) the Company shall fail to
comply
with or to perform any provision of, or otherwise be in default
beyond any applicable grace period under, the Credit Agreement
or the Subordinated Debt Agreement (whether or not such failure
or default is subsequently waived, consented to or rescinded);
or
(k) any guarantor shall fail to comply
with or to perform any provision of, or otherwise be in default
beyond any applicable grace period under the Bank Guaranty;
or the Bank Guaranty shall fail to remain in full force and
effect in accordance with its terms or any guarantor thereunder
shall take any action to disaffirm any of its obligations
thereunder or terminate any provisions thereof; or
(l) if (i) any Plan shall fail to
satisfy the minimum funding standards of ERISA or the Code for
any plan year or a waiver of such standards or extension of
any amortization period is sought or granted under section 412
of the Code, (ii) a notice of intent to terminate any Plan
shall have been or is reasonably expected to be filed with the
PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer
any Plan or the PBGC shall have notified the Company or any ERISA
Affiliate that a Plan may become a subject of any such
proceedings, (iii) the aggregate amount of unfunded
accumulated benefit obligations (within the meaning of FASB No.
87, and in any event determined without giving effect to any
overfunding) shall exceed $10,000,000, (iv) the Company or any
ERISA Affiliate shall have incurred or is reasonably expected
to incur any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to
employee benefit plans, (v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (vi) the Company or
any Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits in
a manner that would increase the liability of the Company or
any Subsidiary thereunder; and any such event or events
described in clauses (i) through (vi) above, either
individually or together with any other such event or events,
could reasonably be expected to have a Material Adverse Effect.
As used in Section 11(l), the terms "employee benefit plan" and
"employee welfare benefit plan" shall have the respective meanings
assigned to such terms in Section 3 of ERISA.
12. REMEDIES ON DEFAULT, ETC.
12.1. Acceleration.
(a) If an Event of Default with respect to the
Company described in paragraph (g) or (h) of Section 11 has
occurred,
all the Notes then outstanding shall automatically become
immediately
due and payable.
(b) Without limiting paragraph (c) below, if any
other Event of Default has occurred and is continuing, any holder or
holders of more than 50% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices
to the Company, declare all the Notes then outstanding to be
immediately
due and payable.
(c) If any Event of Default described in
paragraph (a) or (b) of Section 11 has occurred and is continuing, any
holder or holders of Notes at the time outstanding affected by such
Event of Default may at any time, at its or their option, by notice or
notices to the Company, declare all the Notes held by it or them to be
immediately due and payable.
Upon any Notes becoming due and payable under
this
Sec-tion 12.1, whether automatically or by declaration, such Notes will
forthwith mature and the entire unpaid principal amount of such
Notes,
plus (x) all accrued and unpaid interest thereon and (y) the
Make-Whole
Amount determined in respect of such principal amount (to the full
extent permitted by applicable law), shall all be immediately due and
payable, in each and every case without pre-sentment, demand,
protest or
further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note
has the right to maintain its investment in the Notes free from
prepayment by the Company (except as herein specifically provided for)
and that the provision for payment of a Make-Whole Amount by the Company
in the event that the Notes are prepaid or are accelerated as a
result
of an Event of De-fault, is intended to provide compensation for the
deprivation of such right under such circumstances.
12.2. Other Remedies.
If any Default or Event of Default has occurred and is
continuing, and irrespective of whether any Notes have become or have
been declared immediately due and payable under Section 12.1, the holder
of any Note at the time outstanding may proceed to protect and
enforce
the rights of such holder by an action at law, suit in equity or other
appropriate proceeding, whether for the specific performance of any
agreement contained herein or in any Note, or for an injunction
against
a violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or
otherwise.
12.3. Rescission.
At any time after any Notes have been declared due and
payable pursuant to clause (b) or (c) of Section 12.1, the holders of
not less than 50% in principal amount of the Notes then
outstanding, by written notice to the Company, may rescind and
annul any
such declaration and its consequences if (a) the Company has paid all
overdue interest on the Notes, all principal of and Make-Whole
Amount,
if any, on any Notes that are due and payable and are unpaid other than
by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent
permitted by
applicable law) any overdue interest in respect of the Notes, at the
Default Rate, (b) all Events of Default and Defaults, other than non-
payment of amounts that have become due solely by reason of such
declaration, have been cured or have been waived pursuant to
Section 17,
and (c) no judgment or decree has been entered for the payment of any
monies due pursuant hereto or to the Notes. No rescission and
annulment
under this Section 12.3 will extend to or affect any subsequent
Event of
Default or Default or impair any right consequent thereon.
12.4. No Waivers or Election of Remedies, Expenses,
etc.
No course of dealing and no delay on the part of any
holder of any Note in exercising any right, power or remedy shall
operate as a waiver thereof or otherwise prejudice such holder's rights,
powers or remedies. No right, power or remedy conferred by this
Agreement or by any Note upon any holder thereof shall be exclusive of
any other right, power or remedy referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise. Without
limiting the obligations of the Company under Section 15, the
Company
will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder
incurred in any enforcement or collection under this Section 12,
including, without limitation, reasonable attorneys' fees, expenses and
disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. Registration of Notes.
The Company shall keep at its principal executive
office a register for the registration and registration of
transfers of
Notes. The name and address of each holder of one or more Notes, each
transfer thereof and the name and address of each transferee of one or
more Notes shall be registered in such register. Prior to due
presentment for registration of transfer, the Person in whose name any
Note shall be registered shall be deemed and treated as the owner and
holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall
give to any holder of a Note that is an Institutional Investor
promptly
upon request therefor, a complete and correct copy of the names and
addresses of all regis-tered holders of Notes.
13.2. Transfer and Exchange of Notes.
Upon surrender of any Note at the principal
executive
office of the Company for registration of transfer or exchange (and in
the case of a surrender for registration of transfer, duly endorsed or
accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or his attorney duly authorized in
writing and accompanied by the address for notices of each
transferee of
such Note or part thereof), the Company shall execute and deliver, at
the Company's expense (except as provided below), one or more new Notes
(as requested by the holder thereof) in exchange therefor, in an
aggregate principal amount equal to the unpaid principal amount of the
surrendered Note. Each such new Note shall be payable to such
Person as
such holder may request and shall be substantially in the form of
Exhibit A. Each such new Note shall be dated and bear interest
from the
date to which interest shall have been paid on the surrendered Note or
dated the date of the surrendered Note if no interest shall have been
paid thereon. The Company may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any
such transfer of Notes. Notes shall not be transferred in
denominations
of less than $100,000, provided that if necessary to enable the
registration of transfer by a holder of its entire holding of
Notes, one
Note may be in a denomination of less than $100,000. Any
transferee, by
its acceptance of a Note registered in its name (or the name of its
nominee), shall be deemed to have made the representation set forth in
Section 6.2.
