UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
March 1, 1999
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Date of Report (Date of earliest event reported)
C&D TECHNOLOGIES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 1-9389 13-3314599
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(State or other jurisdiction of Commission (I.R.S. Employer Identification
incorporation or organization) File Number)
Number
1400 Union Meeting Road, Blue Bell, Pennylvania 19422
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(Address of Principal Executive Offices) (Zip Code)
(215) 619-2700
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(Registrant's telephone number, including area code)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to a Purchase Agreement (the "Purchase Agreement"), dated as of
November 23, 1998, among Johnson Controls, Inc., a Wisconsin corporation, and
its subsidiaries, as seller (collectively, the "Seller"), and the Registrant, as
purchaser on March 1, 1999 the Registrant acquired from Seller (i) substantially
all of the assets of the Specialty Battery Division of Seller, including,
without limitation, certain assets of Johnson Technology, a wholly owned
subsidiary of Seller, and (ii) 100% of the ordinary shares of Johnson Controls
Battery (U.K.) Limited, a U.K. company and a wholly owned subsidiary of Johnson
Controls (U.K.) Limited, a U.K. company which is a wholly owned subsidiary of
Seller. The aggregate consideration paid by Purchaser was approximately $120
million, subject to certain adjustments set forth in the Purchase Agreement. In
addition, the Registrant assumed certain liabilities of Seller. The purchase
price was determined by (i) the value of the assets acquired, (ii) the value of
the liabilities that were assumed and (iii) negotiation with Seller. The
acquisition of an interest of the Specialty Battery Division in a joint venture
in Shanghai, China, for approximately $15 million pursuant to the Purchase
Agreement is expected to be consummated in the near future, subject to certain
third party consents.
The Specialty Battery Division was engaged in the business of designing,
manufacturing, marketing and distributing industrial batteries and the Purchaser
intends to continue using the assets acquired in such business. The source of
funds for the acquisition was advances under a new credit agreement more fully
described in Item 5 of this Current Report on Form 8-K.
Item 5. OTHER EVENTS.
Pursuant to a credit agreement entered into among Registrant, as borrower,
certain subsidiaries and affiliates of Registrant, as guarantors, the lenders
named therein, and Nationsbank, N.A. as administrative agent, dated as of March
1, 1999 (the "Credit Agreement"), the lenders shall provide a $220 million
credit facility to the Registrant, consisting of a term loan in the amount of
$100 million and revolving loans not exceeding $120 million which will include
letters of credit not exceeding $30 million and swingline loans not exceeding
$10 million. The funds borrowed by the Registrant under the Credit Agreement
shall be used to finance the purchase price under the Purchase Agreement,
refinance existing debt, and finance working capital and certain other
expenditures. The Registrant pledged 100% of the outstanding ownership interests
of its domestic subsidiaries, and 65% of the ownership interests of its foreign
subsidiaries, to secure its obligations under the Credit Agreement. The other
terms and conditions of the credit facility, including, without limitation,
interest rates and repayment terms, are set forth in the Credit Agreement, which
is attached as an exhibit hereto.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements. It is impracticable to provide any of the
required financial statements of the business acquired at the time of filing.
All of the required financial statements will be filed as an amendment to this
Form 8-K as soon as practicable, but not later than 60 days after the required
filing date of this Form 8-K.
(b) Pro Forma Financial Information. The required pro forma financial
information will be filed as an amendment to this Form 8-K at the time the
required financial statements are filed.
(c) Exhibits.
Exhibit 2.1 Purchase Agreement, dated as of November 23, 1998, among
Johnson Controls, Inc. and its subsidiaries, as seller,
and the Registrant, as purchaser.
Exhibit 2.2 Credit Agreement, dated as of March 1, 1999, among
Registrant, as borrower, certain subsidiaries and
affiliates of Registrant, as guarantors, the lenders named
therein, and Nationsbank, N.A. as administrative agent.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
C&D TECHNOLOGIES, INC.
Date: 3/12/99
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By: /s/ Alfred Weber
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Alfred Weber, Chairman and
Chief Executive Officer
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DEFINITIONS
The following terms which appear in this Agreement are defined in the
following Sections:
Term Section or Other Location
Active Employees . . . . . . . . . . . . . . . . . . .. . . . . . . .12.2
Affiliate. . . . . . . . . . . . . . . . . . . . . . .. . . . . . .1.1(b)
Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . .Preamble
Assigned Contracts . . . . . . . . . . . . . . . . . . . . . .1.1(a)(vii)
Assumed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . .2.1
Audit Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.1
Benefit Plans. . . . . . . . . . . . . . . . . . . . . . . . . . .8.10(a)
Business . . . . . . . . . . . . . . . . . . . . . .. . . . . . .Preamble
Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1(b)
Closing. . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .5.1(a)
Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1(a)
Closing Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . .3.2
Closing Statement of Net Assets. . . . . . . . . . . . . . . . . . . .4.1
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.10(a)
Competing Business . . . . . . . . . . . . . . . . . . . . . . . .15.5(b)
Confidentiality Agreement. . . . . . . . . . . . . . . . . . . . .15.4(a)
Conveyance Instruments . . . . . . . . . . . . . . . . . . . . . . 5.1(d)
Disputable Items . . . . . . . . . . . . . . . . . . . . . . . . . . .4.2
Employees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12.1
Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1(b)
Enviromental Assessments . . . . . . . . . . . . . . . . . . . . . 7.1(a)
Environmental Expenses . . . . . . . . . . . . . . . . . . . . . . 7.1(a)
Envirommental Liabilities. . . . . . . . . . . . . . . . . . . . .8.13(b)
Environmental Requirements . . . . . . . . . . . . . . . . . . . .8.13(b)
Environmental Work . . . . . . . . . . . . . . . . . . . . . . . . 7.1(a)
ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.10(a)
ERISA Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . .8.10(a)
Excluded Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . .1.2
Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . .8.4
Firm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.2
Foreign Plans. . . . . . . . . . . . . . . . . . . . . . . . . . .8.10(f)
Foreign Participants . . . . . . . . . . . . . . . . . . . . . . .8.10(f)
Hazardous Substances . . . . . . . . . . . . . . . . . . . . . . .8.13(b)
HSR Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5.1(b)
Indemnification Deductible . . . . . . . . . . . . . . . . . . . .16.2(c)
Indemnitee . . . . . . . . . . . . . . . . . . . . . . . . . . . .16.4(a)
Indemnitor . . . . . . . . . . . . . . . . . . . . . . . . . . . .16.4(a)
Interim Period . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9
Leased Real Property . . . . . . . . . . . . . . . . . . . . . 1.1(a)(ii)
Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . .1.1(a)(ii)
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Term Section or Other Location
Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16.2(a)
Material Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . .8.2
Notice of Breach . . . . . . . . . . . . . . . . . . . . . . . . . 7.1(b)
Notice of Claim. . . . . . . . . . . . . . . . . . . . . . . . . .16.4(a)
Owned Real Property. . . . . . . . . . . . . . . . . . . . . . .1.1(a)(i)
Parent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Participant. . . . . . . . . . . . . . . . . . . . . . . . . . . .12.6(b)
Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.9(b)
Permitted Liens. . . . . . . . . . . . . . . . . . . . . . . . .5.1(d)(i)
Permitted Owned Real Property Exceptions . . . . . . . . . . . . .8.5(a)
Prime Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.4
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(f)
Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.1
Purchased Assets . . . . . . . . . . . . . . . . . . . . . . . . . 1.1(b)
Purchased Inventories. . . . . . . . . . . . . . . . . . . . . 1.1(a)(iv)
Purchased Receivables. . . . . . . . . . . . . . . . . . . . . 1.1(a)(v)
Purchased Rights . . . . . . . . . . . . . . . . . . . . . . . 1.1(a)(ix)
Purchased Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . .8.2
Purchaser. . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Purchaser Information. . . . . . . . . . . . . . . . . . . . . . .15.4(c)
Purchaser 401(k) Plan. . . . . . . . . . . . . . . . . . . . . . .12.6(b)
Real Property. . . . . . . . . . . . . . . . . . . . . . . . . 1.1(a)(ii)
Reference Statement of Net Assets. . . . . . . . . . . . . . . . . . .8.4
Related Documents. . . . . . . . . . . . . . . . . . . . . . . . . . .8.1
Representatives. . . . . . . . . . . . . . . . . . . . . . . . . 17.11(a)
Retained Employees . . . . . . . . . . . . . . . . . . . . . . . . . 12.2
Retained Liabilities . . . . . . . . . . . . . . . . . . . . . . . . .2.2
Returns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.15(a)
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Seller Information . . . . . . . . . . . . . . . . . . . . . . . .15.4(b)
SJBC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Preamble
Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8.15(c)
Transferred Employees. . . . . . . . . . . . . . . . . . . . . . . . 12.2
U.S. Hourly Pension Plan . . . . . . . . . . . . . . . . . . . . . . 12.5
U.S. Salaried Pension Plan . . . . . . . . . . . . . . . . . . . . . 12.5
Walkaway Amount. . . . . . . . . . . . . . . . . . . . . . . . . . . 10.2
Warranty Claims. . . . . . . . . . . . . . . . . . . . . . . . . . . 15.8
Welfare Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . 12.9
<PAGE>
PURCHASE AND SALE AGREEMENT
PURCHASE AND SALE AGREEMENT, dated as of November 23, 1998
("Agreement"), by and between JOHNSON CONTROLS, INC., a Wisconsin corporation,
having a principal place of business at 5757 North Green Bay Avenue, Milwaukee,
WI 53209, together with certain of its subsidiaries, as set forth on Schedule
1.1, being hereinafter collectively referred to as "Seller"), and C&D
TECHNOLOGIES, INC., a Delaware corporation, having a principal place of business
at 1400 Union Meeting Road, Blue Bell, Pennsylvania 19422 ("Parent"), and C&D
ACQUISITION CORP., a Delaware corporation, having a principal place of business
at 1400 Union Meeting Road, Blue Bell, Pennsylvania 19422 ("Purchaser").
WHEREAS, Seller is engaged in the line of business (the "Business")
comprised of the manufacture and sale of industrial batteries including the
Specialty Battery Division ("SBD") of Seller, the shares of Johnson Controls
Battery (UK) Limited and sixty-seven percent (67%) of the shares of Shanghai
Johnson Battery Company, Ltd. ("SJBC"); and
WHEREAS, Seller desires to sell or to cause to be sold to Purchaser and
Purchaser desires to purchase from Seller, subject to the assumption by
Purchaser of certain liabilities of Seller relating to the Business, on the
terms and conditions hereinafter set forth, substantially all of the assets and
properties primarily used in the Business as a going concern.
In consideration of the premises and of the mutual agreements
hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
Purchase and Sale
1.1 PURCHASED ASSETS:
(a) On the terms and subject to the conditions set forth in this
Agreement, Seller, together with certain wholly-owned subsidiaries (as
disclosed on Schedule 1.1), hereby agrees to sell, transfer, convey,
assign and deliver to Purchaser, or cause to be sold, transferred,
conveyed, assigned and delivered to Purchaser, and Purchaser agrees to
purchase from Seller together with certain wholly-owned subsidiaries,
free and clear (except as described in Section 8.5(a) below) of all
Encumbrances, as hereinafter defined, all right, title and interest in,
to, and under the assets and properties of every nature, kind and
description, whether real, personal or mixed, tangible or intangible,
used in, held for use primarily in, or pertaining primarily to, the
Business, as hereinafter defined (other than Excluded Assets, as
hereinafter defined), wherever located, as the same shall exist
immediately prior to the Closing, as hereinafter defined, including,
without limitation, the following assets of the Business:
(i) the real property listed on Schedule 8.5(a), together with
all appurtenances thereto and all buildings and other
structures, fixtures and improvements located thereon
(collectively, the "Owned Real Property");
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(ii) subject to Section 5.1(e) below, the real property leases
listed on Schedule 8.5(b) (collectively, the "Leases"),
together with all of Seller's interest in all of the
structures, fixtures and improvements located on the real
property covered by such Leases (collectively, the "Leased
Real Property"; and, together with the Owned Real Property,
the "Real Property");
(iii) all machinery and equipment, including, without
limitation, all manufacturing, production, maintenance,
packaging, testing and other machinery, tooling (including
dies and molds) and equipment, vehicles, spare or replacement
parts, computer equipment, furniture, fixtures, plant and
office equipment, supplies and other tangible personal
property, as well as laboratory equipment located at the
Battery Technology Center and used in the Business as
described in Schedule 1.1(a)(iii), and including, without
limitation, all tangible personal property of Seller or its
Affiliates located on the Real Property on the date hereof;
(iv) all inventories, including, without limitation, raw
materials, work-in-process, finished goods, component parts,
returned goods, stores and supplies, packaging, shipping
containers and other materials (collectively, the "Purchased
Inventories");
(v) all accounts and notes receivable (collectively, the
"Purchased Receivables");
(vi) all prepaid expenses relating to the Assumed Liabilities,
as hereinafter defined, including prepaid Taxes as hereinafter
defined, advances, credits and security, utility and other
deposits but excluding prepaid insurance and any prepaid item
the substantial benefit of which will not be usable by the
Purchaser after the Closing;
(vii) subject to Section 5.1(e) below, all rights in and under
all contracts, arrangements, licenses, personal property
leases, commitments, purchase orders, sales orders and other
agreements, including, without limitation, any right to
receive payment for products sold or services rendered, and to
receive goods and services, pursuant to such agreements, and
to assert claims and take other rightful actions in respect of
breaches, defaults and other violations thereof (collectively,
the "Assigned Contracts");
(viii) all operating records, data and other materials
maintained by or on behalf of, or otherwise relating to, the
Business, including, without limitation, all books, records,
sales and sales promotional data, advertising materials,
customer lists and records, credit information, cost and
pricing information, supplier lists and records, business
plans, catalogs, mailing lists, distribution lists,
photographs, production data, engineering records, personnel
and payroll records, manufacturing and quality control records
and procedures, research and development files, intellectual
property disclosures, accounting records, and other materials
related to any of the foregoing items;
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(ix) subject to Section 1.2(c), 1.2(f) and 8.11, all patents,
trademarks, tradenames, service marks, copyrights, know-how
and trade secrets owned or used by Seller in the Business as
provided in Schedule 8.11 (collectively, the "Purchased
Rights") including, without limitation, the name Dynasty, and
all other names owned by Seller and primarily used in, held
for use in, or otherwise relating to the Business;
(x) subject to Section 1.2(b) below, all Permits, as
hereinafter defined, to the extent they are assignable or
transferable;
(xi) all rights, recoveries, refunds, counterclaims, rights of
set-off and other Claims, as hereinafter defined (known or
unknown, accrued or contingent), against third parties,
including, without limitation, warranty and other contractual
claims, other than any of the foregoing which relate solely to
the Excluded Assets or Retained Liabilities, as hereinafter
defined;
(xii) all warranties, guarantees and letters of credit
received from vendors, suppliers or manufacturers;
(xiii) all of the capital stock and other ownership interests
in the Purchased Subsidiaries, as set out in Schedule 1.1; and
(xiv) all goodwill of the Business.
(b) The assets, properties, interests in properties and rights that are
to be sold, transferred, conveyed and assigned to Purchaser by Seller
hereunder shall be collectively referred to as the "Purchased Assets".
As used in this Agreement, the term "Encumbrances" means, collectively,
all security interests, judgments, liens (other than for taxes not yet
payable), pledges, escrows, claims, options, rights of first refusal,
mortgages and encumbrances; the term "Claim" means any claim, demand,
action, suit or proceeding; and the term "Affiliate" means any other
person or entity that, directly or indirectly, is controlled by or is
under common control with such person.
1.2 EXCLUDED ASSETS: There are excepted from the Purchased Assets and
the term "Purchased Assets" does not mean or include the following assets
(collectively, the "Excluded Assets"):
(a) all cash and cash equivalent items on hand or on deposit and bank
accounts as of the Closing Date of this Agreement;
(b) all Permits to the extent they are not assignable or transferable;
(c) the assets listed in Schedule 1.2(c);
(d) rights to or claims for refunds, overpayments or rebates of Taxes
and other governmental charges for periods ending on or prior to the
Closing Date or for any pro
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rata portion of a period which straddles the Closing Date and the
benefit of net operating loss or capital loss carryforwards, carrybacks
or other tax credits (of whatever nature) of Seller;
(e) all insurance policies;
(f) the right to use the names "Johnson Controls", "Globe Union" and
"Hoover" and their registered and unregistered trademarks and logos;
PROVIDED, that Purchaser and the Purchased Subsidiaries shall have the
right to sell inventory included in the Purchased Assets containing
such names, marks or logos in the ordinary course and to use existing
marketing and sales material with appropriate stickering and shall, for
six months after the closing, have the right to use the "Johnson
Controls" mark on existing poly molds; and
(g) all assets and properties of Seller and the Purchased Subsidiaries
not used primarily in, held for use primarily in, or pertaining
primarily to, the Business.
1.3 PARENT TO CAUSE PURCHASER TO PERFORM OBLIGATIONS. Parent shall
cause Purchaser to perform each of Purchaser's obligations hereunder.
ARTICLE II
Liabilities
2.1 ASSUMPTION OF LIABILITIES: Subject to the terms and conditions of
this Agreement, on the Closing Date, as hereinafter defined, Seller shall assign
to Purchaser, and Purchaser shall, except as set forth in Section 2.2 below,
assume and agree to perform and discharge the following liabilities and
obligations of Seller:
(a) obligations for the sale and delivery of products not shipped prior
to the close of business on the Closing Date under open sales orders,
open bids and sales contracts included in the Assigned Contracts, which
were accepted or made in the ordinary course of business of the
Business prior to the close of business on the Closing Date and which
were not paid for prior to the Closing Date;
(b) obligations for the purchase of raw materials, supplies and repair
and maintenance materials not received prior to the close of business
on the Closing Date and not included in the Purchased Inventory under
open supply contracts, purchase orders and commitments included in the
Assigned Contracts, which were given or made in the ordinary course of
business of the Business;
(c) liabilities and obligations arising under the Assigned Contracts in
accordance with their respective terms except with respect to any
breaches thereof by the Business occurring prior to the Closing Date,
including, without limitation, payables owed by the Business to Seller
or any of its Affiliates on the Closing Date for goods sold and
delivered in the ordinary course;
(d) (i) an amount limited to one-half of the Environmental Expenses (as
hereinafter defined), but not exceeding $1,750,000; (ii) any
Environmental Liability (as
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hereinafter defined) based upon a claim made after the fifth
anniversary of the Closing Date resulting solely from environmental
conditions existing at locations other than the Real Property to the
extent those conditions resulted from migration from a condition that
existed on or prior to the Closing Date in, on, under or at the Owned
Real Property, but specifically excluding these offsite matters
referred to in clause (ii) of the definition of Environmental
Liabilities; and (iii) liability for environmental conditions at the
Owned Real Property, which conditions are not remediated by or as a
result of the Environmental Work.
(e) liabilities arising from obligations to Transferred Employees of
the Business relating to periods after the Closing to the extent set
forth in Article XII of this Agreement and liabilities for accrued
vacation and other accruals set forth in Schedule 8.4 to the extent set
forth in Article XII of this Agreement;
(f) liability for suits, claims, proceedings and actions made or
commenced after the Closing Date resulting from actual or alleged harm,
injury or damage to persons, property or business by products sold or
shipped by the Business ("Products") which are sold and shipped after
the Closing Date regardless of when such Products were manufactured, or
when the incident or accident giving rise to such liability occurs;
(g) liability for express or implied warranties of the Business,
including obligations to repair, replace, rework or to make refunds of
amounts paid for Products regardless of when such Products were
manufactured, sold or distributed or when defects became or become
apparent, to the extent provided in Section 15.8;
(h) liability for the recall, notification, retrofit or other
post-manufacture remedial or corrective actions relating to Products,
regardless of when such Products were manufactured, sold or shipped, to
the extent provided in Section 15.8;
(i) liability for all other claims, actions, suits, proceedings or
investigations arising solely out of events occurring after the Closing
Date involving the operations of the Business;
(j) third party bank debt of SJBC and intercompany payables of SJBC,
both as set out in Schedule 8.4 as adjusted at Closing.
The foregoing liabilities and obligations of Seller being assumed by
Purchaser hereunder shall be collectively referred to as the "Assumed
Liabilities".
2.2 RETAINED LIABILITIES: Seller shall retain, and shall remain
exclusively responsible for paying, performing and discharging when due, and
Purchaser shall not assume or have any responsibility for:
(a) all liabilities and obligations relating to or arising out of the
Excluded Assets;
(b) all liabilities and obligations for Taxes based on the income of
Seller
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arising out of or relating to the operation of the Business on or prior
to the close of business on the Closing Date;
(c) liability for suits, claims, proceedings and actions made or
commenced before or after the Closing Date resulting from actual or
alleged harm, injury or damage to persons, property or business by
products sold or shipped by the Business on or prior to the Closing
Date, regardless of whether those products were manufactured by the
Business or when the incident or accident giving rise to such liability
occurred or occurs;
(d) all liabilities for Environmental Expenses and Environmental
Liabilities not assumed by Purchaser pursuant to Section 2.1(d);
(e) all liabilities and obligations relating to or arising out of the
Benefits Plans or any employee benefit plan, arrangement or policy
established, maintained, sponsored or contributed to by Seller or any
ERISA Affiliates that does not cover or relate to employees of the
Business and all liabilities and obligations relating to the Retained
Employees;
(f) all liabilities and obligations relating to disputes with Mack
Molding Company;
(g) all liabilities for other claims, actions, suits, proceedings or
investigations arising out of events occurring solely on or prior to
the Closing Date involving the operations of the Business.
The liabilities and obligations of Seller which do not constitute
Assumed Liabilities and will be retained by Seller hereunder shall be
collectively referred to as the "Retained Liabilities".
ARTICLE III
Purchase Price
3.1 PURCHASE PRICE: The purchase price payable by Purchaser to Seller
for the Purchased Assets (the "Purchase Price") shall be $135 million plus the
Assumed Liabilities, subject to adjustment as provided in Article IV of this
Agreement.
3.2 PAYMENT AT CLOSING: At the Closing, Purchaser shall transfer to a
bank account designated by Seller the amount called for by this Agreement to be
paid on the Closing Date (the "Closing Payment") by a wire transfer of
immediately available funds.
ARTICLE IV
Determination and Allocation of Adjusted
Purchase Price
4.1 CLOSING STATEMENT OF NET ASSETS: Within (60) calendar days after
the Closing Date, Seller shall prepare, and shall deliver to Purchaser an
unaudited balance sheet (the "Closing Statement of Net Assets") of the Business
as at the close of business on the fiscal
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month end immediately preceding the Closing Date. The Closing Statement of Net
Assets shall be prepared on a basis consistent with the Reference Statement of
Net Assets (as hereinafter defined), using the Seller's Accounting Principles
(as hereinafter defined) consistently applied and all books, records and
accounts of the Business, shall reflect all reserves, accruals and entries
necessary to reserve fully for all liabilities of the Business and shall fairly
present the financial position of the Business as of the Closing Date in all
material respects. Seller shall certify the Closing Statement of Net Assets as
having been prepared in accordance with this Agreement and as presenting
accurately the consolidated assets and liabilities of the Business as of the
Closing Date. Notwithstanding anything contained herein to the contrary, (i) the
Closing Statement of Net Assets shall include all accruals, reserves and other
adjustments generally made at year end on the same basis as generally made at
year end for items individually in excess of $5,000; and (ii) except to the
extent paid at or prior to the Closing, the full amount of any compensation or
benefits due to employees of the Business (including, without limitation,
salary, incentive compensation, bonuses, deferred compensation, vacation, sick
leave, insurance and benefit plan contributions) with regard to services
rendered through the Closing Date, regardless of when payable, shall be accrued
on the Closing Statement of Net Assets. As of the Closing Date, Seller shall
take a complete physical inventory of the inventory owned by the Business.
Purchaser (or its representatives) shall have the right to observe such physical
inventory and to review the results, work papers and procedures used in
conducting such physical inventory.
4.2 REVIEW OF CLOSING STATEMENT OF NET ASSETS: Purchaser shall have the
right to review the Closing Statement of Net Assets and all work papers relating
thereto and to notify Seller of its dispute of such Closing Statement, provided
that the scope of such dispute shall be limited to whether (i) there exists any
mathematical errors in the Closing Statement of Net Assets; and/or (ii) whether
the Closing Statement of Net Assets was prepared in accordance with Seller's
Accounting Principles (collectively "Disputable Items"). If Purchaser does not
notify Seller of any such dispute within thirty (30) days after the date the
Closing Statement of Net Assets is delivered to Purchaser, then the Closing
Statement of Net Assets delivered by Seller shall be deemed to be final,
conclusive and binding on the parties. If, however, Purchaser notifies Seller in
writing within such period of a Disputable Item and specifies (a) the Disputable
Item and Purchaser's basis for such a position, and (b) the amount of the
adjustment Purchaser proposes with respect to each Disputable Item, the parties
will then attempt to resolve their differences with respect thereto. If the
parties are unable to resolve their dispute, the unresolved Disputable Items
shall be referred, within sixty (60) days after the date the Closing Statement
of Net Assets is delivered to Purchaser, to the Chicago office of Deloitte &
Touche, LLP, certified public accountants, or if such firm is unable to or
unwilling to serve, to another "Big Five" accounting firm selected by the firm
declining to serve; provided such selected firm is not the regular independent
auditor of Seller or Purchaser (the "Firm"). The Firm shall be asked to
determine only whether the Closing Statement of Net Assets met the standards set
forth above in subsections (i) and (ii) and report to Seller and Purchaser upon
all Disputable Items within thirty (30) days after such referral. The decision
of the Firm shall be final, conclusive and binding on the parties hereto. The
fees and expenses of the Firm shall be shared equally by Seller and Purchaser.
4.3 COOPERATION: Representatives of Seller shall be given access to
all books,
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records and other data of the Business for the purpose of preparing the Closing
Statement of Net Assets. Personnel of the Purchaser may be consulted from time
to time by such representatives.
4.4 SETTLEMENT OF ADJUSTED PURCHASE PRICE: Within 10 days after the
final determination of the Closing Statement of Net Assets, Seller shall pay to
Purchaser the amount by which the Net Asset Value (as hereinafter defined) as
set forth on the Reference Statement of Net Assets exceeds the Net Asset Value
as set forth on the Closing Statement of Net Assets, or Purchaser shall pay to
Seller the amount by which the Net Asset Value as set forth on the Closing
Statement of Net Assets exceeds the Net Asset Value, as set forth on the
Reference Statement of Net Assets, as the case may be. In the event Purchaser
disputes any part of the Closing Statement of Net Assets pursuant to the
provisions of Section 4.2 of this Agreement, those portions of the Closing
Statement of Net Assets which are not in dispute shall be deemed finally
determined, and the payer of any adjustment due in accordance with this Section
4.4 shall nevertheless pay to the payee, within 30 days after the date the
Closing Statement of Net Assets is delivered to Purchaser by Seller, all amounts
then due with respect to such portion of the Closing Statement of Net Assets
which has been deemed finally determined. The amount of the payments described
in this Section 4.4 shall be paid by Seller to Purchaser, or by Purchaser to
Seller, as the case may be, with interest thereon from the Closing Date to the
date of such payment, calculated at a floating rate equal to the "Prime Rate"
quoted by The Chase Manhattan Bank, N.A., New York, New York from time to time
after the Closing Date to the date of payment, in immediately available funds
remitted by wire transfer to a bank designated by the payee thereof.
The parties understand and agree that the adjusted purchase price
mechanism set forth in Sections 4.1 4.5 is not intended to apply to disputes or
questions regarding the Reference Statement of Net Assets or the preparation
thereof, which disputes or questions instead shall be evaluated and decided
under Article XVI as a breach of warranty.
4.5 NET ASSET VALUE. The term "Net Asset Value" with respect to the
Business shall mean the total assets of the Business minus the total
liabilities, in each case as reflected on the Reference Statement of Net Assets
or the Closing Statement of Net Assets, as the case may be, subject to Section
10.16.