13.3. Replacement of Notes.
Upon receipt by the Company of evidence
reasonably
satisfactory to it of the ownership of and the loss, theft,
destruction
or mutilation of any Note (which evidence shall be, in the case of an
Institutional Investor, notice from such
Institutional Investor of such ownership and such loss, theft,
destruction or mutilation), and
(a) in the case of loss, theft or
destruction, of
indemnity reasonably satisfactory to it (provided that if the
holder of such Note is, or is a nominee for, an original
purchaser or another holder of a Note with a minimum net worth
of at least $50,000,000, such Person's own unsecured agreement
of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon
surrender and
cancellation thereof,
the Company at its own expense shall execute and deliver, in lieu
thereof, a new Note, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or
mutilated Note or dated the date of such lost, stolen, destroyed or
mutilated Note if no interest shall have been paid thereon.
14. PAYMENTS ON NOTES.
14.1. Place of Payment.
Subject to Section 14.2, payments of principal, Make-
Whole Amount, if any, and interest becoming due and payable on the Notes
shall be made in Chicago, Illinois at the principal office of a
bank or
trust company in such jurisdiction which the Company agrees to
designate
at any time when there is a holder of any Note not entitled to the
benefits of Section 14.2 hereof.
14.2. Home Office Payment.
So long as you or your nominee shall be the
holder of
any Note, and notwithstanding anything contained in Section 14.1 or in
such Note to the contrary, the Company will pay all sums becoming due on
such Note for principal, Make-Whole Amount, if any, and interest by the
method and at the address specified for such purpose below your
name in
Schedule A, or by such other method or at such other address as you
shall have from time to time specified to the Company in writing for
such purpose, without the
presentation or surrender of such Note or the making of any
notation
thereon, except that upon written request of the Company made
concurrently with or reasonably promptly after payment or
prepayment in
full of any Note, you shall surrender such Note for cancellation,
reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently
designated by the Company pursuant to Section 14.1. Prior to any sale
or other disposition of any Note held by you or your nominee you will,
at your election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or
surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 13.2. The Company will afford the benefits of this
Section 14.2 to any Institutional Investor that is the direct or
indirect
transferee of any Note purchased by you under this Agreement and that
has made the same agreement relating to such Note as you have made in
this Section 14.2.
15. EXPENSES, ETC.
15.1. Transaction Expenses.
Whether or not the transactions contemplated
hereby
are consummated, the Company will pay all costs and expenses
(including
reasonable attorneys' fees of Schiff Hardin & Waite, as your
special
counsel) incurred by you and each Other Purchaser or holder of a Note in
connection with such transactions and all costs and expenses
(including
reasonable attorneys' fees) incurred by you and each Other
Purchaser or
holder of a Note in connection with any amendments, waivers or
consents
under or in respect of this Agree-ment or the Notes (whether or not such
amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any
rights under this Agree-ment or the Notes or in responding to any
subpoena or other legal process or informal investigative demand issued
in connection with this Agreement or the Notes, or by reason of
being a
holder of any Note, and (b) the costs and expenses, including
financial
advisors' fees, incurred in connection with the insolvency or
bankruptcy
of the Company or any Subsidiary or in connection with any work-out or
restructuring of the transactions contemplated hereby and by the Notes.
The Company will pay, and will save you and each other holder of a Note
harmless from, all claims in respect of any fees, costs or expenses if
any, of brokers and finders (other than those retained by you).
15.2. Survival.
The obligations of the Company under this Section 15
will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the
Notes, and
the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained
herein
shall survive the execution and delivery of this Agreement and the
Notes, the purchase or transfer by you of any Note or portion
thereof or
interest therein and the payment of any Note, and may be relied
upon by
any subsequent holder of a Note, regardless of any investi-gation made
at any time by or on behalf of you or any other holder of a Note. All
statements contained in any certificate or other instrument
delivered by
or on behalf of the Company pursuant to this Agreement shall be
deemed
representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agreement and the Notes
embody
the entire agreement and understanding between you and the Company and
supersede all prior agreements and understandings relating to the
subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1. Requirements.
This Agreement and the Notes may be amended, and the
observance of any term hereof or of the Notes may be waived (either
retroactively or prospectively), with (and only with) the written
consent of the Company and the Required Holders, except that (a) no
amendment or waiver of any of the provisions of Section 1, 2, 3, 4, 5,
6 or 21 hereof, or any defined term (as it is used therein), will be
effective as to you unless consented to by you in writing, and (b) no
such amendment or waiver may, without the written consent of the holder
of each Note at the time outstanding affected thereby, (i) subject to
the provisions of Section 12 relating to acceleration or
rescission,
change the amount or time of any prepayment or payment of principal of,
or reduce the rate or change the time of payment or method of
computation of interest or of the Make-Whole Amount on, the Notes, (ii)
change the percentage of the principal amount of the Notes the
holders
of which are required to consent to any such amendment or waiver, or
(iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or 20.
17.2. Solicitation of Holders of Notes.
(a) Solicitation. The Company will provide each
holder of the Notes (irrespective of the amount of Notes then owned by
it) with sufficient information, sufficiently far in advance of the date
a decision is required, to enable such holder to make an informed and
considered decision with respect to any proposed amendment, waiver or
consent in respect of any of the provisions hereof or of the Notes. The
Company will deliver executed or true and correct copies of each
amendment, waiver or consent effected pursuant to the provisions of this
Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the
consent
or approval of, the requisite holders of Notes.
(b) Payment. The Company will not directly or
indirectly pay or cause to be paid any remuneration, whether by way of
supplemental or additional interest, fee or otherwise, or grant any
security, to any holder of Notes as consideration for or as an
inducement to the entering into by any holder of Notes or any
waiver or
amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently
granted,
on the same terms, ratably to each holder of Notes then outstanding even
if such holder did not consent to such waiver or amendment.
17.3. Binding Effect, etc.
Any amendment or waiver consented to as provided in
this Section 17 applies equally to all holders of Notes and is
binding
upon them and upon each future holder of any Note and upon the
Company
without regard to whether such Note has been marked to indicate
such
amendment or waiver. No such amendment or waiver will extend to or
affect any obligation, covenant, agreement, De-fault or Event of Default
not expressly amended or waived or impair any right consequent
thereon.
No course of dealing between the Company and the holder of any Note nor
any delay in exercising any rights hereunder or under any Note
shall
operate as a waiver of any rights of any holder of such Note. As used
herein, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
17.4. Notes held by Company, etc.
Solely for the purpose of determining whether the
holders of the requisite percentage of the aggregate principal
amount of
Notes then outstanding approved or consented to any amendment,
waiver or
consent to be given under this Agreement or the Notes, or have
directed
the taking of any action provided herein or in the Notes to be
taken
upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of
its Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for
hereunder
shall be in writing and sent (a) by telecopy if the sender on the same
day sends a confirming copy of such notice by a recognized
overnight
delivery service (charges prepaid), or (b) by registered or
certified
mail with return receipt requested (postage prepaid), or (c) by a
recognized overnight delivery service (with charges prepaid). Any such
notice must be sent:
(i) if to you or your nominee, to you or
it at the address specified for such communications in Schedule
A, or at such other address as you or it shall have specified
to the Company in writing,
(ii) if to any other holder of any Note,
to such holder at such address as such other holder shall have
specified to the Company in writing, or
(iii) if to the Company, to the
Company at its address set forth at the beginning hereof to the
attention of Chief Financial Officer, or at such other address
as the Company shall have specified to the holder of each Note
in writing.
Notices under this Section 18 will be deemed given only when
actually
received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto,
including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents received by
you at the Closing (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter
furnished to you, may be reproduced by you by any photographic,
photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced.
The Company agrees and stipulates that, to the extent permitted by
applicable law, any such reproduc-tion shall be admissible in evidence
as the original itself in any judicial or administrative proceeding
(whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence. This Section 19 shall not
prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original,
or from introducing evidence to demonstrate the
inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "Confidential
Information" means information delivered to you in writing by or on
behalf of the Company or any Subsidiary in connection with the
transactions contemplated by or otherwise pursuant to this Agreement
that is proprietary in nature and that was clearly marked or labeled
when received by you as being confidential information of the Company or
such Subsidiary, provided that such term does not include information
that (a) was publicly known or otherwise known to you prior to the time
of such disclosure, (b) subsequently becomes publicly known through no
act or omission by you or any person acting on your behalf, (c)
otherwise becomes known to you other than through disclosure by the
Company or any Subsidiary or (d) constitutes financial statements
delivered to you under Section 7.1 that are otherwise publicly
available. You will use your best efforts to maintain the
confidentiality of such Confidential Information in accordance with
procedures adopted by you in good faith to protect confidential
information of third parties
delivered to you, provided that you may deliver or disclose Confidential
Information to (i) your directors, officers, employ-ees, agents,
attorneys and affiliates (to the extent such disclo-sure reasonably
relates to the administration of the investment represented by your
Notes), (ii) your financial advisors and other professional advisors who
agree to hold confidential the
Confidential Information substantially in accordance with the terms of
this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or
any part thereof or any participation therein (if such Person has agreed
in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (v) any Person from which
you offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information
to be bound by the provisions of this Section 20), (vi) any federal or
state regulatory authority having jurisdiction over you, (vii) the
National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires
access to information about your investment portfolio or (viii) any
other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or
order applicable to you, (x) in response to any subpoena or other legal
process, (y) in connection with any litigation to which you are a party
or (z) if an Event of Default has occurred and is continuing, to the
extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the
rights and remedies under your Notes and this Agreement. Each holder of
a Note, by its acceptance of a Note, will be deemed to have agreed to be
bound by and to be entitled to the benefits of this Section 20 as though
it were a party to this Agreement. On reasonable request by the Company
in connection with the delivery to any holder of a Note of information
required to be delivered to such holder under this Agreement or
requested by such holder (other than a holder that is a party to this
Agreement or its nominee), such holder will enter into an agreement with
the Company embodying the provisions of this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your
Affiliates as the purchaser of the Notes that you have agreed to
purchase hereunder, by written notice to the Company, which notice shall
be signed by both you and such Affiliate, shall contain such Affiliate's
agreement to be bound by this Agreement and shall contain a confirmation
by such Affiliate of the accuracy with respect to it of the
representations set forth in Section 6. Upon receipt of such notice,
wherever the word "you" is used in this Agreement (other than in this
Section 21), such word shall be deemed to refer to such Affiliate in
lieu of you. In the event that such Affiliate is so substituted as a
purchaser hereunder and such Affiliate thereafter transfers to you all
of the Notes then held by such Affiliate, upon receipt by the Company of
notice of such transfer, wherever the word "you" is used in this
Agreement (other than in this Section 21), such word shall no longer be
deemed to refer to such Affiliate, but shall refer to you, and you shall
have all the rights of an original holder of the Notes under this
Agreement.
22. MISCELLANEOUS.
22.1. Successors and Assigns.
All covenants and other agreements contained in this
Agreement by or on behalf of any of the parties hereto bind and inure to
the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so
expressed or not.
22.2. Payments Due on Non-Business Days.
Anything in this Agreement or the Notes to the
contrary notwithstanding, any payment of principal of or Make-Whole
Amount or interest on any Note that is due on a date other than a
Business Day shall be made on the next succeeding Business Day. If the
date of payment is extended to the next succeeding Business Day by
reason of the preceding sentence, the period of such extension shall be
included in the computation of the interest payable on such next
succeeding Business Day.
22.3. Severability.
Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
(to the full extent permitted by law) not invalidate or render
unenforceable such provision in any other jurisdiction.
22.4. Construction.
Each covenant contained herein shall be construed
(absent express provision to the contrary) as being independent of each
other covenant contained herein, so that compliance with any one
covenant shall not (absent such an express contrary provision) be deemed
to excuse compliance with any other covenant. Where any provision
herein refers to action to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be applicable whether
such action is taken directly or indirectly by such Person.
22.5. Counterparts.
This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which
together shall constitute one instrument. Each counterpart may consist
of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto.
22.6. Governing Law.
This Agreement shall be construed and enforced in
accordance with, and the rights of the parties shall be governed by, the
law of the State of Illinois excluding choice-of-law principles of the
law of such State that would require the
application of the laws of a jurisdiction other than such State.
* * * * *
[Signature page to follow]
If you are in agreement with the foregoing,
please
sign the form of agreement on the accompanying counterpart of this
Agreement and return it to the Company, whereupon the foregoing
shall
become a binding agreement between you and the Company.
Very truly yours,
EXCEL INDUSTRIES, INC.
By:
Title:
The foregoing is hereby
agreed to as of the
date thereof.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By:
Title:
<PAGE>
SCHEDULE A
INFORMATION RELATING TO PURCHASERS
Name and Address of Purchaser
Principal Amount of
Notes to be Purchased
(A) THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
(1) All payments shall be made by wire transfer of immediately
available funds for credit, not later than 12 noon New York time,
to:
Account No.: 050-54-526
Morgan Guaranty Trust Company of New York
23 Wall Street
New York, New York 10015
(ABA No. 021-000-238)
Each such wire transfer shall set forth the name of the
Company, a reference to "7.78% Senior Notes due April 30, 2011,
Security No. !INV5388!, and the application (as among principal,
interest and Make-Whole Amount) of the payment being made.
$47,500,000
(2) All notices of payments and written confirmations of such wire
transfers:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102
Attention: Manager, Investment
Operations Group
Telephone: (201) 802-5260
Telecopy: (201) 802-8055
(3) All other communications:
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza,
180 North Stetson Street
Suite 5600
Chicago, Illinois 60601-6716
Attention: Managing Director
Telephone: (312) 540-0931
Telecopy: (312) 540-4222
(4) Recipient of telephonic prepayment notices:
Attention: Manager, Investment Structuring and Pricing
Telephone: (201) 802-6660
Telecopy: (201) 802-9425
(5) Tax Identification No. 22-1211670
(B) JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY
(1) All payments shall be made by wire transfer of immediately
available funds for credit, not later than 12 noon, Boston time,
to:
The First National Bank of Boston
ABA No. 011000390
Boston, Massachusetts 02110
Account of: John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account Number: 541-55417
On Order of: Excel Industries, Inc.
[PPN No.]