4.6 ALLOCATION OF PURCHASE PRICE: Seller agrees, at its sole cost, to
have the Purchased Assets appraised by a firm with expertise in such matters
that is reasonably agreeable to Purchaser. Seller and Purchaser shall mutually
agree on the instructions to the appraisal firm, which shall be jointly retained
by Seller and Purchaser. Seller and Purchaser agree to be bound by the results
of such appraisal and shall allocate the Purchase Price among the Purchased
Assets (including the portion allocated to each Purchased Subsidiary) in
accordance with the relative fair market values of the Purchased Assets as
determined by the appraisal as the same may hereafter be amended to reflect any
changes necessary as a result of any adjustment of the Purchase Price pursuant
to this Article IV, subject to Section 10.16. Seller and Purchaser agree to use
the allocation provided for herein for all purposes in any Federal and state
income or franchise tax return filed by them subsequent to the Closing Date,
including the determination by Seller of taxable gain or loss on the sale of the
Purchased
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Assets and the determination by Purchaser of its tax basis with respect to the
Purchased Assets. Neither party will file any returns or reports in a manner
which is inconsistent with the appraisal or allocation.
ARTICLE V
Closing Matters
5.1 THE CLOSING:
(a) The purchase and sale (the "Closing") contemplated under this
Agreement shall take place at the offices of Seller, located at 5757
North Green Bay Avenue, Milwaukee, WI or at such other place as the
parties shall mutually agree upon, at 10:00 A.M. local time on February
1, 1999, or such other time or date as the parties shall mutually agree
upon, or such later date as may be required pursuant to paragraph (b)
of this Section 5.1. The date the Closing takes place is herein
referred to as the "Closing Date". The Closing shall be effective as of
12:01 a.m. on the Closing Date.
(b) If all applicable waiting periods under the Hart-Scott-Rodino
Antitrust Improvement Act of 1976, as amended (the "HSR Act") and all
equivalent filings relating to the sale and purchase of the Purchased
Subsidiaries, have not expired or been otherwise terminated, by the
date set forth in paragraph (a) of this Section 5.1, the Closing shall,
without the necessity of any action by or consent of any party hereto,
be postponed until five days after the date of expiration or
termination of the last such waiting periods.
(c) At the Closing, Purchaser shall transfer to a bank account
designated by Seller the Closing Payment in accordance with Section 3.2
above.
(d) At the Closing and effective on the Closing Date, Seller shall
execute and deliver (or cause to be executed and delivered) the
following documents to Purchaser (collectively, the "Conveyance
Instruments"):
(i) such deed or deeds as shall be effective to vest in
Purchaser good and marketable fee simple title to all of the
Owned Real Property, free and clear of all Encumbrances,
except for mechanics', carriers', workmen's, repairmen's or
other like liens arising or incurred in the ordinary course of
business regarding claims that are not yet due and payable,
liens for taxes, and other governmental charges which are not
due and payable or which may thereafter be paid without
penalty, (collectively, the "Permitted Liens") and any other
exceptions which may be listed on Schedule 8.5(a);
(ii) bills of sale, endorsements, assignments and other good
and sufficient instruments of sale, transfer, conveyance and
assignment, in form reasonably satisfactory to Purchaser, as
shall be effective to vest in Purchaser good and marketable
title, free and clear of all Encumbrances, to the Purchased
Assets other than the Owned Real Property; and
(iii) share certificates or other documents representing all
of Seller's
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ownership of the Purchased Subsidiaries properly endorsed for
transfer of Seller's record and beneficial ownership in and to
the Purchased Subsidiaries.
(e) This Agreement shall not constitute an agreement to assign any
contract, license, lease, commitment, sales order or purchase order or
other agreement if an assignment or attempted assignment of the same
without the consent of the other party thereto would constitute a
breach thereof or in any way impair the rights of Seller thereunder.
(f) At the Closing, Seller shall cause any directors or officers of the
Purchased Subsidiaries who are officers or employees of Seller (other
than full-time employees of the Business) to resign or to be removed as
directors and officers thereof.
ARTICLE VI
Transfer After the Closing
6.1 FURTHER INSTRUMENTS AND ACTIONS: From time to time after the
Closing Date, upon request of Purchaser, Seller, without further consideration,
shall cooperate with Purchaser and shall duly execute, acknowledge and deliver
all such further deeds, assignments, transfers, conveyances and powers of
attorney and take such other actions and give such assurances as may be
reasonably required to convey to and vest in Purchaser all right, title and
interest in all the assets, property and business of Seller intended to be
assigned, transferred and conveyed pursuant to and as provided in and subject to
the provisions of this Agreement. Seller shall promptly pay or deliver to
Purchaser any amounts or items which may be received by Seller after the Closing
which constitute Purchased Assets.
6.2 PURCHASED ASSETS REQUIRING CONSENTS: In the event any consent of a
third party legally required for the sale, assignment or transfer to Purchaser
of any Purchased Asset (with respect to which, in the case of consents referred
to in Section 10.4, Purchaser has waived the closing condition) has not been
obtained by the Closing Date then such Purchased Asset shall not be deemed to be
sold or transferred to Purchaser at the Closing, but:
(a) Seller shall cooperate with Purchaser in entering into any
reasonable arrangement designed to provide Purchaser with the benefit
of Seller's rights under or pursuant to such Purchased Asset;
(b) Seller shall cooperate with Purchaser in obtaining any such
required consent or waiver after the Closing; and
(c) upon obtaining all required consents or waivers for such Purchased
Asset, such Purchased Asset shall be deemed to be sold or transferred
to Purchaser as of the receipt of such consents or waivers and Seller
shall execute, without further consideration from Purchaser, any
documents reasonably requested by Purchaser to confirm that such
Purchased Asset has been assigned to Purchaser.
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ARTICLE VII
Actions Prior to Closing
7.1 ACCESS; NOTICE OF BREACH: (a) For a period ending January 31, 1999,
Seller shall provide Purchaser the opportunity to conduct a full due
diligence review of the Business. For such purposes, Purchaser and its
representatives shall have, at all reasonable times, access to the
Business, the Purchased Assets, and the management staff of the
Business as may be reasonably requested by Purchaser and shall be
permitted to contact customers of the Business, joint venture partners
of the Business and relevant governmental officials without restriction
but with prior notice to and coordination with Seller and shall receive
Seller's full and prompt cooperation regarding such endeavor. As part
of its diligence review, Purchaser shall have the right to retain an
environmental consultant reasonably acceptable to Seller to undertake
environmental assessments of the Real Property including, without
limitation, Phase I and Phase II environmental assessments on the Real
Property (the "Environmental Assessments"). The scope of the
Environmental Assessments shall be agreed upon by Seller and Purchaser
and may include, among other things, intrusive sampling and testing of
soils and groundwater, and integrity testing of underground storage
tanks. Seller shall provide complete and unfettered access to the
Business and the Real Property for as much time as is necessary for the
conduct of the Environmental Assessments. The Environmental Assessments
will be promptly provided to Seller and Purchaser upon their
completion. The Environmental Assessments will make specific
recommendations concerning certain additional investigation,
remediation and/or monitoring to be undertaken at or concerning the
Real Property and/or any adjacent property, the Purchased Assets or the
Business, and other recommendations may be made based upon discoveries
made during implementation of the initial recommendations (the
implementation of such recommendations being the "Environmental Work").
It is agreed that Seller shall conduct and control the Environmental
Work, including any negotiations or contacts with the government
officials. Based on the findings of the Environmental Assessments, or
discoveries made during conduct of the Environmental Work, Seller shall
promptly notify the appropriate governmental authorities as required
under Environmental Requirements (as hereinafter defined). Seller shall
promptly provide to Purchaser copies of all scopes of work, sampling
data, notices to or from government officials or a third party, test
results, evaluations, reports and correspondence concerning the
Environmental Work. The Environmental Work shall be deemed complete
when Seller receives "no further action" letters from relevant
government officials or agencies with respect to all the Environmental
Work. The costs and expenses of undertaking the Environmental
Assessments and the Environmental Work, including the fees and expenses
of attorneys and environmental consultants, are collectively referred
to herein as the "Environmental Expenses". The obligations of the
partners under this Agreement shall not be affected by any delay in
completing the Environmental Assessments or Environmental Work until
after the end of the due diligence period referred to herein or the
Closing.
(b) By the close of business on January 25, 1999, Purchaser shall
deliver to Seller a written list describing in reasonable detail all
material breaches of representations and warranties contained in
Article VII hereof which Purchaser has discovered or have been
disclosed since the date of this Agreement that are not reflected on
the Reference Statement of Net assets or disclosed on any Schedule
hereto, together with the amount, if any, reasonably
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calculated as a proposed adjustment to the Purchase Price (or to the
extent an amount cannot be reasonably calculated, then a reasonable
estimate of such amount) ("Notice of Breach"). Prior to Closing, Seller
and Purchaser shall meet and attempt to resolve whether and to what
extent such breaches will be reflected in a Purchase Price adjustment
to be recognized in the Closing Payment; provided, however, that any
such Purchase Price adjustment agreed to between the parties shall be
subject to the Indemnification Deductible (as defined below). If, prior
to Closing, Seller and Purchaser are unable to resolve the extent to
which such breaches will be reflected in a Purchase Price adjustment,
such Notice of Breach shall, after Closing, be deemed a Notice of Claim
pursuant to Section 16.4 hereof.
7.2 OBTAINING OF CONSENTS:
(a) As soon as possible after the date hereof, each party shall (i)
cooperate with the other to make all necessary filings, including
without limitation, filings under the HSR Act and equivalent foreign
laws and regulations, and (ii) use commercially reasonable efforts to
make all other necessary filings with all governmental bodies or other
regulatory authorities to obtain licenses, permits, approvals,
authorizations and consents of all third parties required for the sale,
assignment or transfer to Purchaser of any of the Purchased Assets or
the consummation of any of the transactions contemplated by this
Agreement.
(b) Seller shall bear the cost of complying with or obtaining the
consent to or approval of the transactions contemplated hereby of any
governmental or other third party, including without limitation, any
such approval or consent required by any safety, health, environmental
or other applicable law or regulation. Each party hereto shall provide
to the other party such information as the other party may reasonably
request in order to enable it to prepare such filings. Each party
hereto shall also use its respective commercially reasonable efforts to
expedite any governmental or other third party review and to obtain all
such necessary consents, approvals, licenses and permits as promptly as
practicable; provided, than neither Purchaser nor any of its affiliates
shall be required to dispose of any assets in connection with the
obtaining of any consent, approval, license or Permit.
7.3 ACTIONS OF SELLER AND CONDUCT OF BUSINESS:
(a) Seller shall use commercially reasonable efforts to perform and
satisfy all conditions to Closing to be performed or satisfied by
Seller under this Agreement by the Closing Date or such other date by
which performance is required hereunder.
(b) From the date hereof through the Closing Date, unless otherwise
agreed in writing by Purchaser, Seller shall not, except as required or
expressly permitted pursuant to the terms hereof, make any material
change in the conduct of the Business or the Purchased Assets or enter
into any material transaction other than in the ordinary course of
business and shall continue to conduct the Business and cause each of
the Purchased Subsidiaries to conduct their respective businesses in
the ordinary course of business. Prior to the Closing, Seller shall use
all reasonable efforts to preserve for Purchaser the goodwill of the
customers and suppliers of the Business and others having business
relations with Seller with respect to the Business, and shall do all
things reasonably requested by Purchaser for such
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purpose. Prior to the Closing, Seller shall promptly advise Purchaser
in writing of the commencement or threat against Purchaser of any suit,
litigation or legal proceeding against Seller or the Purchased
Subsidiaries or with regard to the transactions contemplated hereby.
Prior to the Closing, Seller shall cause all casualty and liability
insurance coverage currently in effect with respect to the Purchased
Assets or the Business to remain in effect and apply all insurance
proceeds in respect of casualty to the Purchased Assets to the
replacement or rebuilding of the Purchased Assets; provided, that the
foregoing shall not affect Purchaser's rights in the event the
representation contained in Section 8.12 is not correct as of the
Closing.
(c) Without limiting the generality of the foregoing, from the date
hereof through the Closing Date, unless otherwise agreed in writing by
Purchaser, Seller shall not with respect to the Business, and shall not
permit any Purchased Subsidiary to:
(i) sell, lease, license or otherwise dispose of, or agree to
sell, lease, license or otherwise dispose of, any interest in
any of the Purchased Assets of the Business that are material,
individually or in the aggregate, to the Business, taken as a
whole, except for sales of inventory in the ordinary course of
business consistent with past practice;
(ii) permit, allow or subject any of the Purchased Assets to
any material mortgage, pledge, security interest, encumbrance
or lien or suffer such to be imposed, except for Permitted
Liens;
(iii) except in the ordinary course of business, consistent
with past practice or as required by law or pursuant to the
terms of a collective bargaining agreement, increase in any
manner the compensation of, or enter into any new bonus or
incentive agreement or arrangement with, any of the Business'
employees or amend any Benefit Plan or Foreign Plan with
respect to any employees of the Business; or
(iv) enter into one or more new agreements or contracts which
require the delivery by it of performance bonds in amounts
exceeding, in aggregate, twenty-five thousand dollars
($25,000);
(v) enter into any agreements other than in the ordinary
course of business; or
(vi) make any capital expenditures exceeding, in the
aggregate, $250,000, except as set forth in Schedule
7.3(c)(vi);
7.4 ACTIONS OF PURCHASER: Purchaser shall use commercially reasonable
efforts to perform and satisfy all conditions to Closing to be performed or
satisfied by Purchaser under this Agreement by the Closing Date or such other
date by which performance is required hereunder.
7.5 PUBLIC ANNOUNCEMENTS: From and after the date hereof and through
the Closing Date, Seller and Purchaser shall consult with each other before
issuing any press releases or
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otherwise making any public statements with respect to this Agreement and the
transactions contemplated hereby.
7.6 NO NEGOTIATIONS. Prior to the Closing, Seller shall not, nor shall
it give its permission to or authorize any officer, director, employee or
representative to, solicit or enter into negotiations or discussions of any kind
with any party, other than Purchaser or Parent, for the purchase and sale of all
or any portion of the Business or any of the Purchased Assets except with regard
to the sale of finished goods inventory in the ordinary course of business.
ARTICLE VIII
Representations and Warranties of Seller
Seller represents and warrants to Purchaser as follows:
8.1 ORGANIZATION AND AUTHORITY: Seller is a corporation duly organized,
validly existing and in good standing under the laws of Wisconsin, and Seller
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted, to execute and
deliver this Agreement and all other agreements, instruments and documents to be
delivered by Seller hereunder (the "Related Documents") and to perform the
obligations to be performed by it hereunder and thereunder, and to consummate
the transactions contemplated hereby and thereby.
8.2 PURCHASED SUBSIDIARIES: Except for the corporations listed on
Schedule 1.1 (the "Purchased Subsidiaries"), the Business does not currently own
any capital stock or other proprietary interest, directly or indirectly, in any
corporation or other entity or interest in any joint venture, whether or not a
separate legal entity is formed thereby. Schedule 1.1 correctly sets forth the
corporate name and the jurisdiction of incorporation with respect to each
Purchased Subsidiary. Each Purchased Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation, has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted and
is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the properties owned or
leased by it or the nature of the business conducted by it makes such
qualification necessary except for any non-qualification which does not have a
material adverse effect on the business, operations, properties, prospects or
condition (financial or other) (a "Material Adverse Effect") of the Business.
The complete articles or certificate of incorporation and by-laws of each
Purchased Subsidiary, including in each case all amendments thereto, have been
provided to Purchaser. All the outstanding shares of the capital stock of each
class of each Purchased Subsidiary have been validly issued and are fully paid
and nonassessable and are owned, beneficially and of record, by Seller free and
clear of any Encumbrances. None of the Purchased Subsidiaries has issued any
securities, limited liability company interests or other ownership interests in
violation of any preemptive or similar rights and there are no outstanding (i)
securities or other ownership interests convertible into or exchangeable for any
shares of capital stock or other ownership interest of any of the Purchased
Subsidiaries; (ii) subscriptions, options, warrants, calls, commitments,
preemptive rights or other rights of any kind (absolute, contingent or
otherwise) entitling any third party to acquire or otherwise
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receive from any of the Purchased Subsidiaries any shares of capital stock or
other securities or ownership interests; or (iii) contracts, commitments,
agreements, understandings or arrangements of any kind relating to the issuance
of any capital stock or ownership interests of any of the Purchased
Subsidiaries, any such convertible or exchangeable securities, or any such
subscriptions, options, warrants or rights. There are no shares of stock or
other securities, limited liability company interests or other ownership
interests of the Purchased Subsidiaries reserved for issuance for any purpose.
All capital contributions required to be made to SJBC prior to the Closing have
been made, and there are no remaining obligations of the Business to make
capital contributions to SJBC.
8.3 CORPORATE ACTION: NO CONFLICT: The execution and delivery by Seller
of this Agreement and the Related Documents and Seller's performance of the
transactions contemplated hereby and thereby have been duly authorized by all
requisite corporate action of Seller. This Agreement has been duly and validly
executed and delivered by Seller and is, and each of the Related Documents when
executed and delivered by Seller in accordance with its terms will be, the valid
and binding obligation of Seller, enforceable against Seller in accordance with
their respective terms, except as limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors rights generally. Except as
set forth in Schedule 8.3, neither the execution, delivery or performance by
Seller of this Agreement or any of the Related Documents, nor the consummation
by Seller of the transactions contemplated hereby or thereby, nor compliance by
Seller with any provision hereof or thereof will (i) conflict with or result in
a breach of any provision of the charter or by-laws of Seller or any Purchased
Subsidiary or (ii) violate any provision of law, statute, rule or regulation, or
any order, writ, injunction, permit, judgment or decree of any court or other
governmental or regulatory authority or (iii) result in a breach of, or
constitute a default under (with or without notice, lapse of time or both) or
result in the invalidity of, or accelerate the performance required by or cause
or give rise to any right of acceleration or termination of any right or
obligation pursuant to, or require the consent of the other party to, any
Assigned Contract or any agreement set forth as an exhibit to Seller's Annual
Report on Form 10-K for Seller's last fiscal year or any Quarterly Reports on
Form 10-Q or Current Reports on Form 8-K filed with the Securities and Exchange
Commission since the end of Seller's last fiscal year; (iv) result in the
creation of, or with the passage of time result in the creation of, any
Encumbrance upon any assets or properties of the Business; or (v) require the
Seller or any Purchased Subsidiary to obtain any consent of or make any filing
with any governmental entity or other person (other than as referred to in
clause (iii) above), except as may be required under the HSR Act, except where
the failure to obtain any such consent or make any such filing would have a
Material Adverse Effect on the Business.
8.4 FINANCIAL STATEMENTS AND RELATED MATTERS: Set forth in Schedule 8.4
hereto is an unaudited Statement of Net Assets of the Business as at September
30, 1998 (the "Reference Statement of Net Assets") and related unaudited
statements of income of the Business for the indicated period then ended. Such
financial statements are collectively referred to herein as the "Financial
Statements." The Financial Statements have been prepared from the books and
records of the Business, and the Reference Statement of Net Assets has been
prepared in accordance with (the accounting principles ("Seller's Accounting
Principles") attached as Schedule 8.4, consistently applied. The accounting
books and records
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of the Business are accurate and complete in all material respects. The Business
has no direct or indirect liabilities, losses or obligations of any nature,
whether absolute, accrued, contingent or otherwise, that would be required to be
reflected on a balance sheet or the notes thereto prepared in accordance with
GAAP consistently applied other than (i) liabilities reflected, accrued or
reserved for in the Reference Statement of Net Assets; (ii) liabilities
disclosed in the Schedules to this Agreement; (iii) liabilities incurred in the
ordinary course of business subsequent to the date of the Reference Statement of
Net Assets and not inconsistent with past practice; (iv) liabilities or
performance obligations arising in the ordinary course of business (and not as a
result of a breach or default by the Seller or any Purchased Subsidiary out of
or under agreements, contracts, leases, arrangements or commitments to which the
Seller or a Purchased Subsidiary was a party as of the Balance Sheet Date; or
(v) liabilities under this Agreement.
8.5 REAL PROPERTY:
(a) Schedule 8.5(a) sets forth a list of all Owned Real Property and
all rights of the Business to acquire real property. Except for
Permitted Liens and the matters listed on Schedule 8.5(a)
(collectively, the "Permitted Owned Real Property Exceptions"), Seller
or a Purchased Subsidiary has good and marketable title to the Owned
Real Property, free and clear of all Encumbrances or other matters
affecting title.
(b) Schedule 8.5(b) sets forth a list of all Leases. Each Lease is in
full force and effect and all rent and other sums and charges payable
thereunder by Seller or a Purchased Subsidiary are current and no
notice of default by Seller or a Purchased Subsidiary or termination
under any Lease is outstanding. A complete and correct copy of each
Lease has been provided to Purchaser. All material work required to be
done by the Business as a tenant on such Real Property has been duly
performed.
(c) The improvements on the Real Property located in Milwaukee,
Wisconsin do not contain any interior or exterior structural defects or
any material defects in the plumbing, electrical, mechanical, heating,
ventilating or air conditioning systems. Such improvements do not
contain any conditions that would constitute a threat to worker health
or safety or conditions which would have a material adverse effect on
the ability of the Business to be conducted at such facility as
presently conducted. There has been no damage to any portion of the
Real Property caused by fire or other casualty which has not yet been
fully repaired or restored. All roofs and basements are in good
condition and free of leaks. There has been no notice from any
insurance company requesting the performance of any work or alteration
with respect to the Real Property.
(d) All Real Property has adequate water, sewer and electric supply for
its present use.
(e) To the Knowledge (as hereinafter defined) of Seller, there is no
pending or contemplated annexation or condemnation or similar
proceeding affecting all or any portion of the Real Property, proposed
or pending proceeding to change or redefine the zoning classification
of all or any portion of the Real Property and no pending imposition of
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any special or other assessments for which Purchaser or a Purchased
Subsidiary would be responsible.
8.6 TANGIBLE ASSETS OTHER THAN OWNED REAL PROPERTY: Other than Owned
Real Property, which is the subject of Section 8.5 hereof, Seller and the
Purchased Subsidiaries have good, valid and marketable title to all the material
tangible assets of the Business, except those sold or otherwise disposed of in
the ordinary course of business consistent with Section 7.3(b), free and clear
of all Encumbrances, except for Permitted Liens and those tangible assets
subject to leases as set forth on Schedule 8.7. All material equipment included
in the Purchased Assets is in good working order and condition, ordinary wear
and tear excepted, and has been maintained in accordance with normal commercial
practice in all material respects. Except for the Excluded Assets, the Purchased
Assets comprise all assets necessary to operate the Business as presently
conducted in all material respects.
8.7 CONTRACTS, CUSTOMERS AND SUPPLIERS: (a) To the Knowledge of Seller,
Schedule 8.7 lists all material contracts, agreements, guarantees of
payment or performance, licenses, leases of personal property or
conditional sales contracts and all sales agency, sales representative
and severance agreements, and all employment and consulting agreements
providing for annual base payments in excess of $75,000, relating to or
affecting the Business which extend beyond the Closing Date, other than
(i) purchase orders and sales orders entered into in the ordinary
course of business and (ii) contracts which by their terms terminate or
are unconditionally terminable by Seller without penalty within one
year after the date hereof and which individually involve a commitment
for less than $125,000. Except as set forth on Schedule 8.7, Seller and
each Purchased Subsidiary have in all material respects performed all
the obligations required to be performed by them to date, and are not
in default in any respect under any Assigned Contract except for
possible defaults which do not in any material respect impair the
ability of the Business to conduct its operations as heretofore
conducted.
(b) There has not been any adverse change and there are no facts known
to Seller (or facts which arise between the date hereof and the
Closing) which may reasonably be expected to indicate that any adverse
change may occur in the business relationship of the Business with any
customer or supplier accounting for more than $500,000 of goods or
services provided during the 12 months prior to the date hereof; a list
of the ten largest customers and seven largest suppliers of the
Business (by dollar amounts) over the past 12 months is set forth in
Schedule 8.7. Contact names, phone numbers and addresses for such
customers and suppliers will be provided within five days of the date
hereof. Except as set forth in Schedule 8.7, neither the Seller nor, to
its Knowledge, any officer, director, relative or Affiliate of Seller
owns any interest in any person or entity which is a supplier or
customer of the Business (other than less than 5% of interests in
publicly-traded companies) or has any contractual arrangements with the
Business. Neither Seller nor any Purchased Subsidiary is engaged in
material disputes with any of its sales representatives or agents.
Except as set forth on Schedule 8.7, each such sales representative or
agent has remitted to Seller or a Purchased Subsidiary all amounts
collected from customers and owed to Seller nor any Purchased
Subsidiary. Except as set forth on Schedule 8.7, the Business has no
liability to Affiliates or third parties for indebtedness other than
trade payables for goods provided in the ordinary course of business
which are current, including without limitation indebtedness to
financial
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institutions or any guaranty of the obligations of any other person;
and except as provided in Section 2.1(j) any such liability,
indebtedness or obligation will be terminated, contributed to capital
or otherwise provided for at Seller's expense on or prior to the
Closing Date.
8.8 LITIGATION: Except as set forth on Schedule 8.8, there have not
been during the past three years, nor are there presently, any claims, actions,
suits, or investigations pending, or to the Knowledge of Seller threatened,
against Seller or any Purchased Subsidiary affecting the Business, Purchased
Assets or Assumed Liabilities, or against the transactions contemplated by this
Agreement, at law or in equity or before or by any court or other governmental
agency or instrumentality, domestic or foreign, or any arbitral body an adverse
outcome of which would have a Material Adverse Effect on the Business or a
material adverse effect on the ability of Seller to consummate the transactions
contemplated hereby. Except as set forth on Schedule 8.8, there are no charges
or complaints of discrimination pending before the Equal Employment Opportunity
Commission or any state or local agency with respect to the Business. There is
no outstanding order, injunction or decree affecting the Business or the ability
of Seller to consummate the transactions contemplated hereby.
8.9 COMPLIANCE WITH LAW:
(a) Except as set forth on Schedule 8.9(a), each of Seller, with
respect to the Business, and the Purchased Subsidiaries, is duly
complying and has during the past three years duly complied, in all
material aspects, in respect of its business, operations and
properties, with applicable laws, rules, regulations, orders, building
and other codes, zoning and other ordinances, permits, authorizations,
judgments and decrees of all governmental entities. Except as set forth
on Schedule 8.9(a), Seller has no Knowledge of any present or past
failure so to comply or of any past or present events, activities or
practices of the Business which may be construed to indicate
interference with or prevention of continued compliance in any material
respect, with any laws, rules or regulations or which may give rise to
any common law or statutory liability, or otherwise form the basis of
any material claim, action, suit, proceeding, hearing or investigation
against the Business.
(b) Each of Seller, with respect to the Business, and the Purchased
Subsidiaries, has duly obtained all permits, concessions, grants,
franchises, licenses and other governmental authorizations and
approvals (collectively, "Permits") necessary for the conduct of its
business; each of the foregoing is set forth in Schedule 8.9(b) and is
in full force and effect; there are no proceedings pending or, to the
Knowledge of the Seller, threatened which may result in the revocation,
cancellation, suspension or modification thereof; and the consummation
of the transactions contemplated hereby will not result in any such
revocation, cancellation, suspension or modification.
This Section 8.9 does not relate to environmental matters, it being the
intent of the parties that the only Section relating to environmental matters
shall be Section 8.13.