$28,500,000
(2) Contemporaneous with the above wire transfer, advice setting
forth: (a) the full name, interest rate and maturity date of the
Notes or other obligations; (b) allocation of payment between
principal and interest and any special payment; and (c) name and
address of Bank (or Trustee) from which wire transfer was sent
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10
(3) All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10
(4) All other communications to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Bond and Corporate Finance Dept. T-57
(5) All securities shall be registered in the name of John
Hancock Mutual Life Insurance Company.
(6) Tax I.D. No. 04-1414660
(C) THE MARITIME LIFE ASSURANCE COMPANY
(1) All payments shall be made by wire transfer of immediately
available funds for credit, not later than 12 noon, Halifax time,
to:
Bank: Bank of Nova Scotia
New York Agency
New York
ABA No. 026002532
Beneficiary Bank: Bank of Nova Scotia
Transit: 70003
Halifax Commercial Banking Center
Halifax, N.S.
Beneficiary Name: The Maritime Life Assurance Company
Account No. 2018-12
On Order of: Excel Industries, Inc.
[PPN No.]
$3,000,000
(2) Contemporaneous with the above wire transfer, advice setting
forth: (a) the full name, interest rate and maturity date of the
Notes or other obligations; (b) allocation of payment between
principal and interest and any special payment; and (c) name and
address of Bank (or Trustee) from which wire transfer was sent,
shall be delivered or mailed to:
The Maritime Life Assurance Company
2701 Dutch Village Road
Halifax, NS B3J 2X5 Canada
Attention: Supervisor of Investment Accounting
(3) All other communications to:
with a copy to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Bond and Corporate Finance Dept., T-57
(4) All securities shall be registered in the name of The Maritime
Life Assurance Company.
(5) All securities shall be delivered to:
The Maritime Life Assurance Company
2701 Dutch Village Road
Halifax, NS B3J 2X5 Canada
Attention: Director, Bonds and Corporate Finance
(6) Executed private placement documents, original closing papers
and conformed copies shall be delivered to, and executed by:
The Maritime Life Assurance Company
2701 Dutch Village Road
Halifax, NS B3J 2X5 Canada
Attention: Director, Bonds and Corporate Finance
(D) MELLON BANK, N.A., AS TRUSTEE FOR AT&T MASTER PENSION TRUST
(1) All payments shall be made by wire transfer of immediately
available funds for credit, not later than 12 noon, Boston time,
to:
Mellon Bank, N.A.
ABA No. 043000261
Credit to: CC3971-8
Further credit to Account No.: 179-168
Pittsburgh, Pennsylvania 15230
$2,000,000
(2) Contemporaneous with the above wire transfer, advice setting
forth: (a) the full name, interest rate and maturity date of the
Notes or other obligations; (b) allocation of payment between
principal and interest and any special payment; and (c) name and
address of Bank (or Trustee) from which wire transfer was sent,
shall be delivered or mailed to:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15230
(3) All other communications to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Stephen A. MacLean
Bond and Corporate Finance Dept., T-57
with a copy to:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Attention: Bernadette Rist
(4) All securities acquired for the AT&T Master Pension Trust
shall be registered in the name of MELLON BANK, N.A., TRUSTEE UNDER
MASTER TRUST AGREEMENT OF AT&T CORPORATION DATED JANUARY 1, 1984
FOR EMPLOYEE PENSION PLANS-AT&T-JOHN HANCOCK-PRIVATE PLACEMENT and
execution documents shall be executed by Mellon Bank, N.A., as
Trustee for AT&T Master Pension Trust.
(5) All securities acquired for the AT&T Master Pension Trust
shall be delivered to:
Mellon Securities Trust company
120 Broadway - 13th Floor
New York, New York 10271
Attn: Robert A. Ferraro
(6) Executed private placement documents, original closing papers
and conformed copies shall be delivered to:
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
Attention: Ms. Bernadette Rist
(7) Tax I.D. No. 13-3187026
(E) JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
(1) All payments shall be made by wire transfer of immediately
available funds for credit, not later than 12 noon, Boston time,
to:
The First National Bank of Boston
ABA No. 011000390
Boston, Massachusetts 02110
Account of: John Hancock Mutual Life Insurance Company
Private Placement Collection Account
Account Number 541-55417
On Order of: Excel Industries, Inc.
[PPN No.]
$2,000,000
(2) Contemporaneous with the above wire transfer, advice setting
forth: (a) the full name, interest rate and maturity date of the
Notes or other obligations; (b) allocation of payment between
principal and interest and any special payment; and (c) name and
address of Bank (or Trustee) from which wire transfer was sent
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10
(3) All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Securities Accounting Division T-10
(4) All other communications to:
John Hancock Mutual Life Insurance Company
John Hancock Place
200 Clarendon Street
Boston, MA 02117
Attention: Bond and Corporate Finance Dept. T-57
(5) All securities shall be registered in the name of John Hancock
Variable Life Insurance Company.
(6) Tax I.D. No. 04-2664016
(F) MELLON BANK, N.A., AS TRUSTEE FOR NYNEX MASTER PENSION TRUST
(1) All payments shall be made by wire transfer of immediately
available funds for credit, not later than 12 noon, Boston time,
to:
Federal Reserve Bank of Boston
A/C Boston Safe Deposit and Trust Company
ABA: 011001234
DDA: 16-229-9
Reference: NYNEX: NYXF 1783332
$2,000,000
(2) Contemporaneous with the above wire transfer, advice setting
forth: (a) the full name, interest rate and maturity date of the
Notes or other obligations; (b) allocation of payment between
principal and interest and any special payment; and (c) name and
address of Bank (or Trustee) from which wire transfer was sent,
shall be delivered or mailed to:
Mellon Bank, N.A.
One Mellon Bank Center, Room 3346
Pittsburgh, Pennsylvania 15258-0001
Attention: Fran Sistek
(3) All other communications to:
John Hancock Mutual Life Insurance Company
200 Clarendon Street
Boston, MA 02117
Attention: Stephen A. MacLean
Bond and Corporate Finance Dept., T-57
with a copy to:
Mellon Bank, N.A.
One Mellon Bank Center, Room 1935
Pittsburgh, Pennsylvania 15258-0001
Attention: Bernadette T. Rist
(4) All securities acquired for the NYNEX Master Pension Trust
shall be registered in the name of MELLON BANK, N.A., TRUSTEE UNDER
MASTER TRUST AGREEMENT OF NYNEX CORPORATION DATED JANUARY 1, 1984
FOR EMPLOYEE PENSION PLANS-NYNEX-JOHN HANCOCK-PRIVATE PLACEMENT and
execution documents shall be executed by Mellon Bank, N.A., as
Trustee for NYNEX Master Pension Trust.
(5) All securities acquired for the NYNEX Master Pension Trust
shall be delivered to:
Mellon Securities Trust Company
120 Broadway - 13th Floor
New York, New York 10271
ATT: SECURITIES TELLER WINDOW, REF: NYNEX - NYXF 1783332
(6) Executed private placement documents, original closing papers
and conformed copies shall be delivered to:
Mellon Bank, N.A.