8.10 EMPLOYEE BENEFIT PLANS:
(a) Schedule 8.10(a) lists all the employee benefit plans, policies and
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arrangements (whether or not written, insured or self-insured)
including, without limitation, each "employee benefit plan" (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) and each other profit sharing, compensation,
fringe benefit, health, life, stock option, bonus, deferred
compensation, excess, supplemental executive compensation, cafeteria,
employee stock purchase, vacation, sickness, post- retirement,
disability, severance, change in control, retention, individual
employment, consulting or other plan, policy, arrangement, trust fund
or agreement established, sponsored, maintained or contributed to (or
with respect to which any obligation to contribute has been undertaken)
by Seller or any ERISA Affiliate during the last six years with respect
to active or retired U.S. employees of the Business or their
beneficiaries (the "Benefit Plans"). For purposes of this Agreement, an
"ERISA Affiliate" is any entity that would be deemed a "single
employer" with the Seller under Section 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended (the "Code") or Section 4001
of ERISA.
(b) All Benefit Plans are maintained and operated in all material
respects in accordance with their respective terms and are in
compliance in all material respects with the applicable requirements of
law, including without limitation ERISA and the Code.
(c) Except as set forth on Schedule 8.10(c),each Benefit Plan which is
intended to qualify under Section 401(a) of the Code has received a
favorable determination letter that it is so qualified and that its
trust is exempt from taxation, and Seller is not aware of any facts
which caused or could reasonably be expected to cause such favorable
determination letters to be revoked or the loss of qualification or
exemption.
(d) Neither Seller nor any ERISA Affiliate maintains or contributes to,
has maintained or contributed to, has been required to contribute to or
has any liability with respect to a "multi-employer plan," as such term
is defined in Section 414(f) of the Code or Sections 3(37) or 4001(a)
of ERISA, with respect to current or former employees of the Business.
(e) No "reportable event" within the meaning of Section 4043(b) of
ERISA has occurred, or is expected to occur, and the consummation of
the transactions contemplated by this Agreement will not result in a
reportable event. No amounts payable under any Benefit Plan will fail
to be deductible for federal income tax purposes by virtue of Sections
280G of the Code. Except as set forth on Schedule 8.10(e), neither the
Company nor any ERISA Affiliate has any unfunded liabilities pursuant
to any Benefit Plan that is an employee pension plan under Section 3(2)
of ERISA.
(f) Schedule 8.10(f) lists all employee benefit plans maintained by
Seller or the Business (collectively, the "Foreign Plans") for the
benefit of current salaried and hourly non-U.S. employees ("Foreign
Participants") and persons claiming through them, as well as former
salaried and hourly non-U.S. employees of the Business other than a
plan (or contribution to a plan) that is a governmental plan. Each
Foreign Plan intended to qualify as tax-registered or tax-favored plan
under a foreign jurisdiction is the subject of a favorable
determination or similar approval, to the extent available, of the
applicable foreign governmental authorities and nothing has occurred or
is expected to occur that impaired or
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could impair such determination or approval or result in the
imposition of any penalty or liability. With respect to each Foreign
Plan, the fair market value of the assets of each funded Foreign Plan,
the liability of each insurer for any Foreign Plan funded through
insurance or the book reserve established for any Foreign Plan,
together with any accrued contributions, is sufficient to procure or
provide for the accrued benefit obligations, as of the date of this
Agreement, with respect to all current and former participants in such
Foreign Plan according to the actuarial assumptions and valuations most
recently used to determine employer contributions to such Foreign Plan,
which shall be reasonable, and no transaction contemplated by this
Agreement shall cause such assets or insurance obligations to be less
than such benefit obligations. Seller and each Purchased Subsidiary has
performed, in all material respects, all obligations required with
respect to each Foreign Plan and each Foreign Plan is maintained and
operated in all material respects in accordance with its terms and is
in compliance in all material respects with applicable law. Each
Foreign Plan covers solely employees of the Purchased Subsidiaries and
does not cover employees of Seller or any ERISA Affiliate other than
the Purchased Subsidiaries.
(g) All payments required by any Benefit Plan, any Foreign Plan, any
collective bargaining agreement or other agreement, or by law
(including, without limitation, all contributions, insurance premiums,
or intercompany charges) have been made on a timely basis and, with
respect to all periods through the date of the Closing, shall have been
made prior to the Closing or provided for by Seller, as applicable, by
full accruals on the financial statements relating to the Business.
Except as contemplated under Sections 12.5 and 12.6 hereunder, the
consummation of the transactions contemplated by this Agreement will
not give rise to any liability, including, without limitation,
liability for severance pay, unemployment compensation, termination pay
or withdrawal liability, or accelerate the time of payment or vesting
or increase the amount of compensation or benefits due to any employee
or director of the Business (whether current, former, or retired) or
their beneficiaries solely by reason of such transactions. Neither the
Seller nor any ERISA Affiliate, or any officer or employee thereof, has
made any promises or commitments, whether legally binding or not, to
create any additional plan, agreement, or arrangement, or to modify or
change any existing Benefit Plan or Foreign Plan as it relates to the
Business.
8.11 PURCHASED RIGHTS: EXCEPT AS SET FORTH IN SCHEDULE 8.11,
(a) Seller or a Purchased Subsidiary owns, possesses, or has the right
to use all the Purchased Rights. Except as set forth in Schedule 8.11,
such Purchased Rights comprise all intellectual property necessary for
the Business to operate as presently conducted in all material
respects.
(b) To the Knowledge of Seller, no product or service manufactured,
marketed, distributed or sold or proposed to be manufactured, marketed,
distributed or sold by the Business, or any intellectual property
otherwise used by the Business, infringes, misappropriates or misuses
any rights of any other person; and there is no pending or, to the
Knowledge of Seller, threatened Claim against Seller, the Business or
any Purchased Subsidiary contesting the validity of or right to use any
of the Purchased Rights or any intellectual property licensed to the
Business pursuant to an Assigned Contract. Except as set
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forth on Schedule 8.11, neither the Seller, on behalf of the Business,
nor any Purchased Subsidiary, has asserted any claim against any other
person that such person has violated, infringed, misappropriated or
misused any Purchased Right or any intellectual property licensed to
the Business pursuant to an Assigned Contract, nor, to the Knowledge of
Seller, is there any basis for such an assertion. Invention assignment
and confidentiality agreements in the form previously provided to the
Purchaser have been obtained form substantially all employees of the
Business.
8.12 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Schedule 8.12and Section 7.3, since the date of the Reference Statement of Net
Assets, the Business has been conducted only in the ordinary course and
consistent with past practice, and since such date neither Seller, with respect
to the Business, nor any Purchased Subsidiary has suffered any Material Adverse
Effect on the Business; suffered any material damage, destruction or casualty
loss (whether or not covered by insurance); granted any increase in the rate or
terms of compensation payable or to become payable to any of its directors,
officers or key employees, except increases occurring in the ordinary course of
business in accordance with its customary practices; amended or granted any
increase in the rate or terms of any employee benefit plan payment or
arrangement; entered into any material agreement except agreements in the
ordinary course of business, or any employment or severance agreement; made any
change in its accounting methods, principles or practices; borrowed or agreed to
borrow any funds for which Purchaser or a Purchased Subsidiary would be liable
after the Closing; paid, discharged or satisfied any claim, liability or
obligation in excess of $250,000, other than the payment, discharge or
satisfaction of liabilities and obligations incurred in the ordinary course of
business and consistent with past practice; prepaid any obligation having a
fixed maturity of more than 90 days form the date such obligation was issued or
incurred; not paid, within a reasonable date of when due, consistent with past
practice, any accounts payable in excess of $250,000 in the aggregate, or sought
the extension of the payment date of any accounts payable in excess of $250,000
in the aggregate; written down the value of any inventory; permitted or allowed
any of its Property or assets to be subjected to any Encumbrance, except for
liens for Permitted Encumbrances and Encumbrances specifically set forth in the
schedules hereto; written off as uncollectible any notes or accounts receivable
in excess of $250,000; agreed to guaranty the obligations of any other person or
entity; granted any person or entity any power of attorney; canceled any debts
or waived any claims or rights in excess of $100,000; sold, transferred or
otherwise disposed of any of its properties or assets in excess of $100,000 in
the aggregate, except for the sale of inventory in the ordinary course of
business and consistent with past practice; disposed of, abandoned or permitted
to lapse any rights to the use of any Purchased Rights or disposed of or
disclosed, or permitted to be disclosed (except as necessary in the conduct of
its business), to any person other than representatives of Purchaser, any trade
secret, formula, process, know-how or similar information not theretofore a
matter of public knowledge; made any capital expenditures or commitments in
excess of $250,000 in the aggregate for repairs or additions to property, plant,
equipment or tangible capital assets; amended or taken steps to amend the
organizational documents of any Purchased Subsidiary; suffered any loss or
become aware of any prospective loss of any customers, suppliers, distributors,
accounts, product line or sales or management personnel; or agreed, whether in
writing or otherwise, to take any action described in this Section 8.12.
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8.13 ENVIRONMENTAL MATTERS:
(a) To the Knowledge of Seller, the Business and the Purchased Assets
are in compliance with Environmental Requirements, except for such
noncompliances as would not have a Material Adverse Effect on the
Business. "Environmental Requirements"shall mean all federal, state and
local statutes, regulations, and ordinances and the common law
concerning pollution or protection of human health, safety or the
environment, including without limitation all those relating to the
presence, use, production, generation, handling, transportation,
treatment, storage, disposal, distribution, labeling, testing,
processing, discharge, release, threatened release, control, or cleanup
of any hazardous materials, substances or wastes, as such requirements
are enacted and in effect on or prior to the Closing Date.
(b) To the Knowledge of Seller and except as set forth on Schedule
8.13, the Business has not received any written notice, report or
other information regarding any actual or alleged material violation
of Environmental Requirements, or any Environmental Liabilities,
including any investigatory, remedial or corrective obligations,
relating to the Business or the Purchased Assets arising under
Environmental Requirements, the subject of which would have a Material
Adverse Effect on the Business. For purposes of this Agreement, the
term "Environmental Liabilities" shall mean any claims, judgments,
damages (including punitive damages), losses, penalties, fines,
liabilities, encumbrances, liens, violations, costs, and expenses
(including attorneys' and consultants' fees) of investigation,
remediation, monitoring, or defense of any matter relating to human
health, safety, or the environment of whatever kind or nature by any
party, entity, authority which are incurred as a result of (i) the
existence (or alleged existence) prior to or on the Closing Date of
materials regulated under Environmental Requirements ("Hazardous
Substances") in, on, under, at, or emanating from the Real Property,
the Purchased Assets, or any real property formerly owned, leased,
operated, or managed by Seller or any Purchased Subsidiary; (ii) the
offsite transportation, treatment, storage, or disposal (or alleged
offsite transportation, treatment, storage, or disposal) of Hazardous
Substances generated by Seller or any Purchased Subsidiary; or (iii)
the violation of or non-compliance with (or alleged violation of or
non-compliance with) any Environmental Requirements by Seller or any
Purchased Subsidiary, or which otherwise arise under Environmental
Requirements as a result (or allegedly as a result) of the acts or
omissions of Seller or any Purchased Subsidiary.
(c) Seller and the Purchased Subsidiaries have all the Permits
necessary for the conduct of the Business and for the operation of or
on the Purchased Assets which are required under the Environmental
Requirements, all of which are set forth on Schedule 8.13 (the
"Environmental Permits"). Seller and the Purchased Subsidiaries are in
material compliance with the terms and conditions of all such
Environmental Permits and, to the Knowledge of Seller, no reason exists
why Purchaser and the Purchased Subsidiaries would not be capable of
continued operation of the Business and the Purchased Assets in full
compliance with the Environmental Permits and Environmental
Requirements.
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(d) Neither Seller nor any Purchased Subsidiary has contractually, by
operation of law, by Environmental Requirements, or otherwise assumed
or succeeded to any environmental liabilities of any predecessors or
any other person or entity which relate in any way to the Business or
the Purchased Assets.
(e) Except as set forth on Schedule 8.13, there are no conditions
existing with respect to the Business or any Purchased Asset that
require, or which with the giving of notice or the passage of time or
both will reasonably likely require, remedial or corrective action,
removal, monitoring, or closure pursuant to Environmental Requirements.
(f) This Section 8.13 contains the sole and exclusive representations
and warranties of Seller with respect to any environmental matters,
including without limitation any arising under any Environmental
Requirements.
8.14 ACCOUNTS RECEIVABLE; INVENTORY; Product Warranty: Except as
provided on Schedule 8.14, the Purchased Receivables represent sales actually
made in the ordinary course of business for goods or services delivered or
rendered in bona fide arm's-length transactions in accordance with the standard
credit practices of the Business, have not been extended or rolled over in order
to make them current, are not subject to counterclaims or setoffs and constitute
only valid, undisputed claims. Except as provided in Schedule 8.14 or reserved
for in Schedule 8.4, the Purchased Inventories do not include any items which
are obsolete, damaged, below standard quality, non-merchantable or slow moving
(i.e., items that are for discontinued or expected to be discontinued product
lines, or items that (A) have not been used or sold within 12 months prior to
the date hereof or (B) are in quantities exceeding the amount that has been used
or sold within that 12-month period). Except for the Telcom product line, which
is dealt with under Section 15.8, Seller has no reason to expect that, after the
Closing, there will be any increase in the rates of claims relating to
warranties for any line of the products sold by the Business from the rate for
that product line reflected in Schedule 8.14. To the Knowledge of Seller,
Schedule 8.14 sets forth in reasonable detail an accurate and complete summary
of all product warranty claims made by customers of the Business from January 1,
1997 to the date hereof and also sets forth a brief description of each express
warranty, service or repair policy applicable to the products sold by the
Business.
8.15 TAX MATTERS:
(a) In relation to the Purchased Subsidiaries and except as set forth
on Schedule 8.15, (i) Seller has paid all Taxes (as hereinafter
defined) required to be paid through the date hereof and will pay all
Taxes required to be paid by it for periods ending on or prior to the
Closing Date and has filed or will, prior to the Closing, file all
returns, declarations of estimated Tax, Tax reports, information
returns and statements required to be filed by it prior to the Closing
(other than those for which extensions shall have been granted prior to
Closing) relating to any Taxes with respect to any income, properties
or operations of Seller prior to the Closing (collectively, "Returns");
(ii) as of the time of filing, the Returns correctly reflected (and, as
to any Returns not filed as of the date hereof, will correctly reflect)
the facts regarding the income, business, assets, operations,
activities and status of Seller and any other
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information required to be shown therein; (iii) Seller has timely paid
or, if not yet due, made provisions on its books and records for all
Taxes relating to the operations of the Business that have been shown
as due and payable on the Returns that have been filed; and (iv) Seller
has adequately accrued for any unpaid Taxes relating to any period
ending prior to the Closing Date.
(b) As of the Closing Date, there are no outstanding federal, state or
local tax assessments from any taxing or governmental authority against
which the Purchased Assets have been levied, or which have given rise
to any security interest or other encumbrance thereon.
(c) "Taxes" means all income taxes (including any tax on or based upon
net income, or gross income, or income as specially defined, or
earnings, or profits, or selected items of income, earnings or profits)
and all gross receipts, sales, use, ad valorem, transfer, franchise,
license, withholding, payroll, employment, excise, severance, stamp,
occupation, premium, property or windfall profits taxes, real property
tax, alternative or add-on minimum taxes, customs duties or other
taxes, fees, assessments or charges of any kind whatsoever, together
with any interest and any penalties, additions to tax or additional
amounts imposed by any governmental authority.
8.16 LABOR MATTERS: Except as disclosed on Schedule 8.16, (a) neither
Seller nor any Purchased Subsidiary is a party to or subject to any collective
bargaining agreement with any labor organization with respect to any operations
of the Business; (b) there are no agreements with labor unions, work councils or
associations representing employees of the Business, and no unions or other
collective bargaining units have been certified or recognized by any of Seller,
with respect to the Business, or the Purchased Subsidiaries as representing any
of its employees and there are no existing union organizing efforts or
representation questions with respect to any of the employees of the Business;
and (c) there is no labor strike or dispute, grievance, arbitration proceeding,
slowdown or stoppage, or charge of unfair labor practice actually pending,
threatened against or affecting the Business, nor have there been any of the
foregoing within the past three years. Schedule 8.16 sets forth a list of all
employees of the Business with an annual base salary in excess of $100,000 and
all individuals who are consultants and independent contractors of the Business
who have during the last 12 months received, or who are entitled to receive in
the future, annual compensation in excess of $100,000. Purchaser has been
provided with accurate and complete copies of all personnel manuals and policies
of the Business.
8.17 QUESTIONABLE PAYMENTS. To the Knowledge of Seller, none of the
Seller, with respect to the Business, the Purchased Subsidiaries or any
director, officer, agent, employee, or any other person acting on behalf of the
Seller, with respect to the Business, or any of the Purchased Subsidiaries, has,
directly or indirectly, used any corporate funds for unlawful contributions,
gifts, entertainment, or other unlawful expenses; made any unlawful payment to
federal, state, local or foreign government officials or employees or to
political parties or campaigns; established or maintained any unlawful fund of
corporate monies or other assets; made or received any bribe, or any unlawful
rebate, payoff, influence payment, kickback or other payment; given any favor or
gift which is not deductible for federal income tax purposes;
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or made any bribe, kickback, or other payment of a similar or comparable nature,
to any federal, state, local or foreign governmental or non-governmental person,
regardless of form, whether in money, property, or services, to obtain favorable
treatment in securing business or to obtain special concessions, or to pay for
favorable treatments for business or for special concessions secured.
8.18 DISCLOSURE. The representations and warranties contained in
Sections 8.1-8.17, inclusive, do not intentionally and fraudulently contain any
untrue statement of a material fact or intentionally and fraudulently omit to
state any material fact necessary in order to make the statements contained
therein not misleading. While Seller has attempted in good faith to cross
reference between Schedules, the parties agree that any item disclosed in any
Schedule or listed in the index to the Data Room established by Seller and
provided to Purchaser prior to the date hereof, has for all purposes and for all
subdivisions of Article VIII been disclosed by Seller to the extent, for such
purposes and for all subdivisions of Article VIII for which a reasonable
reference can be drawn from the item as disclosed in the Data Room or a Schedule
hereto; provided, that no information that has been redacted shall be deemed to
have been provided to Purchaser. Except where information has been specifically
identified as being redacted, all copies of documents provided to Purchaser
prior to the date hereof are true, complete and correct copies of such
documents.
ARTICLE IX
Representations and Warranties of Purchaser
Purchaser represents and warrants:
9.1 ORGANIZATION AND AUTHORITY: Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of Delaware, and
Purchaser has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now being conducted, to
execute and deliver this Agreement and the Related Documents and to perform the
obligations to be performed by it hereunder and thereunder, and to consummate
the transactions contemplated hereby and thereby.
9.2 CORPORATE ACTION; NO CONFLICT: The execution, delivery and
performance by Purchaser of this Agreement and the Related Documents to be
delivered by Purchaser and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all necessary
corporate action on the part of Purchaser. This Agreement has been duly and
validly executed and delivered by Purchaser and is, and each of the Related
Documents when executed and delivered by Purchaser in accordance with its terms
will be, the valid and binding obligation of Purchaser, enforceable in
accordance with the terms thereof, except as limited by bankruptcy, insolvency,
reorganization or similar laws affecting creditors rights generally and except
that the term "enforceable" shall not be deemed to include the availability of
the remedy of specific performance or any other equitable remedy available in
the discretion of a court. Neither the execution, delivery or performance by
Purchaser of this Agreement or any Related Document, nor the consummation by
Purchaser of the transactions contemplated hereby or thereby, nor compliance by
Purchaser with any provision hereof or thereof will (i) conflict with or result
in a breach of any provision of the
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charter or by-laws of Purchaser or (ii) violate any provision of law, statute,
rule or regulation or any order, writ, injunction, permit, judgment or decree of
any court or other governmental or regulatory authority applicable to Purchaser
or (iii) result in a breach of, or constitute a default under (with or without
notice, lapse of time or both) or result in the invalidity of, or accelerate the
performance required by or cause or give rise to any right of acceleration or
termination of any right or obligation pursuant to, or require the consent of
the other party to, any agreement set forth as an exhibit to Parent's Annual
Report on Form 10-K for Parent's last fiscal year or any Quarterly Reports on
Form 10-Q or Current Reports on Form 8-K filed with the Securities and Exchange
Commission since the end of Parent's last fiscal year, to the extent such
agreements will be in effect on the Closing Date; (iv) result in the creation
of, or with the passage of time result in the creation of, any Encumbrance upon
any assets or properties of the Purchaser, or (vii) require Parent to obtain any
consent of or make any filing with any governmental entity, except as may be
required under the HSR Act, except where the failure to obtain any such consent
or make any such filing would have a material adverse effect on the business,
operations, properties, prospects or condition (financial or other) of Parent.
ARTICLE X
Conditions to Obligations of Purchaser
The obligations of Purchaser under this Agreement are, at its option,
subject to the fulfillment, on or before the Closing Date, of each of the
following conditions precedent:
10.1 PERFORMANCE OF COVENANTS: Seller shall have performed and complied
with all terms, covenants and conditions required by this Agreement to be
performed or complied with by it on or before the Closing Date.
10.2 REPRESENTATIONS AND WARRANTIES: The representations and warranties
of Seller contained in this Agreement shall be true and correct in all material
respects as of the date hereof and as of the Closing Date as though such
representations and warranties had been made as of the Closing Date, except (a)
with respect to breaches or alleged breaches of the representations and
warranties contained in Article VIII that are included in a Notice of Breach
delivered pursuant to Section 7.1, where the bona-fide claims for a proposed
adjustment to Purchase Price are no greater than an aggregate of $15 million
(the "Walkaway Amount"); (b) to the extent of changes or developments
contemplated by the terms of this Agreement; and (c) for representations and
warranties that speak as of a specific date or time (which need only be true and
correct as of such date or time); and Purchaser shall have received at the
Closing a certificate of an officer of Seller, dated as of the Closing Date, to
such effect.
10.3 OPINION OF COUNSEL: Purchaser shall have received from Seller's
counsel an opinion dated the Closing Date as to matters related to SJBC, in form
and substance reasonably satisfactory to Purchaser
10.4 GOVERNMENT FILINGS; CONSENTS AND APPROVALS: All applicable waiting
periods (including any extensions thereof) required under the HSR Act and, all
equivalent regulations which require filings to be made in respect of the
Purchased Subsidiaries, shall have expired
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or been terminated, without the threat or initiation of legal action by the
relevant government authority. All other required governmental and third-party
consents and approvals and all Permits necessary for Purchaser to operate the
Business in all material respects as conducted by Seller on the date hereof
shall have been obtained without the imposition of terms that would have an
adverse effect on Purchaser or the Business.
10.5 NO PROCEEDINGS: There shall not be pending or threatened, any
claim, suit, action or other proceeding brought by a governmental agency before
any court or governmental agency, seeking to prohibit or restrain the
transactions contemplated by this Agreement or seeking damages in connection
therewith.
10.6 AUTHORIZATION: All action necessary to authorize the execution,
delivery and performance by Seller of this Agreement and each of the Related
Documents and the consummation of the transactions contemplated hereby and
thereby shall have been duly and validly taken by Seller, and Seller shall have
full power and right to consummate the transactions contemplated hereby and
thereby.
10.7 SECRETARY'S CERTIFICATE: Seller shall have delivered to Purchaser
a certificate of the Secretary or Assistant Secretary of Seller as to the
corporate resolutions authorizing the execution and delivery of this Agreement
and the transactions contemplated thereby and the incumbency and authority of
the person(s) signing this Agreement and the Related Documents for Seller.
10.8 RESIGNATION. Purchaser shall have received the written evidence of
the resignation or removal of those persons referred to in Section 5.1(f) from
all positions with any of the Purchased Subsidiaries.
10.9 RELOCATION OF R&D LABORATORY. The equipment listed in Schedule
1.1(a)(iii) and the 10 employees connected therewith shall have been relocated
to the Keefe Avenue facility.
10.10 ACCOUNTS RECEIVABLE AGING. Purchaser shall have received a true,
complete and correct accounts receivable aging of the Business as the last month
end prior to the Closing Date.
10.11 TITLE INSURANCE. Purchaser shall have obtained owners policies of
title insurance on the Owned Real Property in amounts, and containing only such
exceptions, as are satisfactory to Purchaser.
10.12 TAXES FOR JOHNSON CONTROLS BATTERY (U.K.) Ltd. Seller shall
provide Purchaser with evidence that it has made estimated tax payments equal to
its pro-rated tax liability for the operations of Johnson Control Batteries
(U.K.) Ltd. through the Closing, which shall have been made within five days
prior to the Closing Date.
10.13 FINANCING. Purchaser shall have obtained financing for the
acquisition and ongoing operations of the Business on terms acceptable to
Purchaser.
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10.14 SUPPLY ARRANGEMENTS. At Purchaser's election, Seller and
Purchaser shall have entered into a five-year supply arrangement pursuant to
which Purchaser may purchase lead for the Business on the same terms as Seller
is able to purchase it on the date hereof; provided, that if any such lead is
provided to Seller by third party providers on the date hereof pursuant to
supply agreements having a term of less than five years from the Closing Date,
Purchaser shall have the right to "piggyback" on any renewals of Seller's
existing agreements with those suppliers upon the same terms and conditions as
Seller for up to a total of five years. At Purchaser's election, Seller and
Purchaser shall have entered into an agreement pursuant to which Seller would
add the capital equipment it would need to supply Purchaser's needs for poly
jars for the Business for a minimum of five years at prices in effect on the
date hereof and tooling to produce poly jars for such period at an agreed upon
price.
10.15 OTHER AGREEMENTS. Seller and Purchaser shall have entered into
agreements providing for the continuation of all service, license, supply and
other agreements and arrangements between Seller, its ultimate parent company or
any of their respective Affiliates and the Business, other than with respect to
back- office services, on terms reasonably acceptable to Purchaser and Seller.
These arrangements will include, among other things, an agreement having a term
of at least five years concerning the provision of technical services, products,
distribution and licenses regarding industrial and SLI batteries to SJBC, a
distribution agreement with Johnson Controls S.P.A., a license or sub-license of
the Lemulsen patent and other trademark and technology license agreements.
Seller and Purchase shall have also entered into the Transition Services
Agreement referred to in Section 13.13.
10.16 CHINA. If all conditions to Closing are satisfied other than
conditions with respect to SJBC, then, notwithstanding anything contained in
this Agreement to the contrary:
(a) the Closing shall proceed as to all components of the Business
other than SJBC;
(b) all representations, warranties, covenants, conditions, indemnities
and other provisions of this Agreement (and any other agreements
entered into between Seller and Purchaser at the Closing) relating to
SJBC shall continue in full force and effect until the consummation of
the acquisition of SJBC by Purchaser (the "SJBC Closing"); provided,
that either party may terminate the obligation of Purchaser and Seller
to consummate the SJBC Closing if the SJBC Closing has not occurred on
or prior to the close of business on November 23, 1999 or such other
date as the parties may agree;
(c) Purchaser, Seller and their respective Affiliates shall enter into
all interim agreements reasonably necessary for the business of SJBC to
continue being conducted as conducted on the date hereof, on terms
reasonably agreeable to the parties;
(d) on the Closing Date, the cash portion of the Purchase Price payable
by Purchaser shall be $120 million, and the assets and liabilities of
SJBC shall be excluded from the Reference Statement of Net Assets and
the Closing Statement of Net Assets for the purpose of the post-closing
adjustment pursuant to Article IV;
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(e) prior to the SJBC Closing, SJBC shall be permitted to manufacture,
sell and distribute industrial batteries in China and elsewhere in the
world as provided for in existing agreements between SJBC and Seller on
behalf of the Business;
(f) prior to the SJBC Closing, Seller shall not permit SJBC to make any
dividends or distributions, and shall cause SJBC to apply all cash
generated by the SJBC business in excess of normal operational needs to
(i) capital expenditures required under the joint venture agreement of
SJBC or otherwise approved by Purchaser and (ii) the repayment of
third-party indebtedness and intercompany trade payables owing to
Seller and its Affiliates;
(g) no portion of the Purchase Price will be allocated to SJBC until
after the SJBC Closing;
(h) at the SJBC Closing, Purchaser shall pay the remaining $15 million
cash portion of the initial Purchase Price to Seller, which shall be
subject to adjustment as provided in Article IV based on a separate
Closing Statement of Net Assets being prepared for SJBC;
(i) at the SJBC Closing, the actions contemplated by Article V to have
taken place at the Closing with respect to SJBC shall take place; and
(j) on the SJBC Closing Date, the agreements and arrangements referred
to in Section 10.15 with respect to the SJBC portion of the Business
shall be entered into.