One Mellon Bank Center, Room 1935
Pittsburgh, Pennsylvania 15258-0001
Attention: Bernadette T. Rist
(7) Tax I.D. No. 35-1448308
(G) CENTURY INDEMNITY COMPANY
$3,000,000
(1) All payments shall be made by wire transfer of immediately
available funds for credit, not later than 12 noon, New York time,
to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/ AC=9009001802
ABA# 021000021
(2) Contemporaneous with the above wire transfer, advice setting
forth:
OBI=[name of company; description of security; interest
rate, maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made; contact
name and phone.]
(3) All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
CIG & Co.
% CIGNA Investments, Inc.
Attention: Securities Processing S-206
900 Cottage Grove Road
Hartford, Connecticut 06152-2206
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
FAX: 212-552-3107/1005
(4) All other communications to:
CIG & Co.
% CIGNA Investments, Inc.
Attention: Private Securities Division -S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
FAX: 860-726-7203
(5) All securities shall be registered in the name of CIG & Co.
(6) Tax I.D. No. 13-3574027
(H) CONNECTICUT GENERAL LIFE INSURANCE COMPANY, on behalf of one
or more separate accounts
$3,000,000
(1) All payments shall be made by wire transfer of immediately
available funds for credit,not later than 12 noon, New York time,
to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/ AC=9009001802
ABA# 021000021
(2) Contemporaneous with the above wire transfer, advice setting
forth:
OBI=[name of company; description of security; interest
rate, maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made; contact
name and phone.]
(3) All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
CIG & Co.
% CIGNA Investments, Inc.
Attention: Securities Processing S-206
900 Cottage Grove Road
Hartford, Connecticut 06152-2206
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
FAX: 212-552-3107/1005
(4) All other communications to:
CIG & Co.
% CIGNA Investments, Inc.
Attention: Private Securities Division -S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
FAX: 860-726-7203
(5) All securities shall be registered in the name of CIG & Co.
(6) Tax I.D. No. 13-3574027
(I) CONNECTICUT GENERAL LIFE INSURANCE COMPANY
$3,000,000
(1) All payments shall be made by wire transfer of immediately
available funds for credit, not later than 12 noon, New York time,
to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/ AC=9009001802
ABA# 021000021
(2) Contemporaneous with the above wire transfer, advice setting
forth:
OBI=[name of company; description of security; interest
rate, maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made; contact
name and phone.]
(3) All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
CIG & Co.
% CIGNA Investments, Inc.
Attention: Securities Processing S-206
900 Cottage Grove Road
Hartford, Connecticut 06152-2206
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
FAX: 212-552-3107/1005
(4) All other communications to:
CIG & Co.
% CIGNA Investments, Inc.
Attention: Private Securities Division -S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
FAX: 860-726-7203
(5) All securities shall be registered in the name of CIG & Co.
(6) Tax I.D. No. 13-3574027
(J) CONNECTICUT GENERAL LIFE INSURANCE COMPANY, on behalf of one
or more separate accounts
$3,000,000
(1) All payments shall be made by wire transfer of immediately
available funds for credit, not later than 12 noon, New York time,
to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/ AC=9009001802
ABA# 021000021
(2) Contemporaneous with the above wire transfer, advice setting
forth:
OBI=[name of company; description of security; interest
rate, maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made; contact
name and phone.]
(3) All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
CIG & Co.
% CIGNA Investments, Inc.
Attention: Securities Processing S-206
900 Cottage Grove Road
Hartford, Connecticut 06152-2206
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
FAX: 212-552-3107/1005
(4) All other communications to:
CIG & Co.
% CIGNA Investments, Inc.
Attention: Private Securities Division -S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
FAX: 860-726-7203
(5) All securities shall be registered in the name of CIG & Co.
(6) Tax I.D. No. 13-3574027
(K) CONNECTICUT GENERAL LIFE INSURANCE COMPANY, on behalf of one
or more separate accounts
$3,000,000
(1) All payments shall be made by wire transfer of immediately
available funds for credit, not later than 12 noon, New York time,
to:
Chase NYC/CTR/
BNF=CIGNA Private Placements/ AC=9009001802
ABA# 021000021
(2) Contemporaneous with the above wire transfer, advice setting
forth:
OBI=[name of company; description of security; interest
rate, maturity date; PPN; due date and application (as among
principal, premium and interest of the payment being made; contact
name and phone.]
(3) All notices with respect to prepayments, both scheduled and
unscheduled, whether partial or in full, and notice of maturity
shall be delivered or mailed to:
CIG & Co.
% CIGNA Investments, Inc.
Attention: Securities Processing S-206
900 Cottage Grove Road
Hartford, Connecticut 06152-2206
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
FAX: 212-552-3107/1005
(4) All other communications to:
CIG & Co.
% CIGNA Investments, Inc.
Attention: Private Securities Division -S-307
900 Cottage Grove Road
Hartford, Connecticut 06152-2307
FAX: 860-726-7203
(5) All securities shall be registered in the name of CIG & Co.
(6) Tax Identification No. 13-3574027
<PAGE>
SCHEDULE B
DEFINED TERMS
As used herein, the following terms have the respective
meanings set forth below or set forth in the Section hereof
following such term:
"Acceptable Bank" means any bank or trust company (i)
which is organized under the laws of the United States of America or any
State thereof, (ii) which has capital, surplus and undivided profits
aggregating at least $100,000,000, and
(iii) whose long-term unsecured debt obligations (or the long-term
unsecured debt obligations of the bank holding company owning all of the
capital stock of such bank or trust company) shall have been given a
rating of "A" or better by S&P, "A2" or better by Moody's or an
equivalent rating by any other credit rating agency of
recognized national standing.
"Acceptable Broker-Dealer" means any Person other than a
natural person (i) which is registered as a broker or dealer
pursuant to the Exchange Act and (ii) whose long-term unsecured
debt obligations shall have been given a rating of "A" or better by S&P,
"A2" or better by Moody's or an equivalent rating by any other credit
rating agency of recognized national standing.
"Additional Letters of Credit" means the letters of
credit existing on the date hereof and identified on Schedule 10.4 under
the heading "Additional Letters of Credit."
"Affiliate" means, at any time, and with respect to any
Person, (a) any other Person that at such time directly or
indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with, such first Person, and
(b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of
the Company or any Subsidiary or any corporation of which the Company
and its Subsidiaries beneficially own or hold, in the
aggregate, directly or indirectly, 10% or more of any class of
voting or equity interests. As used in this definition, "Control" means
the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by con-tract
or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the
Company.
"Anderson" means Anderson Industries, Inc., a Delaware
corporation, and its successors and assigns.
"Asset Disposition" means any Transfer except (a) any
Transfer from a Subsidiary to the Company or a Wholly-Owned
Subsidiary; and (b) any Transfer made in the ordinary course of
business and involving only property that is either (i) inventory held
for sale or (ii) equipment, fixtures, supplies or materials no longer
required in the operation of the business of the Company or any of its
Subsidiaries or that is obsolete.
"Attributable Debt" means, as to any particular lease
relating to a Sale-and-Leaseback Transaction, the greater of (i) the
present value of all Lease Rentals required to be paid by the Company or
any Subsidiary under such lease during the remaining
term thereof (determined in accordance with generally accepted
financial practice using a discount factor equal to the interest rate
implicit in such lease if known or, if not known, of 8% per annum) and
(ii) the Fair Market Value of the property subject to such Sale-and-
Leaseback Transaction as determined at the time of consummation of such
Sale-and-Leaseback Transaction.