ARTICLE XI
Conditions to Obligations of Seller
The obligations of Seller under this Agreement are, at its option,
subject to the fulfillment, on or before the Closing Date, of each of the
following conditions precedent:
11.1 PERFORMANCE OF COVENANTS: Purchaser shall have performed and
complied with all terms, covenants and conditions required by this Agreement to
be performed or complied with by it on or before the Closing Date.
11.2 REPRESENTATIONS AND WARRANTIES: The representations and warranties
of Purchaser contained in this Agreement shall be true and correct in all
material respects as the date hereof and as of the Closing Date, as though made
on and as of the Closing Date, except to the extent of changes or developments
contemplated by the terms of the Agreement, and except for representations and
warranties that speak as of a specific date or time (which need only be true and
correct as of such date or time); and Seller shall have received at the Closing
a certificate of an officer of Purchaser, dated as of the Closing Date, to such
effect.
11.3 NOTICE OF BREACH: There shall not have been delivered by Purchaser
Notices of Breach under Section 7.1 which set forth bona-fide claims for
proposed adjustments to the Purchase Price which are greater in the aggregate
than the Walkaway Amount.
11.4 GOVERNMENT FILINGS: All applicable waiting periods (including any
extensions
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thereof) required under the HSR Act and all equivalent laws and regulations
which require filings to be made in respect of the Purchased Subsidiaries, shall
have expired or been terminated, without the threat or initiation of legal
action by the relevant government authority.
11.5 AUTHORIZATION: All action necessary to authorize the execution,
delivery and performance of this Agreement and each of the Related Documents,
and the consummation of the transactions contemplated hereby and thereby shall
have been duly and validly taken by Purchaser, and Purchaser shall have full
power and right to consummate the transactions contemplated hereby and thereby.
ARTICLE XII
Employee Matters
12.1 SCOPE OF SECTION: This Article XII contains the covenants and
agreements of the parties with respect to (a) the status of employment of the
employees of Seller employed in the Business (the "Employees"), and (b) employee
benefit plans.
12.2 EMPLOYMENT STATUS: Purchaser shall offer employment to all of the
Employees who are Active Employees of the Business on the Closing Date (except
those employees listed on Schedule 12.2, who shall be treated in the manner
described in such Schedule); provided, however, any such offer of employment
shall be contingent on the consummation of the Closing. Employees who are on an
approved leave of absence and who have a right to return to work in the Business
or whose employment is covered by a collective bargaining agreement and who are
on layoff with a right under such agreement to return to work in the Business or
who are on short-term (including pregnancy leave) or military leave are to be
considered actively employed, but that Employees on long-term medical and/or
workers compensation disability, and Employees whose employment has terminated
or will terminate prior to the Closing Date are not to be considered actively
employed. For the purposes of this Agreement (i) the terms "right to return to
work", "short-term disability", "long-term disability", and "pregnancy leave"
shall be construed in accordance with the personnel policies of the Business
covering Employees as of the Closing Date (if applicable), and (ii) Employees
who are actively employed in the Business on the Closing Date, as herein
defined, shall be referred to as "Active Employees". Active Employees who
affirmatively accept Purchaser's offer of employment are hereinafter
collectively called "Transferred Employees" and all Employees who are not
Transferred Employees are hereinafter collectively called "Retained Employees."
Notwithstanding the foregoing, nothing herein shall be construed as to prevent
Purchaser from terminating the employment of any Transferred Employee at any
time after the Closing Date for any reason (or no reason). Subject to applicable
law and to the terms of any collective bargaining agreement that Purchaser
assumes or is required to assume as a result of this Agreement or under
applicable law, as of the Closing Date, Purchaser shall offer employment to each
Active Employee at a base salary level equivalent to his/her current base salary
and shall provide employee benefits, including, without limitation, medical and
dental benefits, which are comparable to those benefits provided generally by
Purchaser to its employees who are not Transferred Employees. Notwithstanding
the foregoing, the parties hereto acknowledge that, subject to the terms of any
collectively bargaining agreement
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assumed by Purchaser under Section 12.8, Purchaser retains, in its sole
discretion, the right to amend and/or terminate any or all of its employee
benefit plans or programs from time to time. Seller shall deliver to Purchaser
as of the Closing Date all personnel files relating to Transferred Employees.
12.3 PRIOR SERVICE. With regard to non-represented Transferred
Employees who performed at least one year of service with Seller prior to the
Closing, Purchaser shall cause each employee benefit plan or compensation
arrangement established, maintained or contributed to by Purchaser to grant any
such Transferred Employee credit for all service with Seller for purposes of
eligibility and vesting (and not for benefit accrual purposes) with respect to
any employee pension benefit plan, as defined in Section 3(2) of ERISA, that is
intended to be qualified under Section 401(a) of the Code, and, to the extent
consistent with Purchaser's plans and policies, for purposes of eligibility and
determining the amount of any benefit with respect to any vacation program and
any employee welfare benefit plan as defined in Section 3(1) of ERISA
(including, without limitation, Purchaser's severance plans and policies in
effect from time to time).
12.4 VACATION. As of the Closing Date, Purchaser shall assume all
obligations of Seller to Transferred Employees for any accrued vacation pay
entitlement, provided that such obligations shall have been accrued on the
Closing Statement of Net Assets.
12.5 PENSION PLANS: The Johnson Controls Pension Plan (the "U. S.
Salaried Pension Plan") covers substantially all current non-represented
Employees of the Business who are employed in the United States. The Johnson
Controls Pension Plan Battery Division Hourly Employees (the "U. S. Hourly
Pension Plan") cover substantially all current represented Employees of the
Business who are employed in the United States. Effective as of the Closing
Date, all Active Employees of the Business who have completed at least one year
of service as of the Closing Date (i) shall be vested in their accrued benefit
earned through the Closing Date, and (ii) be eligible for a normal, early or
deferred vested retirement benefit under the U. S. Salaried Pension Plan or the
U. S. Hourly Pension Plan, as applicable, based upon such Employees having
terminated employment with Seller on the Closing Date, and such Employee's age
and years of service under the applicable plan as of that date. Distribution of
the normal, early or deferred vested retirement benefit accrued by any Active
Employee, including without limitation, the time of benefit payment and the form
in which the benefit is payable, shall be determined in accordance with the
applicable terms of the U. S. Salaried Pension Plan or U. S. Hourly Pension
Plan.
12.6 DEFINED CONTRIBUTION PLANS:
(a) The accounts under the Johnson Controls Savings Plan of all Active
Employees of the Business who participate in such Savings Plan on the
Closing Date shall be fully vested as of the Closing Date and shall be
distributable according to the terms of such plan. Seller acknowledges
that on and after the Closing Date the account balances of such Active
Employees shall be distributable from such Savings Plan in accordance
with Section 401(k)(10) of the Code.
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(b) Purchaser shall permit any Transferred Employee who has an account
balance under the Savings Plan (a "Participant") to rollover (whether
by direct or indirect rollover, as selected by such Participant) his or
her "eligible rollover distribution" (as defined under Section
402(c)(4) of the Code) in the form of cash, a promissory note (as
described below) or any combination thereof from the Savings Plan to a
retirement plan maintained by Purchaser intended to qualify under
Section 401(a) of the Code and which contains a cash or deferred
feature under Section 401(k) of the Code ("Purchaser 401(k) Plan").
Purchaser 401(k) Plan shall not impose any waiting periods, service
requirements or other limitations that would prohibit any Participant
from rolling over an eligible rollover distribution from the Savings
Plan into Purchaser 401(k) Plan. Seller and the Savings Plan shall not
place any Participant's plan loan into default or declare a default
with respect to any plan loan so long as such Participant transfers his
or her account balance under the Savings Plan, together with the
promissory note evidencing the plan loan, together with the applicable
loan documentation, to Purchaser 401(k) Plan through a direct rollover.
Such loan shall be assumed and continued by Purchaser 401(k) plan in a
manner substantially similar to the Savings Plan. Purchaser shall amend
Purchaser 401(k) Plan and Seller shall amend the Savings Plan to the
extent necessary in order to effectuate the transactions contemplated
under this Section 12.6. Seller and Purchaser shall cooperate with each
other (and cause the trustees of the Savings Plan and Purchaser 401(k)
Plan to cooperate with each other) with respect to the rollover of the
distributions to the Participants.
12.7 TAX-FREE SPENDING PLANS: The accounts under the Johnson Controls
Tax-Free Spending Plan of all Active Employees who participate in such Spending
Plan on the Closing Date, shall be available according to the terms of such plan
for the reimbursement of eligible claims incurred while the Active Employee was
covered under the plan.
12.8 UNION CONTRACTS: Purchaser shall assume all collective bargaining
agreements and union affiliations in effect with any Purchased Subsidiary.
Purchaser acknowledges that at Closing it will become a successor employer under
such collective bargaining agreements and/or union affiliations and agrees to
assume, perform and discharge all obligations of Seller under such agreements
upon Closing solely with respect to periods on and after the Closing Date.
Seller acknowledges that it shall retain any and all obligations and liabilities
relating to the Benefit Plans for Active Employees for periods prior to Closing
whose employment is covered by a collective bargaining agreement and that
Purchaser shall be entitled, under any such collective bargaining agreement, to
offset any benefit offered to such represented Employees by the same type of
benefit required to be paid to such represented Employees from any Benefit Plan
in order to avoid duplication of benefits.
12.9 WELFARE BENEFIT PLANS - INTERIM SERVICES: Seller agrees, as an
accommodation to Purchaser, that Purchaser may elect at any time prior to
Closing to have Seller continue to operate its 401(k), medical, dental, tax-free
spending, life insurance and disability plans ("Welfare Benefits") for the
benefit of the Transferred Employees during an interim period (the "Interim
Period") commencing on the Closing Date, and ending, for such benefits, on the
earlier of a date specified by Purchaser for such benefits or the first day of
Purchaser's first fiscal quarter coinciding with the last day of or next
following the end of the six (6) month period after the Closing Date; provided
that Transferred Employees shall not be eligible for
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a matching contribution under Seller's 401(k) plan with respect to periods on
and after the Closing Date. Notwithstanding the foregoing, Purchaser may elect
to have Seller continue to provide Welfare Benefits to the Transferred Employees
with or without 401(k) benefits. The purpose of this arrangement is to
facilitate benefit coverage until Purchaser is able to establish successor plans
for the Business. The parties agree that Purchaser is fully responsible for
benefits which are payable after the Closing Date as the result of the continued
operation of these plans for the Business. This Section 12.9 shall not be
construed to impose upon Seller any liability or responsibility under Seller's
or the Business plans except as expressly set forth in this Agreement.
Notwithstanding the foregoing, Seller shall maintain and operate such Welfare
Benefits in compliance with applicable law including, without limitation, ERISA
and the Code. During the Interim Period such Welfare Benefits shall be provided
to such Transferred Employees, new hires and their respective eligible
dependents through the Seller's existing plans and shall be identical to the
benefits afforded such individuals under Seller's applicable Welfare Benefit
plans immediately prior to the Closing Date, subject to any general amendments
or modifications made by the Seller to such Welfare Benefits. Solely with
respect to the Transferred Employees, Purchaser agrees to pay Seller, or if so
determined by Seller, any administrative representative of Seller, the premium
rates and other direct costs actually payable or incurred under, or
contributions made to, Seller's or the Business Welfare Benefit plans maintained
by Seller under this Section 12.9 for the Transferred Employees plus any
reasonable third party administrative service fees related to such premiums or
direct costs as well as any reasonable and necessary related administrative and
other expenses incurred by Seller for any such continued coverage thereunder.
12.10 EMPLOYMENT AGREEMENTS. Prior to the Closing Date, Seller shall
use its best efforts to cause the termination of all agreements, effective on
the Closing, between any Employee and Seller which permits any such Employee to
return to the employ of Seller within the two (2) year period following the
Closing Date and Seller shall use its best efforts to obtain the consent of any
such Employee to the termination. Purchaser will offer to each of those
Employees the opportunity to enter into employment or severance agreements with
Purchaser, effective as of the Closing Date, on mutually agreeable terms.
ARTICLE XIII
Obligations After Closing
13.1 ACCESS: In connection with any of the Retained Liabilities or any
financial audit of Seller or any Claim, tax audit or other governmental
investigation of Seller for any matter relating to any period prior to the
Closing, or for any other reasonable and lawful purpose, Purchaser shall, upon
request, permit Seller and its representatives to have access, at reasonable
times during normal business hours and in a manner which is not unreasonably
disruptive to the operations of Purchaser, to the Purchased Records and work
papers, books and records of Purchaser relating to the Business. Purchaser shall
maintain in an orderly manner, and shall not dispose of, the Purchased Records
or such work papers, books and records during the six year period beginning with
the Closing without Seller's consent. Following the expiration of such six-year
period, Purchaser may dispose of the Purchased Records or such work papers,
books and records at any time upon giving 90 days prior written notice to
Seller, unless Seller agrees to take possession thereof within such 90 days at
no
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expense to Purchaser.
13.2 ALLOCATION OF TAXES:
(a) All Taxes related to the Business accrued or accruable with respect
to events occurring prior to the Closing Date shall be borne by Seller
except as accrued on the Closing Statement of Net Assets. For this
purpose, the Closing Date shall be treated as the last day of a taxable
period, whether or not the taxable period in fact ends on such period.
All Taxes related to the Business accrued or accruable with respect to
events occurring after the close of business on the Closing Date will
be borne by Purchaser.
(b) Except as accrued on the Closing Statement of Net Assets, the real
and personal property Taxes with respect to any Purchased Assets shall
be prorated based on the ratio of number of days in the pre-Closing
period to the number of days in the actual taxable period with respect
to which Tax is assessed, irrespective of when such Taxes are due,
become a lien or are assessed. Sales and use Taxes shall be deemed to
accrue as property is purchased, sold, used or transferred. All other
Taxes shall accrue in accordance with generally accepted accounting
principles.
(c) Purchaser and Seller shall each pay one-half of all transfer Taxes
(including, without limitation, documentary, stamp gross receipts,
registration, conveyance, excise, records and similar Taxes) arising
out of, in connection with, or attributable to the transactions
contemplated by this Agreement.
13.3 TRANSITION SERVICES: For a reasonable period of time following the
Closing, Seller agrees to provide to Purchaser such support services as may be
required for the transition of the Business to Purchaser. The terms of such
transition services shall be mutually agreed and set forth in a separate
Transition Services Agreement to be executed as of the Closing Date.
13.4 POST-CLOSING PAYMENTS: From and after the Closing Date, Purchaser
shall pay and perform, as and when due, the Assumed Liabilities, and Seller
shall pay and perform, as and when due, all liabilities and obligations relating
to the Business other than Assumed Liabilities, regardless of whether such
obligations or liabilities arise before or after the Closing.
13.5 FURTHER ASSURANCES: From time to time after the Closing, without
further consideration, the parties shall cooperate with each other and shall
execute and deliver instruments of transfer or assignment, or such other
documents to the other party as such other party reasonably may request to
evidence or perfect Purchaser's right, title and interest to the Purchased
Assets, and otherwise carry out the transactions contemplated by this Agreement.
13.6 ORIFICE PASTING MACHINES. Purchaser shall not use the orifice
pasting machines included in the Purchased Assets or acquired pursuant to the
following sentence for the manufacture of starting, lighting or ignition
batteries other than in China, and shall not dispose of such machines except in
connection with a sale of its industrial battery business in which
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the purchaser agrees to be bound by the provisions of this sentence. Seller
shall supply Purchaser from time to time after the Closing with such additional
orifice pasting machines as Purchaser may request for a price equal to the
manufacturer's price plus 10%.
ARTICLE XIV
Notices
All notices, consents, approvals or other notifications required of the
parties under this Agreement shall be in writing and shall be deemed properly
served if delivered personally or sent by registered or certified mail (return
receipt requested), facsimile or nationally- recognized courier or overnight
delivery service addressed to such other party at the address set forth below,
or at such other address as may hereafter be designated by either party in
writing, and shall be deemed delivered (i) five business days after being sent
by mail or (ii) when actually delivered if sent by mail, facsimile, courier or
overnight delivery service (or the next business day if delivered after regular
business hours or on a Saturday, Sunday or holiday).
(a) If to Seller:
Johnson Controls, Inc.
5757 North Green Bay Avenue
Milwaukee, WI 53209
Attention: Vice President and General Counsel
Facsimile # 414-228-2077
(b) If to Purchaser or Parent:
C&D TECHNOLOGIES, INC.
1400 Union Meeting Road
Blue Bell, Pennsylvania 19422
Attention: Chairman
Facsimile # 215-619-7841
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attention: Steven L. Kirshenbaum, Esq.
Facsimile # 212-969-2900
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ARTICLE XV
Further Covenants
15.1 COOPERATION BY PURCHASER: In the event Seller is required to
defend against, or desires to prosecute, any action, suit or proceeding arising
out of a claim pertaining to the business or operations of the Business prior to
the Closing Date, Purchaser shall provide such assistance and cooperation,
including, without limitation, witnesses and documentary or other evidence as
may reasonably be requested by Seller in connection with its defense. Seller
shall reimburse Purchaser for its reasonable out-of-pocket expenses incurred in
providing such assistance and cooperation.
15.2 COOPERATION BY SELLER: In the event Purchaser is required to
defend against, or desires to prosecute, any action, suit or proceeding arising
out of a claim pertaining to a liability assumed or asset acquired by Purchaser
pursuant to this Agreement relating to the business or operations of the
Business, Seller shall provide such assistance and cooperation, including
without limitation, witnesses and documentary or other evidence, as may
reasonably be requested by Purchaser in connection with its defense. Purchaser
shall reimburse Seller for its reasonable out-of-pocket expenses incurred in
providing such assistance.
15.3 COOPERATION ON TAX, ACCOUNTING AND OTHER MATTERS:
(a) Purchaser and Seller agree to furnish or cause to be furnished to
each other, upon request, as promptly as practicable, such information
(including access to books and records) and assistance relating to the
Business as is reasonably necessary for the filing of any Return, for
the preparation for any audit, for the prosecution or defense of any
claim relating to any proposed adjustment with respect to Taxes, for
year-end accounting requirements and any reports or documents to be
filed with any regulatory agency or for any other reasonable purpose.
Neither Purchaser nor Seller shall agree to settle or permit the
settlement of any Tax liability or compromise any claims with respect
to Taxes, which settlement or compromise may materially affect the
liability for Taxes (or right to Tax benefits of the other party,
without such other party's prior consent, which consent shall not be
unreasonably withheld.
(b) Purchaser and Seller agree to retain or cause to be retained all
books and records pertinent to the Business (including the Returns,
documents and records relating to the assets and properties of both)
until the applicable period for assessment under applicable law (giving
effect to any and all properly claimed and valid extensions or waivers)
has expired, and to abide by or cause the compliance with all record
retention agreements entered into with any governmental or taxing
authority.
(c) Purchaser and Seller shall cooperate with each other in the conduct
of any audit or other proceedings involving the Business for any Tax
and shall execute and deliver such powers of attorney and other
documents as are necessary to carry out the intent of this Section
15.3.
(d) Purchaser shall have the right to timely prepare and file, and
cause to
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be timely prepared and filed when due, any Tax return that is required
to include the operations, ownership, assets or activities of the
Purchased Subsidiaries for any period ending on or prior to the Closing
Date to the extent such Tax returns are not filed as of the Closing
Date.
(e) Purchaser and Seller will, upon request, provide the other with all
information that is required to report pursuant to Section 6043 of the
Code and all Treasury Department Regulations promulgated thereunder.
15.4 CONFIDENTIALITY:
(a) Purchaser acknowledges that all information provided to any of it
and its Affiliates, agents and representatives by Seller and its
Affiliates, agents and representatives is subject to the terms of a
confidentiality agreement between or on behalf of Seller and Purchaser
(the "Confidentiality Agreement"), the terms of which are hereby
incorporated herein by reference. Effective upon, and only upon, the
Closing, the Confidentiality Agreement shall terminate; provided,
however, that Purchaser acknowledges that the Confidentiality Agreement
shall terminate only with respect to information provided to any of
Purchaser and its Affiliates, agents or representatives that relates
primarily to the Business or otherwise is used in the ordinary course
of business of the Business; and provided further, however, that
Purchaser acknowledges that any and all information provided or made
available to any of it and its Affiliates, agents and representatives
by or on behalf of the Sellers (other than information relating
primarily to Purchased Assets or the Business) shall remain subject to
the terms and conditions of the Confidentiality Agreement after the
Closing Date.
(b) Purchaser agrees that, after the Closing Date, Purchaser shall, and
shall use all reasonable efforts to cause its directors, officers,
employees, advisors and Affiliates to, keep the Seller Information (as
defined below) confidential following the Closing Date, except that any
such Seller Information required by law or legal or administrative
process to be disclosed may be disclosed without violating the
provisions of this Section 15.4. For purposes of this Agreement, the
term "Seller Information" shall mean all information concerning the
Seller or its Affiliates, including (A) any trade secrets, know-how and
other confidential technical, business and financial information, other
than information that relates primarily to the Business or the
Purchased Assets or otherwise is used in the ordinary course of
business of the Business and other than any such information that is
available to the public on the Closing Date, or thereafter becomes
available to the public other than as a result of a breach of this
Section 15.4(b).
(c) Seller agrees that, after the Closing Date, Seller shall, and shall
use all reasonable efforts to cause its directors, officers, employees,
advisors and Affiliates to, keep the Purchaser Information (as defined
below) confidential following the Closing Date, except that any such
Purchaser Information required by law or legal or administrative
process to be disclosed may be disclosed without violating the
provisions of this Section 15.4. For purposes of this Agreement, the
term "Purchaser Information" shall mean all information concerning the
Business or the Purchaser or its Affiliates, including any trade
secrets, know- how and other confidential technical business and
financial information, other than information that is used in the
ordinary course of business of Seller and other than
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any such information that is available to the public on the Closing
Date, or thereafter becomes available to the public other than as a
result of a breach of this Section 15.4(c).
15.5 COVENANT NOT TO COMPETE:
(a) In consideration of the benefits to Seller hereunder and in order
to induce Purchaser to enter into this Agreement, each Seller hereby
covenants and agrees that for a period of five (5) years after the
Closing Date, Seller shall not, and shall cause its majority owned
Affiliates to not, directly or indirectly, anywhere in the world,
engage in, conduct, manage, operate or control, or participate, in any
manner whatsoever, in the ownership, management, operation or control
of, any business which competes with the Business as it is conducted as
of the Closing Date, except that this non-compete obligation shall not
apply as follows:
(b) The provisions of this Section 15.5 shall not preclude Seller from
acquiring control of an entity which has as a portion of its business
which competes with the Business (the "Competing Business"), but which
primarily is engaged in other lines of business; provided further,
however, that in the event Seller directly or indirectly acquires such
a Competing Business during such period, then whatever entity has
acquired such Competing Business shall (i) limit the competing Business
solely to the production of competing products which the Competing
Business was obligated to produce pursuant to contracts which were
entered into prior to, and not in anticipation of such acquisition, it
being understood and agreed that the Competing Business will not renew
any such contract upon expiration of the term or any extended term in
effect at the time of such acquisition and (ii) discontinue the
Competing Business or dispose of the Competing Business to a
non-affiliated entity within twelve (12) months of the date of such
acquisition. Purchaser shall be offered the right to acquire the
Competing Business prior to the time it is offered to any other person
or entity; if Purchaser declines to acquire the Competing Business,
Seller may then offer it for sale to other persons or entities on terms
that are, in the aggregate, no more favorable to the acquirer of the
Competing Entity than those that were offered to Purchaser.
(c) The provisions of this Section 15.5 shall not preclude Seller from
owning or participating in joint ventures in existence on the date
hereof which continue to operate industrial battery businesses in
India, Latin America or Mexico, in the same fashion as of the date
hereof.
(d) Buyer acknowledges that nothing hereunder precludes Seller's
ability to develop, manufacture or sell batteries, including AGM
batteries, for starting, lighting or ignition.
(e) The parties hereto intend that the covenant contained in this
Section 15.5 shall be deemed a series of separate covenants for each
appropriate jurisdiction. If, in any judicial proceeding, a court shall
refuse to enforce all the separate covenants deemed included in this
Section 15.5 on grounds that, taken together, they cover too extensive
a geographic area, the parties intend that those covenants (taken in
order of the least populous jurisdictions) which, if eliminated would
permit the remaining separate covenants to be enforced in that
proceeding, shall, for the purpose of such proceeding, be deemed
eliminated
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from the provisions of this Section 15.5.
15.6 NON-SOLICITATION OF EMPLOYEES. Neither Seller, nor any of their
respective Affiliates, shall directly or indirectly, for itself or on behalf of
any other person, hire any employee of Purchaser or the Business or Parent, as
the case may be, or any of their respective subsidiaries or induce or attempt to
induce any such employee to leave his or her employment. Neither Purchaser,
Parent nor the Business shall, directly or indirectly, for itself or on behalf
of any other person, hire any employee of Seller's remaining Battery business,
or induce or attempt to induce any such employee to leave his or her employment.
These reciprocal objections shall continue for a period of three years from the
date hereof, except as the parties may otherwise agree. The foregoing shall not
apply to the making of general solicitations for employment (as opposed to the
hiring of individuals recruited through general solicitations), or to employees
who have not been employed by Parent or Seller, or any of their respective
affiliates, as the case may be, for ninety (90) days.
15.7 NON-SOLICITATION OR INTERFERENCE WITH CUSTOMERS AND SUPPLIERS.
Neither Seller nor any of its Affiliates shall, directly or indirectly, for
itself or on behalf of any other person, solicit, divert, take away or attempt
to take away any of Purchaser's customers with respect to the Business or the
patronage of any such customers with respect to the Business or in any way
interfere with, disrupt or attempt to disrupt any then existing relationships
between Purchaser and any of such customers or contact or enter into any
business transaction with any such customers or suppliers or other persons for
any such purpose at any time within five (5) years from the date hereof.
15.8 PRODUCT REPLACEMENT AND REPAIRS. Purchaser will honor all
outstanding warranties and guaranties and other claims for replacements and
repairs, relating to products or services of the Business shipped, sold or
furnished by Seller prior to the Closing Date ("Warranty Claims"). A customer's
rights under Warranty Claims shall be determined by Purchaser pursuant to the
Seller's policies or contractual obligations relating to such customer as of the
Closing Date. The cost of honoring Warranty Claims shall be computed at
Purchaser's then generally prevailing labor rates and prices. Seller shall
reimburse Purchaser, upon invoice, for the cost of all Warranty Claims in excess
of the amount of the reserves specifically included therefor on the Closing
Balance Sheet that are incurred within four years after the Closing Date for the
Telcom product line. Purchaser shall be responsible for the cost of all other
Warranty Claims. Purchaser shall, upon request, provide Seller with reasonable
documentation related to Warranty Claims for which reimbursement is sought
hereunder.
15.9 CERTAIN ACCOUNTS RECEIVABLE. If upon 120 calendar days after the
Closing Date any accounts receivable included in the Purchased Assets remain
uncollected and at least 60 days past due of their respective terms, Purchaser
may assign such accounts receivable to Seller by written notice of such
assignment to Seller specifying the accounts and amounts involved. Seller shall
thereupon pay to Buyer in cash the face amount of such assigned accounts
receivable within 10 calendar days. Both parties shall thereafter continue to
cooperate in Seller's collection of such accounts receivable.