"Atwood" means Atwood Industries, Inc., an Illinois
corporation, and its successors and assigns.
"Bank Guaranty" means each Guaranty that is a "Guaranty
Agreement" as such term is defined in the Intercreditor Agreement.
"Business Day" means (a) for the purposes of Section 8.7 only,
any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized to be
closed, and (b) for the purposes of any other provision of this
Agreement, any day other than a Saturday, a Sunday or a day on
which commercial banks in New York, Illinois or Indiana are
required or authorized to be closed.
"Capital Lease" means, at any time, a lease with respect to
which the lessee is required concurrently to recognize the
acquisition of an asset and the incurrence of a liability in
accordance with GAAP.
"Capital Lease Obligation" means, with respect to any
Person and a Capital Lease, the amount of the obligation of such Person
as the lessee under such Capital Lease which would, in
accordance with GAAP, appear as a liability on a balance sheet of such
Person.
"Change in Control" means the occurrence of any of the
following: (a) any person (as such term is used in section 13(d) and
section 14(d)(2) of the Exchange Act as in effect on the date of the
Closing) or persons constituting a group (as such term is used in Rule
13d-5 under the Exchange Act) becoming the "beneficial owners" (as such
term is used in Rule 13d-3 under the Exchange Act as in effect on the
date of the Closing), directly or indirectly, of (i) more than 30% of
the total voting power of all classes then outstanding of the Company's
Voting Stock, or (ii) all or
substantially all of the properties and assets of the Company; (b)
during any period of twelve consecutive calendar months,
individuals who were directors of the Company on the first day of such
period or who were elected or nominated by a majority of
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
Company; or (c) any "Change in Control" as such term is
defined in the Credit Agreement or the Subordinated Debt Agreement (or
any similar event that gives rise to a right of any creditor thereunder
to require a prepayment or purchase of the debt held by it thereunder).
"Closing" is defined in Section 3.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the rules and regulations
promulgated thereunder from time to time.
"Company" means Excel Industries, Inc., an Indiana
corporation.
"Confidential Information" is defined in Section 20.
"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 5.5.
"Consolidated Assets" means, at any time, the total
assets of the Company and its Subsidiaries which would be shown as
assets on a consolidated balance sheet of the Company and its
Subsidiaries as of such time prepared in accordance with GAAP,
after eliminating all amounts properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries.
"Consolidated Interest Expense" means, for any period, with
respect to the Company 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 Company 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 Company and its
Consolidated Subsidiaries, determined as of such date in accordance with
GAAP.
"Consolidated Tangible Net Worth" means, as of any time of
determination thereof, Consolidated Net Worth at such time minus (a) the
net book amount of all assets of the Company and its
Subsidiaries (after deducting any reserves applicable thereto)
which would be shown as intangible assets on a consolidated balance
sheet of the Company and its Subsidiaries as of such time prepared in
accordance with GAAP and (b) any net gains or losses
attributable to cumulative foreign currency translation
adjustments.
"Control Event" means (i) the execution by the Company or any
of its Subsidiaries or Affiliates of any agreement or letter of intent
with respect to any proposed transaction or event or series of
transactions or events which, individually or in the aggregate, may
reasonably be expected to result in a Change in Control, (ii) the
execution of any written agreement which, when fully performed by the
parties thereto, would result in a Change in Control, or
(iii) the making of any written offer by any person (as such term is
used in section 13(d) and section 14(d)(2) of the Exchange Act as in
effect on the date of the Closing) or related persons
constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act as in effect on the date of the Closing) to the
holders of the common stock of the Company, which offer, if
accepted by the requisite number of such holders, would result in a
Change in Control.
"Credit Agreement" means that certain Credit Agreement dated
as of April 1, 1996 among the Company, the financial
institutions party thereto ("Lenders"), Society National Bank, as agent
for the Lenders, and Harris Trust and Savings Bank, as co-
agent for the Lenders, as amended, restated, extended, renewed,
supplemented or otherwise modified from time to time.
"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 an event or condition the occurrence or
existence of which would, with the lapse of time or the giving of notice
or both, become an Event of Default.
"Default Rate" means that rate of interest that is the greater
of (i) 2% per annum above the rate of interest stated in clause (a) of
the first paragraph of the Notes or (ii) 2% over the rate of interest
publicly announced by Morgan Guaranty Trust
Company of New York in New York, New York as its "base" or "prime" rate.
"Disposition Value" means, at any time, with respect to any
property
(a) in the case of property that does not
constitute Subsidiary Stock, the book value thereof, valued at
the time of such disposition in good faith by the Company, and
(b) in the case of property that constitutes
Subsidiary Stock, an amount equal to that percentage of book value
of the assets of the Subsidiary that issued such stock as is equal
to the percentage that the book value of such
Subsidiary Stock represents of the book value of all of the
outstanding capital stock of such Subsidiary (assuming, in
making such calculations, that all Securities convertible into such
capital stock are so converted and giving full effect to all
transactions that would occur or be required in connection with
such conversion) determined at the time of the
disposition thereof, in good faith by the Company.
"EBIT" means, for any period on a Consolidated basis for the
Company 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, (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, and (F) net loss 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 excluded from such Consolidated Net Income;
(ii) Consolidated Interest Expense; and
(iii) charges for federal, state, local and
foreign income taxes.
"Environmental Laws" means any and all Federal, state, local,
and foreign statutes, laws, regulations, ordinances, rules, judgments,
orders, decrees, permits, concessions, grants,
franchises, licenses, agreements or governmental restrictions
relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited
to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and
regulations promulgated thereunder from time to time in effect.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that is treated as a single employer together
with the Company under section 414 of the Code.
"Event of Default" is defined in Section 11.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Existing Liens" means the Liens existing on the date
hereof upon or with respect to property owned by the Company and its
Subsidiaries and specified on Schedule 10.5.
"Fair Market Value" means, at any time and with respect to any
property, the sale value of such property that would be
realized in an arm's-length sale at such time between an informed and
willing buyer and an informed and willing seller (neither being under a
compulsion to buy or sell).
"Foreign Subsidiary" means any Subsidiary that is not
organized under the laws of a State of the United States or the
District of Columbia.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States of America.
"Governmental Authority" means
(a) the government of
(i) the United States of America or any State or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or
which asserts jurisdiction over any properties of the Company
or any Subsidiary, or
(b) any entity exercising executive, legislative,
judicial, regulatory or administrative functions of, or
pertaining to, any such government.
"Guaranty" means, with respect to any Person, any obli-gation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in
effect guaranteeing any indebtedness, dividend or other obligation of
any other Person in any manner, whether di-rectly or indirectly,
including (without limitation) obligations incurred through an
agreement, contingent or otherwise, by such
Person:
(a) to purchase such indebtedness or obligation or
any property constituting security therefor;
(b) to advance or supply funds (i) for the purchase
or payment of such indebtedness or obligation, or (ii) to maintain
any working capital or other balance sheet condition or any income
statement condition of any other Person or
otherwise to advance or make available funds for the purchase or
payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties
or services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of any other Person to
make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebt-
edness or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the
obligor under any Guaranty, the indebtedness or other obligations that
are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.
"Hazardous Material" means any and all pollutants, toxic or
hazardous wastes or any other substances that might pose a
hazard to health or safety, the removal of which may be required or the
generation, manufacture, refining, production, processing,
treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage, or filtration of which
is or shall be restricted, prohibited or penalized by any
applicable law (including, without limitation, asbestos, urea
formaldehyde foam insulation and polycholorinated biphenyls).
"holder" means, with respect to any Note, the Person in whose
name such Note is registered in the register maintained by the Company
pursuant to Section 13.1.
"Institutional Investor" means (a) any original purchaser of
a Note, (b) any holder of a Note holding more than 5% of the
aggregate principal amount of the Notes then outstanding, and (c) any
bank, trust company, savings and loan association or other
financial institution, any pension plan, any investment company, any
insurance company, any broker or dealer, or any other similar financial
institution or entity, regardless of legal form.
"Intercreditor Agreement" means that certain
Intercreditor Agreement dated as of the date of the Closing by and among
you, the Other Purchasers and the parties to the Credit
Agreement, substantially in the form of Exhibit D, as amended,
restated, extended, renewed, supplemented, or otherwise modified from
time to time.
"Investment" means any investment, made in cash or by
delivery of property, by the Company or any of its Subsidiaries (i) in
any Person, whether by acquisition of stock, indebtedness or
other obligation or Security, or by loan, Guaranty, advance,
capital contribution or otherwise, or (ii) in any property.
"Lease Rentals" means, with respect to any period, the sum of
the rental and other obligations required to be paid during such period
by the Company or any Subsidiary as lessee under all leases of real or
personal property (other than Capital Leases), excluding any amount
required to be paid by the lessee (whether or not therein designated as
rental or additional rental) on account of maintenance and repairs,
insurance, taxes, assessments, water rates and similar charges, provided
that, if at the date of
determination, any such rental or other obligations (or portion
thereof) are contingent or not otherwise definitely determinable by the
terms of the related lease, the amount of such obligations (or such
portion thereof) (i) shall be assumed to be equal to the
amount of such obligations for the period of 12 consecutive
calendar months immediately preceding the date of determination or (ii)
if the related lease was not in effect during such preceding 12-month
period, shall be the amount estimated by a Senior
Financial Officer of the Company on a reasonable basis and in good
faith.
"Letters of Credit" means letters of credit issued under the
Credit Agreement, provided that the undrawn amount thereof does not
exceed $10,000,000.
"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".
"Make-Whole Amount" is defined in Section 8.7.
"Material" means material in relation to the business,
operations, affairs, financial condition, assets, properties, or
prospects of the Company and its Subsidiaries taken as a whole.
"Material Adverse Effect" means a material adverse effect on
(a) the business, operations, affairs, financial condition,
assets or properties of the Company and its Subsidiaries taken as a
whole, or (b) the ability of the Company to perform its
obligations under this Agreement and the Notes, or (c) the validity or
enforceability of this Agreement or the Notes.
"Memorandum" is defined in Section 5.3.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means any Plan that is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of
ERISA).
"Notes" is defined in Section 1.
"Officer's Certificate" means a certificate of a Senior
Financial Officer or of any other officer of the Company whose
responsibilities extend to the subject matter of such certificate.
"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.
"Other Agreements" is defined in Section 2.
"Other Purchasers" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA or any successor thereto.
"Permitted Priority Debt Amount" means (a) during the
period of the date hereof through March 31, 1997, the greater of (i)
$10,000,000 and (ii) 10% of Consolidated Tangible Net Worth; and (b)
after March 31, 1997, 10% of Consolidated Tangible Net
Worth.
"Person" means an individual, partnership, corporation,
limited liability company, association, trust, unincorporated
organization, or a government or agency or political subdivision
thereof.
"Plan" means an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the
Company or any ERISA Affiliate or with respect to which the Company or
any ERISA Affiliate may have any liability.
"Priority Debt" means, without duplication, the sum of (a) all
Debt of the Company secured by any Lien with respect to any property
owned by the Company or any of its Subsidiaries, and (b) all secured and
unsecured Debt of Subsidiaries (including, without limitation, any Debt
of the Company with respect to which a
Subsidiary has provided a Guaranty; provided, however, that
Priority Debt shall not include: (i) unsecured Debt of
Subsidiaries owed to the Company; (ii) Debt evidenced by the Bank
Guaranty so long as the Intercreditor Agreement is in full force and
effect; and (iii) Debt evidenced by the Subordinated Debt
Guaranty so long as the Senior Private Placement Debt constitutes
"Senior Debt" as such term is defined (and used) in the
Subordinated Debt Agreement and the Subordinated Debt Guaranty.
"property" or "properties" means, unless otherwise
specifically limited, real or personal property of any kind,
tangible or intangible, choate or inchoate.
"QPAM Exemption" means Prohibited Transaction Class
Exemption 84-14 issued by the United States Department of Labor.
"Repurchase Agreement" means any written agreement
(a) that provides for (i) the transfer of one or
more United States Governmental Securities in an aggregate
principal amount at least equal to the amount of the Transfer Price
(defined below) to the Company or any of its
Subsidiaries from an Acceptable Bank or an Acceptable Broker-
Dealer against a transfer of funds (the "Transfer Price") by the
Company or such Subsidiary to such Acceptable Bank or Acceptable
Broker-Dealer, and (ii) a simultaneous agreement by the Company or
such Subsidiary, in connection with such
transfer of funds, to transfer to such Acceptable Bank or
Acceptable Broker-Dealer the same or substantially similar
United States Governmental Securities for a price not less
than the Transfer Price plus a reasonable return thereon at a date
certain not later than 365 days after such transfer of funds,
(b) in respect of which the Company or such
Subsidiary shall have the right, whether by contract or
pursuant to applicable law, to liquidate such agreement upon the
occurrence of any default thereunder, and
(c) in connection with which the Company or such
Subsidiary, or an agent thereof, shall have taken all action
required by applicable law or regulations to perfect a Lien in such
United States Governmental Securities.
"Required Holders" means, at any time, the holder or
holders of more than 50% in principal amount of the Notes at the time
outstanding (exclusive of Notes then owned by the Company or any of its
Affiliates).
"Responsible Officer" means, with respect to the Company and
each Subsidiary (respectively), Senior Financial Officer, chief
executive officer, President and any other officer of the Company with
responsibility for the administration of, or matters referred to in, the
relevant portion of this Agreement.