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ARTICLE XVI
Survival of Representations and Warranties
and Indemnification
16.1 SURVIVAL:
None of the representations and warranties in this Agreement and in any
other document delivered in connection herewith shall survive the Closing,
except that the representation contained in Section 8.18 shall survive the
Closing for a period lasting until the first anniversary of the Closing.
Purchaser may not and shall not make any claim against Seller in respect of the
representations and warranties contained in Section 8.1 through and including
Section 8.17 unless such breach was described in the Notice of Breach delivered
by Purchaser to Seller prior to Closing in accordance with the provisions of
Section 7.1 hereof. To the extent any such breach is included in the Notice of
Breach and the parties proceed to Closing notwithstanding their respective
rights under Sections 10.2 and 11.3 hereof, then Seller shall indemnify
Purchaser pursuant to the terms of Section 16.2 below. Nothing contained herein
shall limit Claims with regard to Retained Liabilities or breaches of covenants
or agreements, which shall be independent of Claims with regard to breaches of
representations and warranties.
16.2 INDEMNIFICATION BY SELLER:
(a) From and after the Closing Date, Seller shall defend, indemnify and
hold harmless Purchaser and its directors, shareholders, officers,
employees, agents, consultants, representatives, Affiliates, successors
and assigns from and against any and all loss, liability, damage or
expense (including reasonable legal fees and expenses collectively
"Losses"), which any of them incurs as a result of (i) a breach of any
representation or warranty contained in Section 8.1 to and including
Section 8.17 (without regard to materiality or Material Adverse Effect
qualifications contained therein), provided such breach was included in
the Notice of Breach delivered by Purchaser to Seller prior to Closing
in accordance with the provisions of Section 7.1 hereof; (ii) a breach
of the representation and warranty contained in Section 8.18; provided,
that Purchaser was not aware of such breach and failed to give Seller
timely notice thereof; (iii) any Retained Liabilities; and (iv) any
breach of any covenant or agreement contained herein or in any other
document executed and delivered at the Closing.
(b) The amount of any Losses incurred by Purchaser shall be reduced as
follows:
(i) by the net amount Purchaser recovers (after deducting all
attorneys' fees, expenses and other costs of recovery), from
any insurer or other third party liable for such Losses; and
(ii) where and to the extent the issue giving rise to any such
Losses was specifically reserved for in the Closing Statement
of Net Assets or gave rise to the payment of a post-closing
adjustment amount as described in Section 4.4.
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(c) Purchaser shall be entitled to indemnification under Section 16.2
(a)(i) only to the extent that the aggregate amount of such Losses
(adjusted as provided in paragraph (b) of this Section 16.2) exceeds a
deductible amount of $1.5 million (the "Indemnification Deductible"),
in which event the Losses shall be the amount, if any, which exceeds
the Indemnification Deductible, provided the aggregate amount payable
in respect of indemnification under Section 16.2 (a)(i) shall not
exceed the Walkaway Amount.
(d) The indemnity provided in this Section 16.2 shall be the sole and
exclusive remedy of Purchaser after the Closing Date with respect to
any and all claims relating to the subject matter of this Agreement
other than for fraud. In furtherance of the foregoing, Purchaser hereby
waives, from and after the Closing, to the fullest extent permitted
under applicable law, any and all rights, claims and causes of action
it may have against Seller relating to the subject matter of this
Agreement arising under or based upon any federal, state, local or
foreign statute law, ordinance, rule or regulation or otherwise except
as otherwise provided under this Section 16.2 and for fraud.
16.3 INDEMNIFICATION BY PURCHASER: Purchaser shall indemnify and hold
harmless Seller and its directors, shareholders, officers, employees,
agents, consultants, representatives, Affiliates, successors and
assigns from and against any and all Losses which any of them may incur
arising out of any Assumed Liabilities.
16.4 INDEMNIFICATION PROCEDURE:
(a) Any party seeking indemnification hereunder (the "Indemnitee")
shall notify the parties liable for such indemnification (each an
"Indemnitor") in writing of any event, omission or occurrence which the
Indemnitee has determined has given or could give rise to Losses which
are indemnifiable hereunder (such written notice being hereinafter
referred to as a "Notice of Claim"). In all cases, such notice shall be
given promptly, in accordance with the relevant provisions of the
Agreement regarding notice; provided, that the failure of any
Indemnitee to give notice as provided in this Section 16. 4 shall not
relieve the Indemnitor of its obligations under this Article XVI unless
such failure shall materially adversely affects the Indemnitor. A
Notice of Claim shall specify in reasonable detail the nature and any
particulars of the event, omission or occurrence giving rise to a right
of indemnification. The Indemnitor shall satisfy its obligations
hereunder, as the case may be, within 30 days of its receipt of a
Notice of Claim; provided, however, that so long as the Indemnitor is
in good faith defending a claim pursuant to Section 16.4(b) below, its
obligation to indemnify the Indemnitee with respect thereto shall be
suspended. To the extent the parties disagree as to whether any Losses
are indemnifiable hereunder, such matters shall be resolved pursuant to
Section 17.11 hereunder; provided, that during the pendency of any such
dispute, the party seeking indemnification may defend the Loss for
which indemnification is sought, and if it is determined that the Loss
is one that is subject to indemnification, the Indemnitor shall be
bound by all actions taken by the party seeking indemnification during
the pendency of such dispute.
(b) With respect to any third party claim, demand, suit, action or
proceeding which is the subject of a Notice of Claim, the Indemnitor
shall, in good faith and
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at its own expense, defend, contest or otherwise protect against any
such claim, demand, suit, action or proceeding with legal counsel of
its own selection. The Indemnitee shall have the right, but not the
obligation, to participate in the defense thereof through counsel of
its own choice and shall have the right, but not the obligation, to
assert any and all cross claims or counterclaims it may have; provided,
that the fees and expenses of counsel to Indemnitee shall be at the
Indemnitee's own expense unless (a) the employment of such counsel and
the payment of such fees and expenses both shall have been specifically
authorized by the Indemnitor in connection with the defense of such
claim, demand, suit, action or proceeding, or (b) the Indemnitee shall
have reasonably concluded and specifically notified the Indemnitor that
there may be specific defenses available to it which are different from
or additional to those available to the Indemnitor, or that such
action, suit or proceeding involves or could have an effect upon
matters beyond the scope of the indemnity agreements contained herein
(in which case the Indemnitor, to the extent made necessary by such
different or additional defense or other effects, shall not have the
right to direct the defense of such claim, demand, suit, action or
proceeding on behalf of the Indemnitee). So long as the Indemnitor is
defending in good faith any such third party claim, demand, suit,
action or proceeding, the Indemnitee shall at all times cooperate, the
expense of the Indemnitor, in all reasonable ways with, make its
relevant files and records available for inspection and copying by, and
make its employees available or otherwise render reasonable assistance
to, the Indemnitor. In the event that the Indemnitor fails to timely
defend, contest or otherwise protect against any such third party
claim, demand, suit, action or proceeding, the Indemnitee shall have
the right, but not the obligation, for the account of the Indemnitor to
defend, contest, assert cross claims or counterclaims, or otherwise
protect against, the same and may make any compromise or settlement
thereof. The Indemnitor shall make no settlement without Indemnitee's
consent of any claims which Indemnitor has undertaken to defend, unless
(i) the Indemnitor fully indemnifies the Indemnitee for all Losses;
(ii) the Indemnitee receives an unconditional release with respect to
the facts underlying the claim; (iii) there is no finding or admission
of violation of law by, or effect on any other claims that may be made
against, the Indemnitee; and (iv) the relief granted in connection
therewith requires no action or inaction on the part of and has no
other material effect on the Indemnitee.
ARTICLE XVII
Miscellaneous
17.1 BROKER COMPENSATION: Each of the parties hereto agrees to
indemnify the other against and hold the other harmless from any and all
liabilities (including, without limitation, cost of counsel fees in defending
against such liabilities) for brokerage commissions or finder's fees in
connection with the transactions contemplated by this Agreement, insofar as such
claims shall be based on arrangements or agreements made or claimed to have been
made by or on behalf of Seller or Purchaser, respectively. Seller shall pay the
fee of Salomon Smith Barney Inc. for its services in connection with the
transactions contemplated by this Agreement.
17.2 BULK SALES ACT: Purchaser waives compliance by Seller with any
bulk sales law which may be applicable to the transactions contemplated by this
Agreement; provided, however that Seller agrees to indemnify Purchaser and hold
it harmless from any loss, damage,
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liability, and expenses (including reasonable legal fees) resulting from such
noncompliance.
17.3 EXPENSES: Each of the parties hereto shall pay its own expenses in
connection with the negotiation and preparation of this Agreement and the
Related Documents; provided, that Seller shall pay all expenses of the Business
in connection with the transactions contemplated hereby.
17.4 BINDING AGREEMENT: This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, provided that neither party shall assign this Agreement without the
prior written consent of the other party hereto, and in no event will any
assignment relieve the assigning party of its obligations hereunder.
17.5 ENTIRE AGREEMENT: This Agreement (including the Exhibits and
Schedules hereto) (a) constitutes the entire agreement between the parties
hereto with respect to the purchase and sale of the Purchased Assets and the
other transactions contemplated hereby, (b) supersedes all prior negotiations
and oral or written understandings, if any, and (c) may not be amended or
supplemented except by an instrument in writing signed by both parties hereto.
Neither party makes any representation or warranty except as provided herein.
Waiver by any party of any breach of or failure to comply with any provision of
this Agreement by the other party shall not be construed as, or constitute, a
continuing waiver of such provision, or a waiver of any other breach of, or
failure to comply with, any other provision of this Agreement. No waiver of any
such breach or failure or of any term or condition of this Agreement shall be
effective unless in a written notice signed by the waiving party and delivered,
in the manner required for notices generally, to each affected party.
17.6 GOVERNING LAW: This Agreement shall be governed by and construed
in accordance with the substantive laws of the State of Wisconsin.
17.7 NO RIGHTS OF THIRD PARTIES: Nothing in this Agreement is intended
to confer any right on any person other than the parties to it and their
respective successors and assigns; nor is anything in this Agreement intended to
modify or discharge the obligation or liability of any third person to any party
to this Agreement, nor shall any provision give any third person any right of
subrogation or action over against any party to this Agreement. Without limiting
the generality of the foregoing, no employee (whether former, current or future)
of either Purchaser, Seller or any Purchased Subsidiary (or any beneficiary
thereof) shall be treated as a third party beneficiary or have any rights or
interests hereunder.
17.8 COUNTERPARTS: This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
17.9 HEADINGS; Table of Contents: The headings of the sections of this
Agreement and the table of contents at the forepart of this Agreement are
inserted for convenience only and shall not constitute a part hereof nor affect
the rights of the parties hereto.
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17.10 Termination:
(a) TERMINATION EVENTS. Anything contained herein to the contrary
notwithstanding, this Agreement may be terminated and the transactions
contemplated hereby abandoned under any of the following circumstances.
(i) by the mutual written consent of Seller and Purchaser at
any time prior to the Closing Date;
(ii) by Seller if any of the conditions set forth in Article
XI shall have become incapable of fulfillment at any time or
are not fulfilled at Closing, and shall not have been waived
by Seller;
(iii) by Purchaser if any of the conditions set forth in
Article X shall have become incapable of fulfillment at any
time or are not fulfilled at Closing, and shall not have been
waived by Purchaser;
(iv) by either party at any time prior to the Closing Date, if
Purchaser has, in good faith, sent a Notice of Breach to
Seller informing Seller of (a) breaches of representations and
warranties under Section 8.1-8.17 which total, in the
aggregate, more than the Walkaway Amount, and the parties,
after good faith discussions, are unable to reach a mutually
agreeable resolution, or (b) breach of the representation and
warranty contained in Section 8.18; or
(v) by either party if the Closing has not occurred by the
close of business on May 1, 1999.
(b) NOTICE OF TERMINATION. In the event of termination of this
Agreement by Seller or Purchaser pursuant to this Section 17.10,
written notice thereof shall be given to the other party and the
transactions contemplated by this Agreement shall be abandoned, without
further action by any party. If the transactions contemplated by this
Agreement are abandoned as provided herein:
(i) Purchaser shall return all documents and copies and other
materials received from or on behalf of Seller relating to the
transactions contemplated hereby, whether so obtained before
or after the execution hereof, to the Seller;
(ii) all confidential information received by Purchaser with
respect to the Business shall be treated in accordance with
the Confidentiality Agreement, which shall remain in full
force and effect notwithstanding the termination of this
Agreement; and
(iii) this Agreement shall become void and of no further force
and effect, except for the provisions of (i) Section 15.4
relating to the obligations of each of Purchaser and Seller to
keep confidential certain information and data obtained by it,
(ii) Section 7.5 relating to publicity, (iii) Section 17.3
relating to certain expenses, (iv)
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Section 17.1 relating to broker's or finder's fees, and (v)
this Section 17.10. Nothing in this Section 17.10 shall be
deemed to release any party from any liability for any breach
by such of the terms and provisions of this Agreement, to
impair the right of any party to compel specific performance
by another party or its or their obligations under this
Agreement, or to waive any rights of any party under law not
otherwise waived in this Agreement.
17.11 DISPUTE RESOLUTION.
(a) NEGOTIATION. In the event of any dispute or disagreement between
Seller and Purchaser as to the interpretation of any provision of this
Agreement, the performance of obligations hereunder, or any other
disputed matter, such matter, upon written request of either party,
shall be referred to representatives of the parties for decision, each
party being represented by a senior executive officer who has no direct
operational responsibility for the matters contemplated by this
Agreement (the "Representatives"). The Representatives shall promptly
meet in a good faith effort to resolve the dispute. If the
Representatives do not agree upon a decision within thirty (30)
calendar days after reference of the matter to them, either Purchaser
or Seller shall be free to exercise all remedies otherwise available to
them.
(b) JURISDICTION. Each of the parties agrees that any dispute,
controversy or claim arising out of or in connection with this
Agreement or any alleged breach hereof shall be referred to the
Delaware Business Court pursuant to its rules and procedures. Either
party may bring an action in such Court and the other party shall
hereby be deemed to have consented to personal jurisdiction within the
State of Delaware for such purpose and the jurisdiction of such Court
and its rules, and hereby waives any defense to any such action based
on the doctrine of forum non conveniens.
17.12 REPRESENTATION BY COUNSEL; INTERPRETATION. The Seller and
Purchaser acknowledge that each of them has been represented by counsel in
connection with this Agreement and the transactions contemplated hereby.
Accordingly, any rule of law or any legal decision that would require
interpretation of any claimed ambiguities in this Agreement against the party
that drafted it has no application and is expressly waived.
17.13 KNOWLEDGE OF SELLER. The term "Knowledge" as used with respect to
Seller in this Agreement means the actual knowledge after due inquiry of
Seller's management employees who shall be defined as those employees listed on
Schedule 17.13.
17.14 DOLLAR AMOUNTS. All dollar amounts referred to in this Agreement
are in United States Dollars.
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17.15 PASSAGE OF TITLE AND RISK OF LOSS. Legal title,
equitable title and risk of loss with respect to the Purchased Assets will not
pass to Purchaser until the Purchased Assets are transferred at Closing.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written
JOHNSON CONTROLS, INC.
BY /s/ Keith Wandell
-----------------
Title: President - JCI GI
C&D TECHNOLOGIES, INC.
BY /s/ A. Weber
-----------------
Title: Chairman & CEO
C&D ACQUISITION CORP.
BY /s/ A. Weber
------------------
Title: Chairman & CEO
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CREDIT AGREEMENT
Dated as of March 1, 1999
among
C&D TECHNOLOGIES, INC.,
as Borrower,
Certain Subsidiaries and Affiliates,
as Guarantors,
THE LENDERS NAMED HEREIN
AND
NATIONSBANK, N.A.,
as Administrative Agent
<PAGE>
TABLE OF CONTENTS
SECTION 1 DEFINITIONS........................................................1
1.1 Definitions.....................................................1
1.2 Computation of Time Periods....................................23
1.3 Accounting Terms...............................................24
SECTION 2 CREDIT FACILITIES.................................................24
2.1 Revolving Loans................................................24
2.2 Letter of Credit Subfacility...................................29
2.3 Swingline Loan Subfacility.....................................35
2.4 Term Loan......................................................37
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES....................39
3.1 Default Rate...................................................39
3.2 Extension and Conversion.......................................39
3.3 Prepayments....................................................40
3.4 Reduction of Commitments and Termination of Commitments........41
3.5 Fees...........................................................42
3.6 Capital Adequacy...............................................43
3.7 Inability To Determine Interest Rate...........................43
3.8 Illegality.....................................................44
3.9 Requirements of Law............................................44
3.10 Taxes.........................................................45
3.11 Indemnity.....................................................48
3.12 Pro Rata Treatment............................................48
3.13 Sharing of Payments...........................................49
3.14 Payments, Computations, Etc...................................50
3.15 Evidence of Debt..............................................52
SECTION 4 GUARANTY..........................................................53
4.1 The Guarantee..................................................53
4.2 Obligations Unconditional......................................53
4.3 Reinstatement..................................................55
4.4 Certain Additional Waivers.....................................55
4.5 Remedies.......................................................55
4.6 Rights of Contribution.........................................56
4.7 Continuing Guarantee...........................................56
SECTION 5 CONDITIONS........................................................57
5.1 Conditions to Closing..........................................57
5.2 Conditions to All Extensions of Credit.........................59
SECTION 6 REPRESENTATIONS AND WARRANTIES....................................61
6.1 Financial Condition............................................61
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6.2 No Changes or Restricted Payments..............................61
6.3 Organization; Existence; Compliance with Law...................61
6.4 Power; Authorization; Enforceable Obligations..................62
6.5 No Legal Bar...................................................62
6.6 No Material Litigation.........................................63
6.7 No Default.....................................................63
6.8 Ownership of Property; Liens...................................63
6.9 Intellectual Property..........................................63
6.10 No Burdensome Restrictions....................................64
6.11 Taxes.........................................................64
6.12 ERISA.........................................................64
6.13 Governmental Regulations, Etc.................................65
6.14 Subsidiaries..................................................66
6.15 Purpose of Extensions of Credit...............................66
6.16 Environmental Matters.........................................66
6.18 Employee Relations............................................68
SECTION 7 AFFIRMATIVE COVENANTS.............................................68
7.1 Financial Statements...........................................68
7.2 Certificates; Other Information................................70
7.3 Notices........................................................71
7.4 Payment of Obligations.........................................72
7.5 Conduct of Business and Maintenance of Existence...............72
7.6 Maintenance of Property; Insurance.............................73
7.7 Inspection of Property; Books and Records; Discussions.........73
7.8 Environmental Laws.............................................73
7.9 Financial Covenants............................................74
7.10 Administrative Fees...........................................75
7.11 Additional Guaranties and Stock Pledges.......................75
7.12 Ownership of Subsidiaries.....................................76
7.13 Use of Proceeds...............................................76
SECTION 8 NEGATIVE COVENANTS................................................76
8.1 Indebtedness...................................................76
8.2 Liens..........................................................78
8.3 Consolidation, Merger, Sale or Purchase of Assets, etc.........78
8.4 Advances, Investments and Loans................................80
8.5 Transactions with Affiliates...................................80
8.6 Ownership of Equity Interests..................................80
8.7 Fiscal Year....................................................80
8.8 Prepayments of Indebtedness, etc...............................80
8.9 Restricted Payments............................................81
8.10 Sale Leasebacks...............................................81
8.11 Limitations on Restricted Actions.............................81
8.12 No Further Negative Pledges...................................81
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SECTION 9 EVENTS OF DEFAULT.................................................82
9.1 Events of Default..............................................82
9.2 Acceleration; Remedies.........................................84
SECTION 10 AGENCY PROVISIONS................................................85
10.1 Appointment...................................................85
10.2 Delegation of Duties..........................................86
10.3 Exculpatory Provisions........................................86
10.4 Reliance on Communications....................................87
10.5 Notice of Default.............................................87
10.6 Non-Reliance on Administrative Agent and Other Lenders........88
10.7 Indemnification...............................................88
10.8 Administrative Agent in its Individual Capacity...............89
10.9 Successor Administrative Agent................................89
SECTION 11 MISCELLANEOUS....................................................90
11.1 Notices.......................................................90
11.2 Right of Set-Off..............................................91
11.3 Benefit of Agreement..........................................92
11.4 No Waiver; Remedies Cumulative................................94
11.5 Payment of Expenses, etc......................................95
11.6 Amendments, Waivers and Consents..............................95
11.7 Counterparts..................................................97
11.8 Headings......................................................97
11.9 Survival......................................................97
11.10 Governing Law; Submission to Jurisdiction; Venue.............98
11.11 Severability.................................................98
11.12 Entirety.....................................................99
11.13 Binding Effect; Termination..................................99
11.14 Confidentiality..............................................99
11.15 Source of Funds.............................................100
11.16 Conflict....................................................100
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SCHEDULES
Schedule 2.1(a) Lenders and Commitments
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(b)-1 Existing Letters of Credit
Schedule 2.2(b)-2 Form of Notice of Request for Letter of Credit
Schedule 2.4(d) Form of Term Note
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 5.1(g)(v) Form of Officer's Certificate
Schedule 6.6 Description of Legal Proceedings
Schedule 6.8 Existing Liens
Schedule 6.14 Subsidiaries
Schedule 7.2(b) Form of Officer's Compliance Certificate
Schedule 7.11 Form of Joinder Agreement
Schedule 8.1 Indebtedness
Schedule 8.4 Existing Investments
Schedule 11.1 Lenders and Addresses
Schedule 11.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of March 1, 1999 (as amended and
modified from time to time, the "Credit Agreement"), is by and among C&D
TECHNOLOGIES, INC., a Delaware corporation (the "Borrower"), the subsidiaries
and affiliates of the Borrower identified on the signature pages hereto and such
other subsidiaries and affiliates of the Borrower as may from time to time
become Guarantors hereunder in accordance with the provisions hereof (the
"Guarantors"), the lenders named herein and such other lenders as may become a
party hereto (the "Lenders"), and NATIONSBANK, N.A., as Administrative Agent (in
such capacity, the "Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a $220
million credit facility for the purposes hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall
have the meanings specified below unless the context otherwise requires:
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement.
"Administrative Agent" shall have the meaning assigned to such
term in the heading hereof, together with any successors or assigns.
"Administrative Agent's Fee Letter" means that certain letter
agreement, dated as of November 6, 1998, between the Administrative
Agent and the Borrower, as amended, modified, supplemented or replaced
from time to time.
"Administrative Agent's Fees" shall have the meaning assigned
to such term in Section 3.5(c).
<PAGE>
"Affiliate" means (a) with respect to any Credit Party, any
other Person (i) directly or indirectly controlling or controlled by or
under direct or indirect common control with such Person or (ii)
directly or indirectly owning or holding ten percent (10%) or more of
the equity interest in such Person, and (b) with respect to any Lender,
any other Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such Person. For purposes
of this definition, "control" when used with respect to any Person
means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agency Services Address" means NationsBank, N.A.,
NC1-001-15-04, 101 North Tryon Street, Charlotte, North Carolina 28255,
Attn: Agency Services, or such other address as may be identified by
written notice from the Administrative Agent to the Borrower.
"Aggregate Revolving Committed Amount" means the aggregate
amount of Revolving Commitments in effect from time to time, being
initially ONE HUNDRED TWENTY MILLION DOLLARS ($120,000,000).
"Applicable Percentage" means for any day, the rate per annum
set forth below opposite the applicable Consolidated Leverage Ratio
then in effect, it being understood that the Applicable Percentage for
(i) Base Rate Loans shall be the percentage set forth under the column
"Base Rate Margin", (ii) Eurodollar Loans shall be the percentage set
forth under the column "Eurodollar Margin and Letter of Credit Fee",
(iii) the Letter of Credit Fee shall be the percentage set forth under
the column "Eurodollar Margin and Letter of Credit Fee" and (iv) the
Unused Fee shall be the percentage set forth under the column "Unused
Fee":
Eurodollar
Margin
Consolidated and
Pricing Leverage Base Rate Letter of Unused
Level Ratio Margin Credit Fee Fee
------- ------------ --------- ----------- ------
I < 1.5 0% 1.00% 0.20%
II > 1.5 but < 2.0 0% 1.25% 0.25%
-
III > 2.0 but < 2.5 0% 1.50% 0.30%
-
IV > 2.5 0.25% 1.75% 0.375%
-
The Applicable Percentage shall be determined and adjusted quarterly on
the date (each a "Rate Determination Date") five (5) Business Days
after the date by which the annual and quarterly compliance
certificates and related financial statements and information are
required in accordance with the provisions of Sections 7.1(a) and (b)
and Section 7.2(b), as appropriate; provided that:
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(i) until the Rate Determination Date occurring after
delivery of the annual audited financial statements for the
fiscal year ending January 31, 1999, the Applicable
Percentages shall be set at Pricing Level III, or any higher
(more expensive) Pricing Level as would otherwise apply based
on the most recent financial statements delivered by the
Borrower, and
(ii) in the event an annual or quarterly compliance
certificate and related financial statements and information
are not delivered timely to the Agency Services Address by the
date required by Sections 7.1(a) and (b) and Section 7.2(b),
as appropriate, the Applicable Percentages shall be based on
Pricing Level IV until the date five (5) Business Days after
the date by which an appropriate compliance certificate and
related financial statements and information are delivered, on
which date the applicable Pricing Level shall be adjusted
based on the information contained in such compliance
certificate and related financial statements and information.
Each Applicable Percentage shall be effective from a Rate Determination
Date (or later date specified in clause (ii) above) until the next such
Rate Determination Date. The Administrative Agent shall determine the
appropriate Applicable Percentages in the pricing matrix promptly upon
receipt of the quarterly or annual compliance certificate and related
financial information and shall promptly notify the Borrower and the
Lenders of any change thereof. Such determinations by the
Administrative Agent shall be conclusive absent manifest error.
Adjustments in the Applicable Percentages shall be effective as to
existing Extensions of Credit as well as new Extensions of Credit made
thereafter.
"Asset Disposition" means (i) the sale, lease or other
disposition of any property or asset by any member of the Consolidated
Group, other than any such sale permitted by Section 8.3(b) and (ii)
receipt by any member of the Consolidated Group of any cash insurance
proceeds or condemnation award payable by reason of theft, loss,
physical destruction or damage, taking or similar event with respect to
any of their property or assets.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the
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appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of such Person or for any
substantial part of its Property or for the winding up or liquidation
of its affairs, and such involuntary case or other case, proceeding or
other action shall remain undismissed, undischarged or unbonded for a
period of sixty (60) consecutive days; or (iii) such Person shall
commence a voluntary case under any applicable bankruptcy, insolvency
or other similar law now or hereafter in effect, or consent to the
entry of an order for relief in an involuntary case under any such law,
or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
make any general assignment for the benefit of creditors; or (iv) such
Person shall be unable to, or shall admit in writing its inability to,
pay its debts generally as they become due.
"Base Rate" means, for any day, a rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If for
any reason the Administrative Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is
unable after due inquiry to ascertain the Federal Funds Rate for any
reason, including the inability or failure of the Administrative Agent
to obtain sufficient quotations in accordance with the terms hereof,
the Base Rate shall be determined without regard to clause (a) of the
first sentence of this definition until the circumstances giving rise
to such inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means C&D Technologies, Inc., a Delaware
corporation, as referenced in the opening paragraph, its successors and
permitted assigns.
"Business Day" means a day other than a Saturday, Sunday or
other day on which commercial banks in Charlotte, North Carolina or New
York, New York are authorized or required by law to close, except that,
when used in connection with a Eurodollar Loan, such day shall also be
a day on which dealings between banks are carried on in Dollar deposits
in London, England.
"Capital Expenditures" means, for any period, without
duplication, all expenditures (whether paid in cash or other
consideration) during such period that, in accordance with GAAP, are or
should be included in additions to property, plant and equipment or
similar items reflected in a consolidated statement of cash flows for
such period; provided, that Capital Expenditures shall not include, for
purposes hereof, expenditures of proceeds of insurance settlements,
condemnation awards and other settlements in respect of lost,
destroyed, damaged or condemned assets, equipment or other property to
the extent such expenditures are made to replace or repair such lost,
destroyed, damaged or condemned assets, equipment or other property or
otherwise to
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acquire assets or properties useful in the business of the members of
the Consolidated Group.
"Capital Lease" means, as applied to any Person, any lease of
any Property by that Person as lessee which, in accordance with GAAP,
is or should be accounted for as a capital lease on a balance sheet of
that Person.
"Capital Lease Obligations" means the capital lease
obligations relating to a Capital Lease determined in accordance with
GAAP.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) Dollar denominated time deposits and certificates of
deposit of (i) any Lender, or (ii) any domestic commercial bank of
recognized standing (y) having capital and surplus in excess of
$500,000,000 and (z) whose short-term commercial paper rating from S&P
is at least A-1 or the equivalent thereof or from Moody's is at least
P-1 or the equivalent thereof (any such bank being an "Approved Bank"),
in each case with maturities of not more than 270 days from the date of
acquisition, (c) demand deposits, time deposits and certificates of
deposit, with a Dollar equivalent not in excess of $15,000,000 in the
aggregate, denominated in any of the British Pound, German Mark,
Italian Lira, Spanish Peseta, Euro, Irish Punt, Dutch Guilder, Swiss
Franc, French Franc, Canadian Dollar, Mexican Peso, Chinese Renminbi,
Malaysian Ringgit, Australian Dollar, Singapore Dollar or Brazilian
Real of any commercial bank of recognized standing reasonably
acceptable to the Administrative Agent, (d) commercial paper and
variable or fixed rate notes issued by any Approved Bank (or by the
parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better
by Moody's and maturing within six months of the date of acquisition,
(e) repurchase agreements entered into by a Person with a bank or trust
company (including any of the Lenders) or recognized securities dealer
having capital and surplus in excess of $500,000,000 for direct
obligations issued by or fully guaranteed by the United States of
America in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date
of purchase thereof, a fair market value of at least 100% of the amount
of the repurchase obligations, (f) obligations of any State of the
United States or any political subdivision thereof, the interest with
respect to which is exempt from federal income taxation under Section
103 of the Internal Revenue Code, having a long term rating of at least
AA- or Aa-3 by S&P or Moody's, respectively, and maturing within three
years from the date of acquisition thereof, (g) Investments in
municipal auction preferred stock (i) rated AAA (or the equivalent
thereof) or better by S&P or Aaa (or the equivalent thereof) or better
by Moody's and (ii) with dividends that reset at least once every 365
days and (h) Investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by
reputable financial
5
<PAGE>
institutions having capital of at least $100,000,000 and the portfolios
of which are limited to Investments of the character described in the
foregoing subdivisions (a) through (g).
"Change of Control" means the occurrence of any of the
following events: (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership, directly or
indirectly, of, or shall have acquired by contract or otherwise, or
shall have entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of or control
over, Voting Stock of the Borrower (or other securities convertible
into such Voting Stock) representing 40% or more of the combined voting
power of all Voting Stock of the Borrower, or (ii) during any period of
up to 24 consecutive months, commencing after the Closing Date,
individuals who at the beginning of such 24 month period were directors
of the Borrower (together with any new director whose election by the
Borrower's Board of Directors or whose nomination for election by the
Borrower's shareholders was approved by a vote of at least two-thirds
of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination for election
was previously so approved) cease for any reason to constitute a
majority of the directors of the Borrower then in office. As used
herein, "beneficial ownership" shall have the meaning provided in Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended.
"Closing Date" means the date hereof.
"Commitment" means the Revolving Commitment, the LOC
Commitment, the Swingline Commitment and the Term Loan Commitment.
"Commitment Percentage" means the Revolving Commitment
Percentage or the Term Loan Commitment Percentage, as appropriate.
"Commitment Period" means the period from and including the
Closing Date to but not including the earlier of (i) the Termination
Date, or (ii) the date on which the Commitments terminate in accordance
with the provisions of this Credit Agreement.
"Consolidated Adjusted EBITDA" means, for any period for the
Consolidated Group, the sum of Consolidated EBITDA MINUS Capital
Expenditures MINUS cash taxes paid during the applicable period, in
each case on a consolidated basis determined in accordance with GAAP
applied on an consistent basis. For purposes hereof, the applicable
period shall be the four consecutive fiscal quarters ending as of the
date of determination.
"Consolidated EBITDA" means, for any period for the
Consolidated Group, the sum of Consolidated Net Income PLUS
Consolidated Interest Expense PLUS all provisions for federal, state or
other domestic and foreign income taxes for the applicable period PLUS
depreciation and amortization for the applicable period, in each case
on a consolidated basis determined in accordance with GAAP applied on a
consistent basis. For purposes
6
<PAGE>
hereof, the applicable period shall be the four consecutive fiscal
quarters ending as of the date of determination.
"Consolidated Fixed Charge Coverage Ratio" means, for any
period, the ratio of Consolidated Adjusted EBITDA to Consolidated Fixed
Charges.
"Consolidated Fixed Charges" means, for any period for the
Consolidated Group, the sum of the cash portion of Consolidated
Interest Expense paid during the four consecutive fiscal quarters
ending as of the date of determination PLUS scheduled maturities of
Funded Debt (including, for purposes hereof, mandatory commitment
reductions, sinking fund payments and the like relating thereto, but
excluding for purposes hereof Funded Debt of Shanghai permitted to be
incurred under Section 8.1(h)) paid during the four consecutive fiscal
quarters ending as of the date of determination plus Restricted
Payments made during the four consecutive fiscal quarters ending as of
the date of determination, in each case on a consolidated basis
determined in accordance with GAAP applied on an consistent basis.
"Consolidated Funded Debt" means Funded Debt of the
Consolidated Group determined on a consolidated basis in accordance
with GAAP applied on a consistent basis.
"Consolidated Group" means the Borrower and its consolidated
subsidiaries, as determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period for the
Consolidated Group, all interest expense, including the amortization of
debt discount and premium, the interest component under Capital Leases
and the implied interest component under securitization transactions,
in each case on a consolidated basis determined in accordance with GAAP
applied on a consolidated basis. For purposes hereof, the applicable
period shall be the four consecutive fiscal quarters ending as of the
date of determination.
"Consolidated Leverage Ratio" means, as of the last day of any
fiscal quarter, the ratio of Consolidated Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal quarters
ending as of such day.
"Consolidated Net Income" means, for any period for the
Consolidated Group, net income on a consolidated basis determined in
accordance with GAAP applied on a consistent basis, but excluding for
purposes of determining the Consolidated Leverage Ratio and
Consolidated Fixed Charge Coverage Ratio, any extraordinary gains or
losses (and related tax effects thereon) other than any extraordinary
loss related to the write-down of goodwill. For purposes hereof, the
applicable period shall be the four consecutive fiscal quarters ending
as of the date of determination.
"Consolidated Net Worth" means, as of any date for the
Consolidated Group, shareholders' equity or net worth as determined in
accordance with GAAP.
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"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any material
agreement, instrument or undertaking to which such Person is a party or
by which it or any of its property is bound.
"Credit Documents" means, collectively, this Credit Agreement,
the Notes, the LOC Documents, the Pledge Agreement, each Joinder
Agreement, the Administrative Agent's Fee Letter, and all other related
agreements and documents issued or delivered hereunder or thereunder or
pursuant hereto or thereto.
"Credit Party" means any of the Borrower and the Guarantors.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that, at
such time, (i) has failed to make an Extension of Credit required
pursuant to the terms of this Credit Agreement, (ii) has failed to pay
to the Administrative Agent or any Lender an amount owed by such Lender
pursuant to the terms of this Credit Agreement or any other of the
Credit Documents, or (iii) has been deemed insolvent or has become
subject to a bankruptcy or insolvency proceeding or to a receiver,
trustee or similar proceeding.
"Dollars" and "$" mean lawful currency of the United States of
America.
"Domestic Credit Party" means any Credit Party which is
incorporated or organized under the laws of any State of the United
States or the District of Columbia.
"Domestic Subsidiary" means any Subsidiary which is
incorporated or organized under the laws of any State of the United
States or the District of Columbia.
"Environmental Laws" means any and all applicable Federal,
state, local and foreign statutes, laws, regulations, ordinances,
rules, judgments, orders, decrees, permits, written agreements or other
written governmental restrictions relating to the pollution or
protection of the environment or to emissions, discharges, releases or
threatened releases of Materials of Environmental Concern into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of Materials of Environmental Concern.
"Equity Transaction" means, with respect to any member of the
Consolidated Group, any issuance of shares of its capital stock or
other equity interest, other than an issuance (i) to a member of the
Consolidated Group or (ii) in connection with exercise by a present or
former employee, officer, director or consultant under a stock
incentive plan, stock option plan or other equity-based compensation
plan or arrangement.
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<PAGE>
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Credit Party within the meaning of Section 4001(a)(14)
of ERISA, or is a member of a group which includes the Borrower and
which is treated as a single employer under Section 414(b) or (c) of
the Internal Revenue Code.
"ERISA Event" means (i) with respect to any Single Employer
Plan, the occurrence of a Reportable Event or the substantial cessation
of operations (within the meaning of Section 4062(e) of ERISA); (ii)
the withdrawal by the Borrower, any Subsidiary of the Borrower or any
ERISA Affiliate from a Multiple Employer Plan during a plan year in
which it was a substantial employer (as such term is defined in Section
4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Single Employer Plan pursuant to Section 4041(a)(2) or
4041A of ERISA; (iv) the institution of proceedings to terminate or the
actual termination of a Single Employer Plan by the PBGC under Section
4042 of ERISA; (v) any event or condition which would reasonably be
expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any
Single Employer Plan; (vi) the complete or partial withdrawal of the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate from a
Multiemployer Plan; (vii) the conditions for imposition of a lien under
Section 302(f)(1)(A) and (B) of ERISA exist with respect to any Single
Employer Plan; or (viii) the adoption of an amendment to any Plan
requiring the provision of security to such Single Employer Plan
pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = Interbank Offered Rate
---------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means, for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D, as such regulation may be amended from time to
time or any successor regulation, as the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to Eurocurrency
liabilities as that term is defined
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<PAGE>
in Regulation D (or against any other category of liabilities that
includes deposits by reference to which the interest rate of Eurodollar
Loans is determined), whether or not any Lender has any Eurocurrency
liabilities subject to such reserve requirement at that time.
Eurodollar Loans shall be deemed to constitute Eurocurrency liabilities
and as such shall be deemed subject to reserve requirements without
benefits of credits for proration, exceptions or offsets that may be
available from time to time to a Lender. The Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change in
the Eurodollar Reserve Percentage.
"Event of Default" shall have the meaning assigned to such
term in Section 9.1.
"Existing Letters of Credit" means those Letters of Credit
outstanding on the Closing Date and identified on Schedule 2.2(b)-1.
"Extension of Credit" means, as to any Lender, the making of,
or participation in, a Loan by such Lender or the issuance or extension
of, or participation in, a Letter of Credit by such Lender.
"Fees" means all fees payable pursuant to Section 3.5.
"Federal Funds Rate" means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest whole multiple
of 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding
such day, PROVIDED that (A) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day and (B) if no such rate is so
published on such next preceding Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Administrative
Agent on such day on such transactions as determined by the
Administrative Agent.
"Foreign Credit Party" means a Credit Party which is not a
Domestic Credit Party.
"Foreign Subsidiary" means a Subsidiary which is not a
Domestic Subsidiary.
"Funded Debt" means, with respect to any Person, without
duplication, (i) all Indebtedness of such Person for borrowed money,
(ii) all obligations of such Person evidenced by bonds, debentures,
notes or similar instruments, or upon which interest payments are
customarily made, (iii) all purchase money Indebtedness (including for
purposes hereof, indebtedness and obligations described in clauses
(iii) and (iv) of the definition of "Indebtedness") of such Person,
including without limitation the principal portion of all obligations
of such Person under Capital Leases, (iv) all Support Obligations of
such Person with respect to Funded Debt of another Person, (v) the
maximum available amount of all standby letters of credit or
acceptances issued or created for the account of such Person, (vi) all
Funded Debt of another Person secured by a Lien on any Property of
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such Person, whether or not such Funded Debt has been assumed, provided
that for purposes hereof the amount of such Funded Debt shall be
limited to the greater of (A) the amount of such Funded Debt as to
which there is recourse to such Person and (B) the fair market value of
the property which is subject to such Lien, (vii) the outstanding
attributed principal amount under any securitization transaction, and
(viii) the principal balance outstanding under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar
off-balance sheet financing product to which such Person is a party,
where such transaction is considered borrowed money indebtedness for
tax purposes but is classified as an operating lease in accordance with
GAAP. The Funded Debt of any Person shall include the Funded Debt of
any partnership or joint venture in which such Person is a general
partner or joint venturer, but only to the extent to which there is
recourse to such Person for the payment of such Funded Debt.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3.
"Governmental Authority" means any federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Guarantor" means each of those Persons identified as a
"Guarantor" on the signature pages hereto, and each other Person which
may hereafter become a Guarantor by execution of a Joinder Agreement,
together with their successors and permitted assigns.
"Guaranteed Obligations" means, as to each Guarantor, without
duplication, (i) all obligations of the Borrower (including interest
accruing after a Bankruptcy Event, regardless of whether such interest
is allowed as a claim under the Bankruptcy Code) to the Lenders and the
Administrative Agent, whenever arising, under this Credit Agreement,
the Notes or the other Credit Documents, and (ii) all liabilities and
obligations, whenever arising, owing from the Borrower to any Lender,
or any Affiliate of a Lender, arising under any Hedging Agreement
relating to Obligations hereunder.
"Hedging Agreements" means any interest rate protection
agreement, foreign currency exchange agreement or currency option
agreement between the Borrower and any Lender or any Affiliate of a
Lender.
"Indebtedness" of any Person means, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made,
(iii) all obligations of such Person under conditional sale or other
title retention agreements relating to Property purchased by such
Person (other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (iv) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such
Person (other than trade debt incurred in the ordinary course of
business and due within six months of the incurrence thereof) which
would appear as liabilities on a balance sheet of such Person, (v) all
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obligations of such Person under take-or-pay or similar arrangements or
under commodities agreements, (vi) all Indebtedness of others secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out
of the proceeds of production from, Property owned or acquired by such
Person, whether or not the obligations secured thereby have been
assumed, PROVIDED that for purposes hereof the amount of such
Indebtedness shall be limited to the greater of (A) the amount of such
Indebtedness as to which there is recourse to such Person and (B) the
fair market value of the property which is subject to such Lien, (vii)
all Support Obligations of such Person, (viii) the principal portion of
all obligations of such Person under Capital Leases, (ix) all
obligations of such Person in respect of interest rate protection
agreements, foreign currency exchange agreements, commodity purchase or
option agreements or other interest or exchange rate or commodity price
hedging agreements (including, but not limited to, the Hedging
Agreements), (x) the maximum amount of all standby letters of credit
issued or bankers' acceptances facilities created for the account of
such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed), (xi) all preferred stock issued by such
Person and required by the terms thereof to be redeemed, or for which
mandatory sinking fund payments are due, by a fixed date, (xii) the
outstanding attributed principal amount under any securitization
transaction and (xiii) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product to which such Person is
a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
in accordance with GAAP. The Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer, but only to the extent
to which there is recourse to such Person for payment of such
Indebtedness.
"Interbank Offered Rate" means, for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
(rounded upwards, if necessary, to the nearest whole multiple of 1/100
of 1%) equal to the rate of interest, determined by the Administrative
Agent on the basis of the offered rates for deposits in Dollars for a
period of time corresponding to such Interest Period (and commencing on
the first day of such Interest Period), appearing on Telerate Page 3750
(or, if, for any reason, Telerate Page 3750 is not available, the
Reuters Screen LIBO Page) as of approximately 11:00 A.M. (London time)
two (2) Business Days before the first day of such Interest Period. As
used herein, "Telerate Page 3750" means the display designated as page
3750 by Dow Jones Markets, Inc. (or such other page as may replace such
page on that service for the purpose of displaying the British Bankers
Association London interbank offered rates) and "Reuters Screen LIBO
Page" means the display designated as page "LIBO" on the Reuters
Monitor Money Rates Service (or such other page as may replace the LIBO
page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Interest Payment Date" means (i) as to any Base Rate Loan
(other than a Swingline Loan), the last day of each January, April,
July and October, the date of repayment of principal of such Loan and
the Termination Date and (ii) as to any Eurodollar Loan and
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Swingline Loan, the last day of each Interest Period for such Loan, the
date of repayment of principal of such Loan and the Termination Date,
and in addition where the applicable Interest Period is more than three
months, then also on the date three months from the beginning of such
Interest Period, and each three months thereafter. If an Interest
Payment Date falls on a date which is not a Business Day, such Interest
Payment Date shall be deemed to be the next succeeding Business Day.
"Interest Period" means (i) as to any Eurodollar Loan, a
period of one, two, three or six months' duration, as the Borrower may
elect, commencing in each case on the date of borrowing (including
conversions, extensions and renewals), and (ii) as to any Swingline
Loan, a period of such duration, not to exceed 30 days, as the Borrower
may request and the Swingline Lender may agree in accordance with the
provisions of Section 2.3(b)(i), commencing in each case, on the date
of borrowing; PROVIDED, HOWEVER, (A) if any Interest Period would end
on a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day (except that in the case
of Eurodollar Loans where the next succeeding Business Day falls in the
next succeeding calendar month, then on the next preceding Business
Day), (B) in the case of Loans other than those comprising the Term
Loan, no Interest Period shall extend beyond the Termination Date , and
in the case of Loans comprising the Term Loan, no Interest Period shall
extend beyond any principal amortization payment date unless, and to
the extent that, the portion of the Term Loan comprised of Eurodollar
Loans expiring prior to the applicable principal amortization payment
date plus the portion of the Term Loan comprised of Base Rate Loans
equals or exceeds the principal amortization payment then due; and (C)
in the case of Eurodollar Loans, where an Interest Period begins on a
day for which there is no numerically corresponding day in the calendar
month in which the Interest Period is to end, such Interest Period
shall end on the last day of such calendar month.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, and any successor statute thereto, as interpreted by
the rules and regulations issued thereunder, in each case as in effect
from time to time. References to sections of the Internal Revenue Code
shall be construed also to refer to any successor sections.
"Investment", in any Person, means any loan or advance to such
Person, any purchase or other acquisition of any capital stock,
warrants, rights, options, obligations or other securities of, or
equity interest in, such Person, any capital contribution to such
Person or any other investment in such Person, including, without
limitation, any Support Obligation incurred for the benefit of such
Person.
"Issuing Lender" means NationsBank.
"Issuing Lender Fees" shall have the meaning assigned to such
term in Section 3.5(b)(ii).
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"Joinder Agreement" means a Joinder Agreement substantially in
the form of Schedule 7.11, executed and delivered by an Additional
Credit Party in accordance with the provisions of Section 7.11.
"Lenders" means each of the Persons identified as a "Lender"
on the signature pages hereto, and their successors and assigns.
"Letter of Credit" means the Existing Letters of Credit and
any standby letter of credit issued by the Issuing Lender for the
account of the Borrower in accordance with the terms of Section 2.2.
"Letter of Credit Fee" shall have the meaning assigned such
term in Section 3.5(b)(i).
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans, the Swingline
Loans and/or the Term Loan.
"LOC Commitment" means the commitment of the Issuing Lender to
issue, and to honor payment obligations under, Letters of Credit
hereunder and with respect to each Revolving Lender, the commitment of
each Revolving Lender to purchase participation interests in the
Letters of Credit up to such Revolving Lender's LOC Committed Amount as
specified in Schedule 2.1(a), as such amount may be reduced from time
to time in accordance with the provisions hereof.
"LOC Committed Amount" means, collectively, the aggregate
amount of all of the LOC Commitments of the Revolving Lenders to issue
and participate in Letters of Credit as referenced in Section 2.2(a)
and, individually, the amount of each Revolving Lender's LOC Commitment
as specified in Schedule 2.1(a).
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (i) the rights and obligations of the parties concerned
or at risk or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then
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outstanding, assuming compliance with all requirements for drawings
referred to in such Letters of Credit PLUS (ii) the aggregate amount of
all drawings under Letters of Credit honored by the Issuing Lender but
not theretofore reimbursed.
"Material Adverse Effect" means a material adverse effect on
(i) the condition (financial or otherwise), operations, business,
assets, liabilities or prospects of the Consolidated Group taken as a
whole that could reasonably be expected to result in a Default or Event
of Default or (ii) the ability of the Administrative Agent and the
Lenders to exercise their rights and remedies under the Credit
Documents in the event of a Default or Event of Default.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
regulated as such in or under any Environmental Laws, including,
without limitation, friable asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Moody's" means Moody's Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Section 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which is a single
employer plan, as defined in Section 4001(a)(15) of ERISA and which the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate and at
least one employer other than the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate are contributing sponsors.
"NationsBank" means NationsBank, N.A. and its successors.
"Net Proceeds" means gross cash proceeds (including any cash
received by way of deferred payment pursuant to a promissory note,
receivable or otherwise, but only as and when received) received in
connection with an Asset Disposition or Equity Transaction, net of (i)
reasonable transaction costs, including in the case of an Equity
Transaction, underwriting discounts and commissions and in the case of
an Asset Disposition occurring in connection with a claim under an
insurance policy, costs incurred in connection with adjustment and
settlement of such claim, (ii) estimated taxes payable in connection
therewith, and (iii) in the case of an Asset Disposition, any amounts
payable in respect of Funded Debt, including without limitation
principal, interest, premiums and penalties, which is secured by, or
otherwise related to, any property or asset which is the subject
thereof to the extent that such Funded Debt and any payments in respect
thereof are paid with a portion of the proceeds therefrom.
"Non-Excluded Taxes" shall have the meaning assigned to such
term in Section 3.10.
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"Note" or "Notes" means any Revolving Note or any Term Note.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Schedule 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means a written notice of
extension or conversion in substantially the form of Schedule 3.2, as
required by Section 3.2.
"Obligations" means, collectively, the Revolving Loans, the
Swingline Loans, the LOC Obligations and the Term Loan.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property which is not a Capital Lease other
than any such lease in which that Person is the lessor.
"Participation Interest" means the purchase by a Lender of a
participation in LOC Obligations as provided in Section 2.2(c), in
Swingline Loans as provided in Section 2.3(b)(iii) and in Loans as
provided in Section 3.13.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereof.
"Permitted Investments" means Investments which are either (i)
cash or Cash Equivalents; (ii) accounts receivable created, acquired or
made and trade credit extended in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms;
(iii) Investments consisting of stock, obligations, securities or other
property received in settlement of accounts receivable (created in the
ordinary course of business) from bankrupt obligors; (iv) Investments
existing as of the Closing Date and set forth in Schedule 8.4; (v)
Support Obligations permitted by Section 8.1; (vi) acquisitions
permitted by Section 8.3(c); (vii) transactions permitted by Section
8.5; (viii) loans to employees, directors or officers in connection
with the award of convertible bonds or stock under a stock incentive
plan, stock option plan or other equity-based compensation plan or
arrangement in the aggregate not to exceed $1,000,000 (calculated on
the exercise price for any such shares) in the aggregate at any time
outstanding; (ix) other advances or loans to employees, directors,
officers or agents for travel or other business expenses in the
ordinary course of business and other advances or loans to employees,
directors, officers or agents not to exceed $500,000 in the aggregate
at any time outstanding; (x) advances or loans to customers,
manufacturer representatives and suppliers that do not exceed
$1,000,000 in the aggregate at any one time outstanding; (xi)
Investments by members of the Consolidated Group in their Subsidiaries
and Affiliates existing on the Closing Date; (xii) Investments by
members of the Consolidated Group in and to a Credit Party; (xiii)
additional Investments in Shanghai in an amount not to exceed
$10,000,000; and (xiv) other loans, advances and investments of a
nature not contemplated in the foregoing subsections in an amount not
to exceed $1,000,000 in the aggregate at any time outstanding.
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"Permitted Liens" means:
(i) Liens in favor of the Administrative Agent on
behalf of the Lenders;
(ii) Liens in favor of a Lender or an Affiliate of a
Lender pursuant to a Hedging Agreement permitted hereunder,
but only (A) to the extent such Liens secure obligations under
such agreements permitted under Section 8.1, (B) to the extent
such Liens are on the same collateral as to which the Lenders
also have a Lien and (C) if such provider and the Lenders
shall share PARI PASSU in the collateral subject to such
Liens;
(iii) Liens (other than Liens created or imposed
under ERISA) for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and
as to which the Property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof);
(iv) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and suppliers
and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary
course of business, PROVIDED that such Liens secure only
amounts not yet due and payable or, if due and payable, are
unfiled and no other action has been taken to enforce the same
or are being contested in good faith by appropriate
proceedings for which adequate reserves determined in
accordance with GAAP have been established (and as to which
the Property subject to any such Lien is not yet subject to
foreclosure, sale or loss on account thereof);
(v) Liens (other than Liens created or imposed under
ERISA) incurred or deposits made by the Borrower and its
Subsidiaries in the ordinary course of business in connection
with workers' compensation, unemployment insurance and other
types of social security, or to secure the performance of
tenders, statutory obligations, bids, leases, government
contracts, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment
of borrowed money);
(vi) Liens in connection with attachments or
judgments (including judgment or appeal bonds) PROVIDED that
the judgments secured shall, within 45 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 45 days
after the expiration of any such stay;
(vii) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or
irregularities in title and other similar charges or
encumbrances not,
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in any material respect, impairing the use of the encumbered
Property for its intended purposes;
(viii) Liens securing purchase money and
sale/leaseback Indebtedness (including Capital Leases) to the
extent permitted under Section 8.1(c), PROVIDED that any such
Lien attaches only to the Property financed or leased and such
Lien attaches thereto concurrently with or within 90 days
after the acquisition thereof in connection with the purchase
money transactions and within 30 days after the closing of any
sale/leaseback transaction;
(ix) leases or subleases granted to others not
interfering in any material respect with the business of any
member of the Consolidated Group;
(x) any interest of title of a lessor under, and
Liens arising from UCC financing statements (or equivalent
filings, registrations or agreements in foreign jurisdictions)
relating to, leases permitted by this Credit Agreement;
(xi) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties in connection with the importation of goods;
(xii) Liens created or deemed to exist in connection
with a securitization transaction permitted hereunder
(including any related filings of any financing statements),
but only to the extent that any such Lien relates to the
applicable receivables and related property actually sold,
contributed or otherwise conveyed pursuant to such
transaction;
(xiii) Liens deemed to exist in connection with
Investments in repurchase agreements permitted under Section
8.4;
(xiv) normal and customary rights of setoff upon
deposits of cash in favor of banks or other depository
institutions; and
(xv) Liens existing as of the Closing Date and set
forth on Schedule 6.8; PROVIDED that (a) no such Lien shall at
any time be extended to or cover any Property other than the
Property subject thereto on the Closing Date and (b) the
principal amount of the Indebtedness secured by such Liens
shall not be extended, renewed, refunded or refinanced.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which the
Borrower, any Subsidiary of the
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Borrower or any ERISA Affiliate is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" within the meaning of Section 3(5) of ERISA.
"Pledge Agreement" means the Pledge Agreement dated as of the
Closing Date given by the Borrower and the other pledgors identified
therein to NationsBank, N.A., as Administrative Agent, to secure, among
other things, the obligations hereunder, as amended and modified.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by NationsBank as its prime rate in effect
at its principal office in Charlotte, North Carolina, with each change
in the Prime Rate being effective on the date such change is publicly
announced as effective (it being understood and agreed that the Prime
Rate is a reference rate used by NationsBank in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit by NationsBank to any
debtor).
"Pro Forma Basis" means, with respect to any Transaction, that
such Transaction shall be deemed to have occurred as of the first day
of the four fiscal-quarter period ending as of the most recent fiscal
quarter end preceding the date of such Transaction with respect to
which the Administrative Agent and the Lenders have received the
officer's certificate in accordance with the provisions of Section
7.2(b). As used herein, "Transaction" means (i), any corporate merger
or consolidation as referred to in Section 8.3(a), (ii) the incurrence
of Subordinated Debt as referred to in Section 8.1(g), (iii) any sale
or other disposition of assets as referred to in Section 8.3(b), (iv)
any acquisition of capital stock or securities or any purchase, lease
or other acquisition of property as referred to in Section 8.3(c) or
(v) the making of any Restricted Payment as referred to in Section 8.9.
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Purchase Agreement" means that certain Purchase and Sale
Agreement dated as of November 23, 1998, by and among the Borrower, C &
D Acquisition Corp. and Johnson Controls, Inc. and certain of its
Subsidiaries, as amended, modified and restated from time to time.
"Quoted Rate" means, with respect to a Quoted Rate Swingline
Loan, the fixed or floating percentage rate per annum, if any, offered
by the Swingline Lender and accepted by the Borrower in accordance with
the provisions hereof; PROVIDED that from the date that any Revolving
Lender funds a Participation Interest in such Quoted Rate Swingline
Loan pursuant to the terms of Section 2.3(c), the Quoted Rate for such
Quoted Rate Swingline Loan shall be a rate equal to the Base Rate plus
the Applicable Percentage.
"Quoted Rate Swingline Loan" means a Swingline Loan bearing
interest at the Quoted Rate.
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"Register" shall have the meaning assigned such term in
Section 11.3(c).
"Regulation D, T, U or X" means Regulation D, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the environment (including the abandonment or
discarding of barrels, containers and other closed receptacles
containing any Materials of Environmental Concern).
"Reportable Event" means any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the
notice requirement has been waived by regulation.
"Required Lenders" means, at any time, Lenders having more
than fifty percent (50%) of the Commitments, or if the Commitments have
been terminated, Lenders having more than fifty percent (50%) of the
aggregate principal amount of the Obligations outstanding (taking into
account in each case Participation Interests or obligations to
participate therein); PROVIDED that the Commitments of, and outstanding
principal amount of Obligations (taking into account Participation
Interests or obligations to participate therein) owing to, a Defaulting
Lender shall be excluded for purposes hereof in making a determination
of Required Lenders.
"Requirement of Law" means, as to any Person, the certificate
of incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule, regulation or
ordinance (including, without limitation, Environmental Laws) 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 material property.
"Responsible Officer" means the Chief Financial Officer, the
Controller, any Vice President and the Treasurer.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of stock now or hereafter outstanding, except (A) a dividend payable
solely in shares of that class to the holders of that class and (B)
dividends and other distributions payable to a Credit Party, (ii) any
redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any
class of stock now or hereafter outstanding and (iii) any payment made
to retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire shares of any class of stock now or
hereafter outstanding.
"Revolving Commitment" means, with respect to each Revolving
Lender, the commitment of such Revolving Lender to make Revolving Loans
in an aggregate principal amount at any time outstanding up to such
Revolving Lender's Commitment Percentage of
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the Aggregate Revolving Committed Amount as specified in Schedule
2.1(a), as such amount may be reduced from time to time in accordance
with the provisions hereof.
"Revolving Commitment Percentage" means, for each Revolving
Lender, a fraction (expressed as a decimal) the numerator of which is
the Revolving Commitment of such Revolving Lender at such time and the
denominator of which is the Aggregate Revolving Committed Amount at
such time. The initial Revolving Commitment Percentages are set out on
Schedule 2.1(a).
"Revolving Committed Amount" means, collectively, the
aggregate amount of all of the Revolving Commitments and, individually,
the amount of each Revolving Lender's Revolving Commitment as specified
in Schedule 2.1(a).
"Revolving Lenders" means Lenders holding Revolving
Commitments, as identified on Schedule 2.1(a), and their successors and
assigns.
"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory
notes of the Borrower in favor of each of the Revolving Lenders
evidencing the Revolving Loans and Swingline Loans in substantially the
form attached as Schedule 2.1(e), individually or collectively, as
appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Revolving Obligations" means, collectively, the Revolving
Loans, Swingline Loans and LOC Obligations.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Shanghai" means Shanghai Johnson Battery Company Limited, a
limited liability company organized under the laws of the People's
Republic of China.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Specialty Battery Division Acquisition" means the acquisition
by the Borrower pursuant to the terms of the Purchase Agreement.
"Subject Properties" shall have the meaning assigned to such
term in Section 6.16(a).
"Subordinated Debt" means any Indebtedness of a member of the
Consolidated Group which by its terms is expressly subordinated in
right of payment to the prior
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payment of the obligations under the Credit Agreement and the other
Credit Documents on terms and conditions and evidenced by documentation
satisfactory to the Administrative Agent and the Required Lenders.
"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more than 50% of
the voting interests at any time. Unless otherwise identified,
"Subsidiary" or "Subsidiaries" means Subsidiaries of the Borrower.
"Support Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
Property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase Property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount
of any Support Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Support Obligation is made.
"Swingline Commitment" means the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at any
time outstanding up to the Swingline Committed Amount and the
commitment of the Revolving Lenders to purchase participation interests
in the Swingline Loans up to their respective Revolving Commitment
Percentage as provided in Section 2.3(b)(iii), as such amounts may be
reduced from time to time in accordance with the provisions hereof.
"Swingline Committed Amount" means the amount of the Swingline
Lender's Commitment as specified in Section 2.3(a).
"Swingline Lender" means NationsBank.
"Swingline Loan" means a swingline revolving loan made by the
Swingline Lender pursuant to the provisions of Section 2.3.
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"Term Lenders" means Lenders holding Term Loan Commitments, as
identified on Schedule 2.1(a), and their successors and assigns.
"Term Loan" shall have the meaning assigned to such term in
Section 2.4(a).
"Term Loan Commitment" means, with respect to each Term
Lender, the commitment of such Term Lender to make its portion of the
Term Loan as specified on Schedule 2.1(a) (and for purposes of making
determinations of Required Lenders hereunder after the Closing Date and
for purposes of calculations referred to in Section 11.6, the principal
amount outstanding on the Term Loan).
"Term Loan Commitment Percentage" means, for each Term Lender,
a fraction (expressed as a percentage) the numerator of which is the
amount of the Term Loan Commitment (and after the Closing Date, the
outstanding principal amount of such Term Lender's portion of the Term
Loan) of such Term Lender at such time and the denominator of which is
the aggregate amount of the Term Loan Commitment (and after the Closing
Date, the aggregate principal amount of the Term Loan) at such time.
The initial Term Loan Commitment Percentages are set out on Schedule
2.1(a).
"Term Loan Committed Amount" means, collectively, the
aggregate amount of all of the Term Loan Commitments and, individually,
the amount of each Term Lender's Term Loan Commitment as specified in
Schedule 2.1(a), as such amounts may be reduced from time to time in
accordance with the provisions hereof.
"Term Note" or "Term Notes" means the promissory notes of the
Borrower in favor of each of the Term Lenders evidencing the Term Loan
in substantially the form attached as Schedule 2.4(d), individually or
collectively, as appropriate, as such promissory notes may be amended,
modified, supplemented, extended or renewed from time to time.
"Termination Date" means March 1, 2004 (being the fifth
anniversary date of the Closing Date), or if extended with the written
consent of each of the Lenders, such later date as to which the
Termination Date may be extended.
"Unused Fee" shall have the meaning assigned such term in
Section 3.5(a).
"Voting Stock" means, with respect to any Person, capital
stock issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of
directors (or persons performing similar functions) of such Person,
even though the right so to vote has been suspended by the happening of
such a contingency.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
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1.3 ACCOUNTING TERMS.
(a) Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance with
this Credit Agreement shall (except as otherwise expressly provided herein) be
made by application of GAAP applied on a basis consistent with the most recent
annual or quarterly financial statements delivered pursuant to Section 7.1 (or,
prior to the delivery of the first financial statements pursuant to Section 7.1,
consistent with the annual audited financial statements referenced in Section
6.1(i)); PROVIDED, HOWEVER, if (a) the Borrower shall object to determining such
compliance on such basis at the time of delivery of such financial statements
due to any change in GAAP or the rules promulgated with respect thereto or (b)
the Administrative Agent or the Required Lenders shall so object in writing
within 30 days after delivery of such financial statements, then such
calculations shall be made on a basis consistent with the most recent financial
statements delivered by the Borrower to the Lenders as to which no such
objection shall have been made.
(b) It is further acknowledged and agreed that, except as expressly
provided otherwise, for purposes of determining the Applicable Percentage and
compliance with the financial covenants in Section 7.9 (and compliance therewith
on a Pro Forma Basis), in the case of acquisitions and dispositions which have
occurred during the applicable period to the extent permitted hereunder,
adjustments shall be made to take into account historical performance relating
thereto during such applicable period prior to the date of such acquisition or
disposition, and the effect of any Indebtedness paid with proceeds from a
disposition.
SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Revolving Commitment. During the Commitment Period, subject to the
terms and conditions hereof, each Revolving Lender severally agrees to make
revolving credit loans (the "Revolving Loans") to the Borrower from time to time
in the amount of such Revolving Lender's Revolving Commitment Percentage of such
Revolving Loans for the purposes hereinafter set forth; PROVIDED that (i) with
regard to the Revolving Lenders collectively, the aggregate principal amount of
Revolving Obligations outstanding at any time shall not exceed the Aggregate
Revolving Committed Amount, and (ii) with regard to each Revolving Lender
individually, such Revolving Lender's Revolving Commitment Percentage of
Revolving Obligations outstanding at any time shall not exceed such Revolving
Lender's Revolving Committed Amount. Revolving Loans may consist of Base Rate
Loans or Eurodollar Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the provisions
hereof.
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(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) on the date of the
requested borrowing in the case of Base Rate Loans, and on the third
Business Day prior to the date of the requested borrowing in the case
of Eurodollar Loans. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Revolving Loan is requested,
(B) the date of the requested borrowing (which shall be a Business
Day), (C) the aggregate principal amount to be borrowed, and (D)
whether the borrowing shall be comprised of Base Rate Loans, Eurodollar
Loans or a combination thereof, and if Eurodollar Loans are requested,
the Interest Period(s) therefor. If the Borrower shall fail to specify
in any such Notice of Borrowing (I) an applicable Interest Period in
the case of a Eurodollar Loan, then such notice shall be deemed to be a
request for an Interest Period of one month, or (II) the type of
Revolving Loan requested, then such notice shall be deemed to be a
request for a Base Rate Loan hereunder. The Administrative Agent shall
give notice to each Revolving Lender promptly upon receipt of each
Notice of Borrowing pursuant to this Section 2.1(b)(i), the contents
thereof and each such Revolving Lender's share of any borrowing to be
made pursuant thereto.
(ii) Minimum Amounts. Each Revolving Loan shall be in a
minimum aggregate principal amount of $2,000,000, in the case of
Eurodollar Loans, or $500,000 (or the remaining Revolving Committed
Amount, if less), in the case of Base Rate Loans, and integral
multiples of $50,000 in excess thereof.
(iii) Advances. Each Revolving Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available to the
Administrative Agent for the account of the Borrower, or in such other
manner as the Administrative Agent may specify in writing, by 1:00 P.M.
(Charlotte, North Carolina time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent by crediting the
account of the Borrower with the aggregate of the amounts made
available to the Administrative Agent by the Revolving Lenders and in
like funds as received by the Administrative Agent.
(c) Repayment. The principal amount of all Revolving Loans shall be due
and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Base Rate Loans, such Base
Rate Loans shall bear interest at a per annum rate equal to the Base
Rate PLUS the Applicable Percentage;
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(ii) Eurodollar Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to the
Eurodollar Rate PLUS the Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each applicable
Interest Payment Date (or at such other times as may be specified herein).
(e) Revolving Notes. The Revolving Loans shall be evidenced by a duly
executed Revolving Note in favor of each Revolving Lender.
(f) Maximum Number of Eurodollar Loans. The Borrower will be limited to
a maximum number of ten (10) Eurodollar Loans outstanding at any time which are
Revolving Loans or Term Loans. For purposes hereof, Eurodollar Loans with
separate or different Interest Periods will be considered separate Eurodollar
Loans even if their Interest Periods expire on the same date.
2.2 LETTER OF CREDIT SUBFACILITY.
(a) Issuance. During the Commitment Period, subject to the terms and
conditions hereof and of the LOC Documents, if any, and such other terms and
conditions which the Issuing Lender may reasonably require, the Issuing Lender
shall issue, and the Revolving Lenders shall participate in, such Letters of
Credit as the Borrower may request for its own account or for the account of
another Credit Party as provided herein, in a form acceptable to the Issuing
Lender, for the purposes hereinafter set forth; provided that (i) the aggregate
amount of LOC Obligations shall not exceed THIRTY MILLION DOLLARS ($30,000,000)
at any time (the "LOC Committed Amount"), (ii) with regard to the Revolving
Lenders collectively, the aggregate principal amount of Revolving Obligations
outstanding at any time shall not exceed the Aggregate Revolving Committed
Amount, and (iii) with regard to each Revolving Lender individually, such
Revolving Lender's Revolving Commitment Percentage of Revolving Obligations
outstanding at any time shall not exceed such Revolving Lender's Revolving
Committed Amount. Letters of Credit issued hereunder shall not have an original
expiry date more than one year from the date of issuance or extension, nor an
expiry date, whether as originally issued or by extension, extending beyond the
date five (5) Business Days prior to the Termination Date. Each Letter of Credit
shall comply with the related LOC Documents. The issuance date of each Letter of
Credit shall be a Business Day.
(b) Notice and Reports. Except for those Letters of Credit described on
Schedule 2.2(b)-1 which shall be issued on the Closing Date, the request for the
issuance of a Letter of Credit shall be submitted by the Borrower to the Issuing
Lender at least three (3) Business Days prior to the requested date of issuance
(or such shorter period as may be agreed by the Issuing Lender). A form of
Notice of Request for Letter of Credit is attached as Schedule 2.2(b)-2. The
Issuing Lender will provide to the Administrative Agent at least monthly, and
more frequently upon request, a detailed summary report on its Letters of Credit
and the activity thereon, in form and substance acceptable to the Administrative
Agent. In addition, the Issuing Lender will provide to the Administrative Agent
for dissemination to the Revolving Lenders at least quarterly, and more
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frequently upon request, a detailed summary report on its Letters of Credit and
the activity thereon, including, among other things, the Credit Party for whose
account each Letter of Credit is issued, the beneficiary, the face amount, and
the expiry date. The Issuing Lender will provide copies of the Letters of Credit
to the Administrative Agent and the Revolving Lenders promptly upon request.
(c) Participation. Each Revolving Lender, with respect to the Existing
Letters of Credit, hereby purchases a participation interest in such Existing
Letters of Credit, and with respect to Letters of Credit issued on or after the
Closing Date, upon issuance of a Letter of Credit, shall be deemed to have
purchased without recourse a risk participation from the Issuing Lender in such
Letter of Credit and the obligations arising thereunder, in each case in an
amount equal to its pro rata share of the obligations under such Letter of
Credit (based on the respective Revolving Commitment Percentages of the
Revolving Lenders) and shall absolutely, unconditionally and irrevocably assume,
as primary obligor and not as surety, and be obligated to pay to the Issuing
Lender and discharge when due, its pro rata share of the obligations arising
under such Letter of Credit. Without limiting the scope and nature of each
Revolving Lender's participation in any Letter of Credit, to the extent that the
Issuing Lender has not been reimbursed as required hereunder, each Revolving
Lender shall pay to the Issuing Lender its pro rata share of such unreimbursed
drawing in same day funds on the day of notification by the Issuing Lender of an
unreimbursed drawing pursuant to the provisions of subsection (d) below. The
obligation of each Revolving Lender to so reimburse the Issuing Lender shall be
absolute and unconditional and shall not be affected by the occurrence of a
Default, an Event of Default or any other occurrence or event. Any such
reimbursement shall not relieve or otherwise impair the obligation of the
Borrower to reimburse the Issuing Lender hereunder, together with interest as
hereinafter provided.
(d) Reimbursement. In the event of any drawing under any Letter of
Credit, the Issuing Lender will promptly notify the Borrower. Unless the
Borrower shall immediately notify the Issuing Lender that the Borrower intends
to otherwise reimburse the Issuing Lender for such drawing, the Borrower shall
be deemed to have requested that the Revolving Lenders make a Revolving Loan in
the amount of the drawing as provided in subsection (e) below on the related
Letter of Credit, the proceeds of which will be used to satisfy the related
reimbursement obligations. The Borrower promises to reimburse the Issuing Lender
on the day of drawing under any Letter of Credit (either with the proceeds of a
Revolving Loan obtained hereunder or otherwise) in same day funds. If the
Borrower shall fail to reimburse the Issuing Lender as provided hereinabove, the
unreimbursed amount of such drawing shall bear interest at a per annum rate
equal to the Base Rate plus the sum of (i) the Applicable Percentage and (ii)
two percent (2%). The Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances irrespective of any rights of
setoff, counterclaim or defense to payment the Borrower may claim or have
against the Issuing Lender, the Administrative Agent, the Lenders, the
beneficiary of any Letter of Credit drawn upon or any other Person, including
without limitation any defense based on any failure of the Borrower or any other
Credit Party to receive consideration or the legality, validity, regularity or
unenforceability of such Letter of Credit; PROVIDED that the beneficiary of such
Letter of Credit has substantially complied with the conditions required to draw
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on such Letter of Credit. The Issuing Lender will promptly notify the Revolving
Lenders of the amount of any unreimbursed drawing and each Revolving Lender
shall promptly pay to the Administrative Agent for the account of the Issuing
Lender in Dollars and in immediately available funds, the amount of such
Revolving Lender's pro rata share of such unreimbursed drawing. Such payment
shall be made on the day such notice is received by such Revolving Lender from
the Issuing Lender if such notice is received at or before 2:00 P.M. (Charlotte,
North Carolina time) otherwise such payment shall be made at or before 12:00
Noon (Charlotte, North Carolina time) on the Business Day next succeeding the
day such notice is received. If such Revolving Lender does not pay such amount
to the Issuing Lender in full upon such request, such Revolving Lender shall, on
demand, pay to the Administrative Agent for the account of the Issuing Lender
interest on the unpaid amount during the period from the date such unpaid amount
is due until such Revolving Lender pays such amount to the Issuing Lender in
full at a rate per annum equal to, if paid within three (3) Business Days of the
date that such Revolving Lender is required to make payments of such amount
pursuant to the preceding sentence, the Federal Funds Rate and thereafter at a
rate equal to the Base Rate. Each Revolving Lender's obligation to make such
payment to the Issuing Lender, and the right of the Issuing Lender to receive
the same, shall be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this Credit
Agreement or the Commitments hereunder, the existence of a Default or Event of
Default or the acceleration of the obligations of the Borrower hereunder and
shall be made without any offset, abatement, withholding or reduction
whatsoever. Simultaneously with the making of each such payment by a Revolving
Lender to the Issuing Lender, such Revolving Lender shall, automatically and
without any further action on the part of the Issuing Lender or such Revolving
Lender, acquire a participation in an amount equal to such payment (excluding
the portion of such payment constituting interest owing to the Issuing Lender)
in the related unreimbursed drawing portion of the LOC Obligation and in the
interest thereon and in the related LOC Documents, and shall have a claim
against the Borrower with respect thereto.
(e) Repayment with Revolving Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Revolving Loan to
reimburse a drawing under a Letter of Credit, the Administrative Agent shall
give notice to the Revolving Lenders that a Revolving Loan has been requested or
deemed requested by the Borrower to be made in connection with a drawing under a
Letter of Credit, in which case a Revolving Loan comprised of Base Rate Loans
(or Eurodollar Loans to the extent the Borrower has complied with the procedures
of Section 2.1(b)(i) with respect thereto) shall be immediately made to the
Borrower by all Revolving Lenders (notwithstanding any termination of the
Commitments pursuant to Section 3.4 or Section 9.2) PRO RATA based on the
respective Revolving Commitment Percentages of the Revolving Lenders (determined
before giving effect to any termination of the Commitments pursuant to Section
3.4 or Section 9.2) and the proceeds thereof shall be paid directly to the
Issuing Lender for application to the respective LOC Obligations. Each Revolving
Lender hereby irrevocably agrees to make its pro rata share of each such
Revolving Loan immediately upon any such request or deemed request in the
amount, in the manner and on the date specified in the preceding sentence
NOTWITHSTANDING (i) the amount of such borrowing may not comply with the minimum
amount for advances of Revolving Loans otherwise required hereunder (except in
the case of Eurodollar Loans), (ii) whether any conditions specified in Section
5.2 are then satisfied, (iii) whether a Default or an Event of Default then
exists, (iv) failure for any such request or deemed request for a Revolving
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Loan to be made by the time otherwise required hereunder (except in the case of
Eurodollar Loans), (v) whether the date of such borrowing is a date on which
Revolving Loans are otherwise permitted to be made hereunder or (vi) any
termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including,
without limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower or any Credit Party), then each
such Revolving Lender hereby agrees that it shall forthwith purchase (as of the
date such borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower on or after such date and prior to such purchase)
from the Issuing Lender such participation in the outstanding LOC Obligations as
shall be necessary to cause each Revolving Lender to share in such LOC
Obligations ratably (based upon the respective Commitment Percentages of the
Revolving Lenders (determined before giving effect to any termination of the
Commitments pursuant to Section 9.2)), PROVIDED that in the event such payment
is not made on the day of drawing, such Revolving Lender shall pay in addition
to the Issuing Lender interest on the amount of its unfunded Participation
Interest at a rate equal to, if paid within two (2) Business Days of the date
such Revolving Lender is required to pay its pro rata share of such drawing in
accordance with Section 2.2(d), the Federal Funds Rate, and thereafter at the
Base Rate.
(f) Designation of other Credit Parties as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit Agreement,
including without limitation Section 2.2(a), a Letter of Credit issued hereunder
may contain a statement to the effect that such Letter of Credit is issued for
the account of a Credit Party other than the Borrower, provided that
notwithstanding such statement, the Borrower shall be the actual account party
for all purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations hereunder
with respect to such Letter of Credit.
(g) Renewal, Extension. The renewal or extension of any Letter of
Credit shall, for purposes hereof, be treated in all respects the same as the
issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits (the "UCP") or the International Standby Practices 1998 (the "ISP98"),
each as published as of the date of issue by the International Chamber of
Commerce, in which case the UCP or the ISP98, as appropriate, may be
incorporated therein and deemed in all respects to be a part thereof.
(i) Indemnification; Nature of Issuing Lender's Duties.
(i) In addition to its other obligations under this Section
2.2, the Borrower hereby agrees to protect, indemnify, pay and save the
Issuing Lender and the Revolving Lenders harmless from and against any
and all claims, demands, liabilities, damages, losses, costs, charges
and expenses (including reasonable attorneys' fees) that the Issuing
Lender or any Revolving Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of the Issuing Lender to honor a
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drawing under a Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or omissions,
herein called "Government Acts").
(ii) As between the Borrower, on the one hand, and the Issuing
Lender and the Revolving Lenders, one the other hand, the Borrower
shall assume all risks of the acts, omissions or misuse of any Letter
of Credit by the beneficiary thereof. Neither the Issuing Lender nor
the Revolving Lenders shall be responsible: (A) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and
issuance of any Letter of Credit, even if it should in fact prove to be
in any or all respects invalid, insufficient, inaccurate, fraudulent or
forged; (B) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable,
telegraph, telex or otherwise, whether or not they be in cipher; (D)
for any loss or delay in the transmission or otherwise of any document
required in order to make a drawing under a Letter of Credit or of the
proceeds thereof; and (E) for any consequences arising from causes
beyond the control of the Issuing Lender, including, without
limitation, any Government Acts. None of the above shall affect,
impair, or prevent the vesting of the Issuing Lender's and the
Revolving Lenders' rights or powers hereunder.
(iii) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender, under or in connection with any Letter
of Credit or the related certificates, if taken or omitted in good
faith, shall not put the Issuing Lender or any Revolving Lender under
any resulting liability to the Borrower or any other Credit Party. It
is the intention of the parties that this Credit Agreement shall be
construed and applied to protect and indemnify the Issuing Lender and
the Revolving Lenders against any and all risks involved in the
issuance of the Letters of Credit, all of which risks are hereby
assumed by the Borrower (on behalf of itself and each of the other
Credit Parties), including, without limitation, any and all Government
Acts. The Issuing Lender and the Revolving Lenders shall not, in any
way, be liable for any failure by the Issuing Lender or anyone else to
pay any drawing under any Letter of Credit as a result of any
Government Acts or any other cause beyond the control of the Issuing
Lender.
(iv) Nothing in this subsection (i) is intended to limit the
reimbursement obligations of the Borrower contained in subsection (d)
above. The obligations of the Borrower under this subsection (i) shall
survive the termination of this Credit Agreement. No act or omissions
of any current or prior beneficiary of a Letter of Credit shall in any
way affect or impair the rights of the Issuing Lender or any Revolving
Lender to enforce any right, power or benefit under this Credit
Agreement.
(v) Notwithstanding anything to the contrary contained in this
subsection (i), the Borrower shall have no obligation to indemnify the
Issuing Lender in respect of any
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liability incurred by the Issuing Lender (A) arising solely out of the
gross negligence or willful misconduct of the Issuing Lender, as
determined by a court of competent jurisdiction, or (B) caused by the
Issuing Lender's failure to pay under any Letter of Credit after
presentation to it of a request complying with the terms and conditions
of such Letter of Credit, as determined by a court of competent
jurisdiction, unless such payment is prohibited by any law, regulation,
court order or decree.
(j) Responsibility of Issuing Lender. It is expressly understood and
agreed that the obligations of the Issuing Lender hereunder to the Lenders are
only those expressly set forth in this Credit Agreement and that the Issuing
Lender shall be entitled to assume that the conditions precedent set forth in
Section 5.2 have been satisfied unless it shall have acquired actual knowledge
that any such condition precedent has not been satisfied; PROVIDED, HOWEVER,
that nothing set forth in this Section 2.2 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section 2.2 in
the event that it is determined by a court of competent jurisdiction that the
payment with respect to a Letter of Credit constituted gross negligence or
willful misconduct on the part of the Issuing Lender.
(k) Conflict with LOC Documents. In the event of any conflict between
this Credit Agreement and any LOC Document (including any letter of credit
application), this Credit Agreement shall control.
(l) Revolving Lenders. No Revolving Lender shall be required, in
respect of any drawing under any Letter of Credit, to fund or remit to the
Issuing Lender and/or to the Administrative Agent, whether pursuant to Section
2.2(c), Section 2.2(d), Section 2.2(e) or otherwise, more than its Revolving
Commitment Percentage (determined before giving effect to any termination of the
Commitments pursuant to Section 3.4 or Section 9.2) of such drawing.
2.3 SWINGLINE LOAN SUBFACILITY.
(a) Swingline Commitment. During the Commitment Period, subject to the
terms and conditions hereof, the Swingline Lender, in its individual capacity,
agrees to make certain revolving credit loans requested by the Borrower in
Dollars to the Borrower (each a "Swingline Loan" and, collectively, the
"Swingline Loans") for the purposes hereinafter set forth; PROVIDED, HOWEVER,
(i) the aggregate principal amount of Swingline Loans outstanding at any time
shall not exceed TEN MILLION DOLLARS ($10,000,000) (the "Swingline Committed
Amount"), (ii) with regard to the Revolving Lenders collectively, the aggregate
principal amount of Revolving Obligations outstanding at any time shall not
exceed the Aggregate Revolving Committed Amount and (iii) with regard to each
Revolving Lender individually, such Revolving Lender's Revolving Commitment
Percentage of Revolving Obligations outstanding at any time shall not exceed
such Revolving Lender's Revolving Committed Amount. Swingline Loans hereunder
shall be made as Base Rate Loans or Quoted Rate Swingline Loans, and may be
repaid or reborrowed in accordance with the provisions hereof.
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(b) Swingline Loan Advances.
(i) Notices; Disbursement. Whenever the Borrower desires a
Swingline Loan hereunder it shall give written notice (or telephonic
notice promptly confirmed in writing) to the Swingline Lender not later
than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of
the requested Swingline Loan. Each such notice shall be irrevocable and
shall specify (A) that a Swingline Loan is requested, (B) the date of
the requested Swingline Loan (which shall be a Business Day) and (C)
the principal amount of and Interest Period for the Swingline Loan
requested. Each Swingline Loan shall have such maturity date as the
Swingline Lender and the Borrower shall agree. The Swingline Lender
shall initiate the transfer of funds representing the Swingline Loan to
the Borrower by 3:00 P.M. (Charlotte, North Carolina time) on the
Business Day of the requested borrowing.
(ii) Minimum Amounts. Each Swingline Loan shall be in a
minimum principal amount of $50,000 and in integral multiples thereof
(or the remaining amount of the Swingline Committed Amount, if less).
(iii) Repayment of Swingline Loans. The principal amount of
all Swingline Loans shall be due and payable on the earlier of (A) the
maturity date agreed to by the Swingline Lender and the Borrower with
respect to such Loan (which maturity date shall not be a date more than
thirty (30) Business Days from the date of advance thereof) or (B) the
Termination Date. The Swingline Lender may, at any time, in its sole
discretion, by written notice to the Borrower and the Revolving
Lenders, demand repayment of its Swingline Loans by way of a Revolving
Loan, in which case the Borrower shall be deemed to have requested a
Revolving Loan comprised solely of Base Rate Loans in the amount of
such Swingline Loans; PROVIDED, HOWEVER, that any such demand shall be
deemed to have been given one Business Day prior to the Termination
Date and on the date of the occurrence of any Event of Default
described in Section 9.1 and upon acceleration of the indebtedness
hereunder and the exercise of remedies in accordance with the
provisions of Section 9.2. Each Revolving Lender hereby irrevocably
agrees to make its pro rata share of each such Revolving Loan in the
amount, in the manner and on the date specified in the preceding
sentence NOTWITHSTANDING (I) the amount of such borrowing may not
comply with the minimum amount for advances of Revolving Loans
otherwise required hereunder, (II) whether any conditions specified in
Section 5.2 are then satisfied, (III) whether a Default or an Event of
Default then exists, (IV) failure of any such request or deemed request
for Revolving Loan to be made by the time otherwise required hereunder,
(V) whether the date of such borrowing is a date on which Revolving
Loans are otherwise permitted to be made hereunder or (VI) any
termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving
Loan cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower or
any other Credit Party), then each Revolving Lender hereby agrees that
it shall forthwith purchase (as of the date such borrowing would
otherwise have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such purchase) from the
Swingline Lender such Participation Interests in the outstanding
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Swingline Loans as shall be necessary to cause each Revolving Lender to
share in such Swingline Loans ratably based upon its Revolving
Commitment Percentage of the Revolving Committed Amount (determined
before giving effect to any termination of the Commitments pursuant to
Section 3.4 or Section 9.2), PROVIDED that (A) all interest payable on
the Swingline Loans shall be for the account of the Swingline Lender
until the date as of which the respective Participation Interest is
funded and (B) from the date of funding of the respective Participation
Interest, all interest payable on the Swingline Loans shall be shared
ratably with the Lenders which have funded their respective
Participation Interests.
(c) Interest on Swingline Loans.
Subject to the provisions of Section 3.1, each Swingline Loan shall
bear interest at a per annum rate equal to (i) if such Swingline Loan is a Base
Rate Loan, the Base Rate plus the Applicable Percentage, or (ii) if such
Swingline Loan is a Quoted Rate Swingline Loan, the Quoted Rate. Interest on
Swingline Loans shall be payable in arrears on each applicable Interest Payment
Date.
(d) Swingline Note. The Swingline Loans shall be evidenced by the
Revolving Note of the Swingline Lender.
2.4 TERM LOAN.
(a) Term Loan Commitment. Subject to the terms and conditions hereof,
each Term Lender severally agrees to make its Term Loan Commitment Percentage of
a term loan (the "Term Loan") in the aggregate principal amount of ONE HUNDRED
MILLION DOLLARS ($100,000,000) to the Borrower on the Closing Date for the
purposes hereinafter set forth. The Term Loan may consist of Base Rate Loans or
Eurodollar Loans, or a combination thereof, as the Borrower may request. Amounts
repaid on the Term Loan may not be reborrowed.
(b) Term Loan Borrowing. The Borrower shall submit an appropriate
notice of borrowing relating to the Term Loan not later than 11:00 A.M.
(Charlotte, North Carolina time) on the Closing Date, with respect to the
portion of the Term Loan initially consisting of a Base Rate Loan, or on the
third Business Day prior to the Closing Date, with respect to the portion of the
Term Loan initially consisting of one or more Eurodollar Loans, which notice of
borrowing shall be irrevocable and shall specify (i) that the funding of the
Term Loan is requested, and (ii) whether the funding of the Term Loan shall be
comprised of Base Rate Loans, Eurodollar Loans or combination thereof, and if
Eurodollar Loans are requested, the Interest Period(s) therefor. If the Borrower
shall fail to deliver such notice of borrowing to the Administrative Agent by
11:00 A.M. (Charlotte, North Carolina time) on the third Business Day prior to
the Closing Date, then the full amount of the Term Loan shall be initially
comprised of Base Rate Loans. The Administrative Agent shall give notice to each
Term Lender promptly upon receipt of such notice of borrowing pursuant to this
Section 2.4(b), of the contents thereof and each such Term Lender's share of any
borrowing to be made pursuant thereto. Each Term Lender shall make its Term Loan
Commitment Percentage of the Term Loan available to the Administrative Agent for
the account of the Borrower, or in such other manner as the Administrative Agent
may
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specify in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the
Closing Date in Dollars and in funds immediately available to the Administrative
Agent.
(c) Minimum Amounts. The Term Loan may be comprised of minimum
aggregate principal amounts of $5,000,000 in the case of Eurodollar Loans, and
$1,000,000 (or the remaining portion of the Term Loan, if less) in the case of
Base Rate Loans, and integral multiples of $50,000 (or the remaining portion of
the Term Loan, if less) in excess thereof.
(d) Repayment. The aggregate principal amount of the Term Loan shall be
repaid in twenty (20) consecutive quarterly installments as follows:
May 1, 1999 $2,500,000 November 1, 2001 $5,000,000
August 1, 1999 $2,500,000 February 1, 2002 $5,000,000
November 1, 1999 $2,500,000 May 1, 2002 $6,250,000
February 1, 2000 $2,500,000 August 1, 2002 $6,250,000
May 1, 2000 $3,750,000 November 1, 2002 $6,250,000
August 1, 2000 $3,750,000 February 1, 2003 $6,250,000
November 1, 2000 $3,750,000 May 1, 2003 $7,500,000
February 1, 2001 $3,750,000 August 1, 2003 $7,500,000
May 1, 2001 $5,000,000 November 1, 2003 $7,500,000
August 1, 2001 $5,000,000 February 1, 2004 $7,500,000
----------
$100,000,000
The foregoing amortization payments are subject to reduction as provided in
Section 3.3(b).
(e) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as the Term Loan
shall be comprised in whole or in part of Base Rate Loans, such Base
Rate Loans shall bear interest at a per annum rate equal to the sum of
the Base Rate PLUS the Applicable Percentage; and
(ii) Eurodollar Loans. During such periods as the Term
Loan shall be comprised in whole or in part of Eurodollar Loans, such
Eurodollar Loans shall bear interest at a per annum rate equal to the
sum of the Eurodollar Rate PLUS the Applicable Percentage.
Interest on the Term Loan shall be payable in arrears on each applicable
Interest Payment Date (or at such other time as may be specified herein).
(f) Term Notes. The Term Loan shall be evidenced by a duly executed
Term Note in favor of each Term Lender.
(g) Maximum Number of Eurodollar Loans. The Borrower will be limited to
a maximum number of ten (10) Eurodollar Loans outstanding at any time which are
Term Loans or Revolving Loans. For purposes hereof, Eurodollar Loans with
separate or different Interest
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Periods will be considered separate Eurodollar Loans even if their Interest
Periods expire on the same date.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per annum rate equal to 2% PLUS the
rate which would otherwise be applicable (or if no rate is applicable, whether
in respect of interest, fees or other amounts, then 2% PLUS the Base Rate), both
before and after a judgment.
3.2 EXTENSION AND CONVERSION.
Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to extend existing Loans into a subsequent
permissible Interest Period or to convert Loans into Loans of another interest
rate type; PROVIDED, HOWEVER, that (i) except as provided in Section 3.8,
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
the Interest Period applicable thereto, (ii) Eurodollar Loans may be extended,
and Base Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or conversion,
(iii) Loans extended as, or converted into, Eurodollar Loans shall be subject to
the terms of the definition of "Interest Period" set forth in Section 1.1 and
shall be in such minimum amounts as provided in, with respect to Revolving
Loans, Section 2.1(b)(ii) and, with respect to the Term Loan, Section 2.4(c),
and (iv) any request for extension of, or conversion into, a Eurodollar Loan
which shall fail to specify an Interest Period shall be deemed to be a request
for an Interest Period of one month. Each such extension or conversion shall be
effected by the Borrower by giving a Notice of Extension/Conversion (or
telephone notice promptly confirmed in writing) to the Administrative Agent
prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day of, in
the case of the conversion of a Eurodollar Loan into a Base Rate Loan, and on
the third Business Day prior to, in the case of the extension of a Eurodollar
Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of
the proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Loans to be so extended or converted, the types of
Loans into which such Loans are to be converted and, if appropriate, the
applicable Interest Periods with respect thereto. Each request for extension or
conversion shall be irrevocable and shall constitute a representation and
warranty by the Borrower of the matters specified in Section 5.2. In the event
the Borrower fails to request extension or conversion of any Eurodollar Loan in
accordance with this Section, or any such conversion or extension is not
permitted or required by this Section, then such Eurodollar Loan shall be
automatically converted into a Base Rate Loan at the end of the Interest Period
applicable thereto. The Administrative Agent shall give each Lender notice as
promptly as practicable of any such proposed extension or conversion affecting
any Loan.
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3.3 PREPAYMENTS.
(a) Voluntary Prepayments. Loans hereunder may be prepaid in whole or
in part without premium or penalty; PROVIDED that (i) Eurodollar Loans may be
prepaid only upon three (3) Business Days' prior written notice to the
Administrative Agent and must be accompanied by payment of any amounts owing
under Section 3.11, and (ii) partial prepayments shall be in minimum principal
amounts of $5,000,000, in the case of Eurodollar Loans, and $1,000,000, in the
case of Base Rate Loans, and in integral multiples of $1,000,000 in excess
thereof. Voluntary prepayments on the Revolving Obligations may be reborrowed in
accordance with the provisions hereof. Voluntary prepayments on the Term Loan
may not be reborrowed.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time, (A) the
aggregate principal amount of Revolving Obligations shall exceed the
Aggregate Revolving Committed Amount, (B) the aggregate amount of LOC
Obligations shall exceed the LOC Committed Amount, or (C) the aggregate
amount of Swingline Loans shall exceed the Swingline Committed Amount,
the Borrower shall immediately make payment on the Revolving Loans, the
Swingline Loans and/or to a cash collateral account in respect of the
LOC Obligations, in an amount sufficient to eliminate the excess.
(ii) Asset Dispositions. The Borrower shall promptly prepay
the Loans as hereafter provided in an amount equal to one hundred
percent (100%) of the Net Proceeds received from Asset Dispositions to
the extent (A) such Net Proceeds are not reinvested in the same or
similar property or assets within twelve months of the date of sale,
lease, disposition, casualty, theft or loss which gave rise to the
Asset Disposition, and (B) the aggregate amount of such Net Proceeds
not reinvested in accordance with the foregoing subsection (A) shall
exceed $5,000,000 in any fiscal year.
(c) Application. Mandatory prepayments made pursuant to Section
3.3(b)(ii) shall be applied first to the Term Loans and shall be applied to
principal installments due with respect to the Term Loan in the inverse order of
principal installment maturity. After the Term Loans are paid in full, mandatory
prepayments made pursuant to Section 3.3(b)(ii) shall be applied to the
Revolving Obligations (with a corresponding permanent reduction in the Aggregate
Revolving Committed Amount). Mandatory and voluntary prepayments made in respect
of Revolving Obligations hereunder shall be applied first to Swingline Loans,
then to Revolving Loans which are Base Rate Loans, then to Revolving Loans which
are Eurodollar Loans in direct order of Interest Period maturities, and then to
a cash collateral account to secure LOC Obligations. Voluntary prepayments on
the Term Loan shall be applied to, and serve to reduce, the remaining principal
amortization installments ratably. Amounts prepaid in respect of the Revolving
Obligations hereunder may be reborrowed in accordance with the provisions
hereof. Amounts prepaid on the Term Loan may not be reborrowed.
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3.4 REDUCTION OF COMMITMENTS AND TERMINATION OF COMMITMENTS.
(a) Voluntary Reductions of Commitments. The Revolving Commitments may
be terminated or permanently reduced by the Borrower in whole or in part upon
three (3) Business Days' prior written notice to the Administrative Agent (which
shall promptly notify each of the Revolving Lenders), PROVIDED that (i) after
giving effect to any voluntary reduction the aggregate amount of Revolving
Obligations shall not exceed the Aggregate Revolving Committed Amount, as
reduced, and (ii) partial reductions shall be in a minimum principal amount of
$5,000,000, and in integral multiples of $1,000,000 in excess thereof.
(b) Mandatory Reduction of Commitments. On any date that the Revolving
Loans are required to be prepaid pursuant to the terms of Section 3.3(b)(ii),
the Aggregate Revolving Committed Amount automatically shall be permanently
reduced by the amount of such required prepayment.
(c) Termination of Commitments. The Commitments hereunder shall
terminate on the Termination Date.
3.5 FEES.
(a) Unused Fee. In consideration of the Revolving Commitments
hereunder, the Borrower agrees to pay to the Administrative Agent for the
ratable benefit of the Revolving Lenders an unused fee (the "Unused Fee") equal
to the Applicable Percentage per annum on the average daily unused amount of the
Revolving Committed Amount for the applicable period. The Unused Fee shall be
payable quarterly in arrears on the 15th day following the last day of each
fiscal quarter for the immediately preceding fiscal quarter (or portion thereof)
beginning with the first such date to occur after the Closing Date (as well as
on the Termination Date and on any date that the Aggregate Revolving Committed
Amount is reduced). For purposes of computation of the Unused Fee, Swingline
Loans shall not be counted toward or considered usage of the Revolving Committed
Amount.
(b) Letter of Credit Fees.
(i) Letter of Credit Fee. In consideration of the LOC
Commitment hereunder, the Borrower agrees to pay to the Administrative
Agent for the ratable benefit of the Revolving Lenders a fee (the
"Letter of Credit Fee") equal to the Applicable Percentage per annum on
the average daily maximum amount available to be drawn under Letters of
Credit from the date of issuance to the date of expiration. The Letter
of Credit Fee shall be payable quarterly in arrears on the 15th day
following the last day of each calendar quarter for the immediately
preceding quarter (or portion thereof) beginning with the first such
date to occur after the Closing Date (as well as on the Termination
Date).
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(ii) Issuing Lender Fee. In addition to the Letter of Credit
Fee, the Borrower agrees to pay to the Issuing Lender for its own
account without sharing by the other Lenders (A) a fronting and
negotiation fee of 0.125% per annum on the average daily maximum amount
available to be drawn under Letters of Credit issued by it from the
date of issuance to the date of expiration and (B) customary charges of
the Issuing Lender with respect to the issuance, amendment, transfer,
administration, cancellation and conversion of, and drawings under,
such Letters of Credit (collectively, the "Issuing Lender Fees"). The
Issuing Lender Fees shall be payable quarterly in arrears on the 15th
day following the last day of each calendar quarter for the immediately
preceding quarter (or portion thereof) beginning with the first such
date to occur after the Closing Date (as well as on the Termination
Date).
(c) Administrative Agent's Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, an annual administrative fee and such
other fees, if any, referred to in the Administrative Agent's Fee Letter
(collectively, the "Administrative Agent's Fees").
3.6 CAPITAL ADEQUACY.
If any Lender has determined, after the date hereof, that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets as a consequence of its commitments or
obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's policies with respect to capital adequacy), then,
upon notice from such Lender to the Borrower, the Borrower shall be obligated to
pay to such Lender such additional amount or amounts as will compensate such
Lender for such reduction; PROVIDED, HOWEVER, that a Lender shall not request
any amounts hereunder unless it is generally requesting amounts under comparable
provisions from similarly situated borrowers. Each determination by any such
Lender of amounts owing under this Section shall, absent manifest error, be
conclusive and binding on the parties hereto.
3.7 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any Interest Period, the Administrative
Agent shall have determined (which determination shall be conclusive and binding
upon the Borrower) that, by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate for such Interest Period, the Administrative Agent shall give
telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter (which notice shall be withdrawn by the Administrative
Agent whenever such circumstances no longer exist). If such notice is given (a)
any Eurodollar Loans requested to be
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made on the first day of such Interest Period shall be made as Base Rate Loans
and (b) any Loans that were to have been converted on the first day of such
Interest Period to or extended as Eurodollar Loans shall be converted to or
extended as Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further Eurodollar Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Base Rate Loans to
Eurodollar Loans.
3.8 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date shall make it unlawful for any Lender to make
or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such
Lender shall promptly give written notice of such circumstances to the Borrower
and the Administrative Agent (which notice shall be withdrawn by such Lender
whenever such circumstances no longer exist), (b) the commitment of such Lender
hereunder to make Eurodollar Loans, extend Eurodollar Loans as such and convert
a Base Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such
time as it shall no longer be unlawful for such Lender to make or maintain
Eurodollar Loans, such Lender shall then have a commitment only to make a Base
Rate Loan when a Eurodollar Loan is requested and (c) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall be converted automatically to
Base Rate Loans on the respective last days of the then current Interest Periods
with respect to such Loans or within such earlier period as required by law. If
any such conversion of a Eurodollar Loan occurs on a day which is not the last
day of the then current Interest Period with respect thereto, the Borrower shall
pay to such Lender such amounts, if any, as may be required pursuant to Section
3.11.
3.9 REQUIREMENTS OF LAW.
If, after the date hereof, the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable to
any Lender, or compliance by any Lender with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority, in each case made subsequent to the Closing Date (or, if later, the
date on which such Lender becomes a Lender):
(a) shall subject such Lender to any tax of any kind whatsoever with
respect to any Letter of Credit, any Eurodollar Loans made by it or its
obligation to make Eurodollar Loans, or change the basis of taxation of payments
to such Lender in respect thereof (except for (i) Non-Excluded Taxes covered by
Section 3.10 (including Non-Excluded Taxes imposed solely by reason of any
failure of such Lender to comply with its obligations under Section 3.10(b)) and
(ii) changes in taxes measured by or imposed upon the overall net income, or
franchise tax (imposed in lieu of such net income tax), of such Lender or its
applicable lending office, branch, or any affiliate thereof));
(b) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances, loans or other
extensions of credit by, or any other
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acquisition of funds by, any office of such Lender which is not otherwise
included in the determination of the Eurodollar Rate hereunder; or
(c) shall impose on such Lender any other condition (excluding any tax
of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
extending or maintaining Eurodollar Loans or issuing or participating in Letters
of Credit or to reduce any amount receivable hereunder in respect thereof, then,
in any such case, upon notice to the Borrower from such Lender, through the
Administrative Agent, in accordance herewith, the Borrower shall be obligated to
promptly pay such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount receivable;
PROVIDED that a Lender shall not request any amounts hereunder unless it is
generally requesting amounts under comparable provisions from similarly situated
borrowers; PROVIDED, FURTHER, that in any such case, the Borrower may elect to
convert the Eurodollar Loans made by such Lender hereunder to Base Rate Loans by
giving the Administrative Agent at least one Business Day's notice of such
election, in which case the Borrower shall promptly pay to such Lender, upon
demand, without duplication, such amounts, if any, as may be required pursuant
to Section 3.11. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section 3.9, it shall provide prompt notice thereof to the
Borrower, through the Administrative Agent, certifying (x) that one of the
events described in this paragraph (a) has occurred and describing in reasonable
detail the nature of such event, (y) as to the increased cost or reduced amount
resulting from such event and (z) as to the additional amount demanded by such
Lender and a reasonably detailed explanation of the calculation thereof. Such a
certificate as to any additional amounts payable pursuant to this Section 3.9
submitted by such Lender, through the Administrative Agent, to the Borrower
shall be conclusive and binding on the parties hereto in the absence of manifest
error. This covenant shall survive the termination of this Credit Agreement and
the payment of the Loans and all other amounts payable hereunder.
3.10 TAXES.
(a) Except as provided below in this subsection (a), all payments made
by the Borrower under this Credit Agreement and any Notes shall be made free and
clear of, and without deduction or withholding for or on account of, any present
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any court, or governmental body, agency or other
official, excluding taxes measured by or imposed upon the overall net income of
any Lender or its applicable lending office, or any branch or affiliate thereof,
and all franchise taxes, branch taxes, taxes on doing business or taxes on the
overall capital or net worth of any Lender or its applicable lending office, or
any branch or affiliate thereof, in each case imposed in lieu of net income
taxes, imposed: (i) by the jurisdiction under the laws of which such Lender,
applicable lending office, branch or affiliate is organized or is located, or in
which its principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii) by reason
of any connection between the jurisdiction imposing such tax and such Lender,
applicable lending office, branch or affiliate other than a connection arising
solely from such Lender having
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executed, delivered or performed its obligations, or received payment under or
enforced, this Credit Agreement or any Notes. If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("Non-Excluded Taxes") are required to be withheld from any amounts payable to
the Administrative Agent or any Lender hereunder or under any Notes, (A) the
amounts so payable to the Administrative Agent or such Lender shall be increased
to the extent necessary to yield to the Administrative Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Credit
Agreement and any Notes, PROVIDED, HOWEVER, that the Borrower shall be entitled
to deduct and withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Lender that is not organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this Section 3.10 whenever any
Non-Excluded Taxes are payable by the Borrower, and (B) as promptly as possible
thereafter the Borrower shall send to the Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Administrative Agent or any
Lender as a result of any such failure. The agreements in this subsection shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof shall:
(X)(i) on or before the date of any payment by the Borrower
under this Credit Agreement or Notes to such Lender, deliver to the
Borrower and the Administrative Agent (A) two (2) duly completed copies
of United States Internal Revenue Service Form 1001 or 4224, or
successor applicable form, as the case may be, certifying that it is
entitled to receive payments under this Credit Agreement and any Notes
without deduction or withholding of any United States federal income
taxes and (B) an Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be, certifying that it is entitled to
an exemption from United States backup withholding tax;
(ii) deliver to the Borrower and the Administrative Agent two
(2) further copies of any such form or certification on or before the
date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most
recent form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Borrower or the Administrative Agent; or
(Y) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (i)
represent to the Borrower (for the
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benefit of the Borrower and the Administrative Agent) that it is not a
bank within the meaning of Section 881(c)(3)(A) of the Internal Revenue
Code, (ii) agree to furnish to the Borrower on or before the date of
any payment by the Borrower, with a copy to the Administrative Agent
two (2) accurate and complete original signed copies of Internal
Revenue Service Form W-8, or successor applicable form certifying to
such Lender's legal entitlement at the date of such certificate to an
exemption from U.S. withholding tax under the provisions of Section
881(c) of the Internal Revenue Code with respect to payments to be made
under this Credit Agreement and any Notes (and to deliver to the
Borrower and the Administrative Agent two (2) further copies of such
form on or before the date it expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recently
provided form and, if necessary, obtain any extensions of time
reasonably requested by the Borrower or the Administrative Agent for
filing and completing such forms), and (iii) agree, to the extent
legally entitled to do so, upon reasonable request by the Borrower, to
provide to the Borrower (for the benefit of the Borrower and the
Administrative Agent) such other forms as may be reasonably required in
order to establish the legal entitlement of such Lender to an exemption
from withholding with respect to payments under this Credit Agreement
and any Notes;
unless in any such case any change in treaty, law or regulation has occurred
after the date such Person becomes a Lender hereunder which renders all such
forms inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent. Each Person that shall become a Lender or
a participant of a Lender pursuant to Section 11.3 shall, upon the effectiveness
of the related transfer, be required to provide all of the forms, certifications
and statements required pursuant to this subsection, PROVIDED that in the case
of a participant of a Lender the obligations of such participant of a Lender
pursuant to this subsection (b) shall be determined as if the participant of a
Lender were a Lender except that such participant of a Lender shall furnish all
such required forms, certifications and statements to the Lender from which the
related participation shall have been purchased.
(c) If the Borrower is required to pay additional amounts to the
Administrative Agent or any Lender pursuant to Section 3.10(a), then the
Administrative Agent or such Lender shall use reasonable efforts (consistent
with legal and regulatory restrictions) to change the jurisdiction of its
lending office so as to eliminate or reduce to the greatest extent possible any
such additional payment by the Borrower which may thereafter accrue.
3.11 INDEMNITY.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or extension of Eurodollar Loans or Quoted Rate Swingline Loans after the
Borrower has given a notice requesting the same in accordance with the
provisions of this Credit Agreement, (b) default by the Borrower in making any
prepayment of a Eurodollar Loan or a Quoted Rate Swingline Loan after the
Borrower has given a notice thereof in accordance with the
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provisions of this Credit Agreement or (c) the making of a prepayment or
conversion of Eurodollar Loans or Quoted Rate Swingline Loans on a day which is
not the last day of an Interest Period with respect thereto. With respect to
Eurodollar Loans, such indemnification may include an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on the
amount so prepaid or converted, or not so borrowed, converted or extended, for
the period from the date of such prepayment or conversion or of such failure to
borrow, convert or extend to the last day of the applicable Interest Period (or,
in the case of a failure to borrow, convert or extend, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Loans provided for herein (excluding, however, the
Applicable Percentage included therein, if any) over (ii) the amount of interest
(as reasonably determined by such Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable period
with leading banks in the London interbank Eurodollar market. If any Lender
becomes entitled to claim any additional amounts pursuant to this Section 3.11,
it shall provide prompt notice thereof to the Borrower, through the
Administrative Agent, certifying as to the additional amount demanded by such
Lender and a reasonably detailed explanation of the calculation thereof. Such a
certificate as to any additional amounts payable pursuant to this Section 3.11
submitted by such Lender, through the Administrative Agent, to the Borrower
shall be conclusive and binding on the parties hereto in the absence of manifest
error. The covenants of the Borrower set forth in this Section 3.11 shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
3.12 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Revolving Loan, each payment or prepayment of principal
of any Revolving Loan (other than Swingline Loans) or reimbursement obligations
arising from drawings under Letters of Credit, each payment of interest on the
Revolving Loans or reimbursement obligations arising from drawings under Letters
of Credit, each payment of Unused Fees, each payment of the Letter of Credit
Fee, each reduction of the Revolving Committed Amount and each conversion or
extension of any Revolving Loan (other than Swingline Loans), shall be allocated
pro rata among the Revolving Lenders in accordance with the respective Revolving
Commitment Percentages. With respect to the Term Loan, each payment or
prepayment of principal on the Term Loan, each payment of interest thereon, and
each conversion or extension of any Loan comprising the Term Loan, shall be
allocated pro rata among the Term Lenders in accordance with the respective Term
Loan Commitment Percentages.
(b) Advances. No