"Restricted Investments" means all Investments except the
following:
(a) property to be used in the ordinary course of
business of the Company and its Subsidiaries;
(b) current assets arising from the sale of goods
and services in the ordinary course of business of the Company and
its Subsidiaries;
(c) Investments in one or more Wholly-Owned
Subsidiaries or any Person that concurrently with such
investment becomes a Wholly-Owned Subsidiary;
(d) Investments existing on the date of the Closing
and disclosed in Schedule 10.6;
(e) Investments in United States Governmental
Securities, provided that such obligations mature within 365 days
from the date of acquisition thereof;
(f) Investments in certificates of deposit or
banker's acceptances issued by an Acceptable Bank, provided that
such obligations mature within 365 days from the date of
acquisition thereof;
(g) Investments in commercial paper given the
highest rating by a credit rating agency of recognized
national standing and maturing not more than 270 days from the date
of creation thereof,
(h) Investments in Repurchase Agreements; and
(i) Investments in tax-exempt obligations of any
state of the United States of America, or any municipality of any
such state, in each case rated "AA" or better by S&P, "Aa2" or
better by Moody's or an equivalent rating by any
other credit rating agency of recognized national standing,
provided that such obligations mature within 365 days from the date
of acquisition thereof.
As of any date of determination, each Restricted Investment shall be
valued at the greater of:
(x) the amount at which such Restricted Investment
is shown on the books of the Company or any of its
Subsidiaries (or zero if such Restricted Investment is not
shown on any such books); and
(y) either
(i) in the case of any Guaranty of the
obligation of any Person, the amount which the Company or any
of its Subsidiaries has paid on account of such obligation
less any recoupment by the Company or such
Subsidiary of any such payments, or
(ii) in the case of any other Restricted
Investment, the excess of (x) the greater of (A) the amount
originally entered on the books of the Company or any of its
Subsidiaries with respect thereto and (B) the cost thereof to
the Company or its Subsidiary over (y) any return of capital
(after income taxes applicable
thereto) upon such Restricted Investment through the sale or
other liquidation thereof or part thereof or
otherwise.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc.
"Sale-and-Leaseback Transaction" means a transaction or series
of transactions pursuant to which the Company or any
Subsidiary shall sell or transfer to any Person (other than the
Company or a Subsidiary) any property, whether now owned or
hereafter acquired, and, as part of the same transaction or series of
transactions, the Company or any Subsidiary shall rent or lease as
lessee (other than pursuant to a Capital Lease), or similarly acquire
the right to possession or use of, such property or one or more
properties which it intends to use for the same purpose or
purposes as such property.
"Security" has the meaning set forth in Section 2(1) of the
Securities Act of 1933, as amended.
"Securities Act" means the Securities Act of 1933, as
amended from time to time.
"Senior Financial Officer" means, with respect to the
Company and each Subsidiary (respectively), its chief financial
officer, principal accounting officer, treasurer or comptroller.
"Senior Private Placement Debt" is defined in Section
5.19.
"Subordinated Debt" means the principal of and all
interest and premium (if any) on all liabilities of the Company
arising under the Subordinated Debt Agreement and all promissory notes
issued pursuant thereto, whether such liabilities are direct or
contingent, joint, several or independent, now or hereafter
existing, due or to become due and whether created directly or
acquired by assignment or otherwise.
"Subordinated Debt Agreement" means those certain Note
Purchase Agreements, dated as of December 1, 1989, between the
Company and CIGNA Mezzanine Partners II, L.P., Connecticut General Life
Insurance Company, Life Insurance Company of North America, The Paul
Revere Life Insurance Company, The Paul Revere Protective Life Insurance
Company and Rhode Island Hospital Trust National Bank and Balboa
Insurance Company, respectively, as amended, restated, extended,
renewed, supplemented or otherwise modified from time to time.
"Subordinated Debt Guaranty" means, collectively, each of (a)
that certain Subordinated Guaranty Agreement, dated as of
January 2, 1990, made by certain Subsidiaries of the Company (of which
Excel Corporation is, as of the date hereof, the only such existing
Subsidiary) in favor of the Subordinated Debt Holders and (b) that
certain Subordinated Guaranty Agreement, dated as of April 29, 1996
hereof, made by certain other Subsidiaries of the Company in favor of
the Subordinated Debt Holders.
"Subordinated Debt Holders" means the holder or holders of the
Subordinated Debt.
"Subsidiary" means, as to any Person, any corporation,
association or other business entity in which such Person or one or more
of its Subsidiaries or such Person and one or more of its
Subsidiaries owns sufficient equity or voting interests to enable it or
them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons
performing similar functions) of such entity, and any partnership or
joint venture if more than a 50% interest in the profits or
capital thereof is owned by such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries
(unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or
more of its Subsidiaries). Unless the context otherwise clearly
requires, any reference to a "Subsidiary" is a reference to a
Subsidiary of the Company.
"Subsidiary Stock" means, with respect to any Person, the
stock (or any options or warrants to purchase stock or other
Securities exchangeable for or convertible into stock) of any
Subsidiary of such Person.
"Transfer" means, with respect to any Person, any
transaction in which such Person sells, conveys, transfers or
leases (as lessor) any of its property, including, without
limitation, Subsidiary Stock.
"United States Governmental Security" means any direct
obligation of, or obligation guaranteed by, the United States of
America, or any agency controlled or supervised by or acting as an
instrumentality of the United States of America pursuant to
authority granted by the Congress of the United States of America, so
long as such obligation or guarantee shall have the benefit of the full
faith and credit of the United States of America which
shall have been pledged pursuant to authority granted by the
Congress of the United States of America.
"Voting Stock" shall mean capital stock of any class or
classes of a corporation having power under ordinary circumstances to
vote for the election of members by the board of directors of such
corporations, or persons performing similar functions
(irrespective of whether or not at the time stock of any of the
class or classes shall have or might have special voting power or rights
by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means, at any time, any
Subsidiary, other than a Foreign Subsidiary, one hundred percent (100%)
of all of the equity interests (except directors' qualifying shares) and
voting interests of which are owned by any one or more of the Company
and the Company's other Wholly-Owned Subsidiaries at such time.
<PAGE>
SCHEDULE 8.1
REQUIRED PREPAYMENTS
Date of Prepayment Amount of Prepayment
April 30, 2000 $3,947,368.42
April 30, 2001 $5,000,000.00
April 30, 2002 $5,000,000.00
April 30, 2003 $5,210,526.32
April 30, 2004 $8,000,000.00
April 30, 2005 $8,000,000.00
April 30, 2006 $8,000,000.00
April 30, 2007 $8,000,000.00
April 30, 2008 $12,000,000.00
April 30, 2009 $12,210,526.32
April 30, 2010 $12,210,526.32
The remaining outstanding principal balance of all Notes shall
be due and payable at maturity thereof.
Coopers
&Lybrand Coopers & Lybrand L.L.P.
a professional services firm
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration
Statements of Excel Industries, Inc. on Form S-8 (File No. 2-91986)
effective July 19, 1984, Form S-8 (File No. 33-14508) effective
June 11,
1987 and Form S-8 (File No. 33-53543) effective May 9, 1994 of our
report dated March 18, 1996 (except for Notes D and K, for which the
date is April 3, 1996), on our audits of the consolidated financial
statements of Atwood Industries, Inc. as of December 30, 1995 and
December 31, 1994, and for the three years ended December 30, 1995,
December 31, 1994 and January 1, 1994, which report is included in this
Form 8-K/A.
Coopers & Lybrand L.L.P.
Rockford, Illinois
May 13, 1996
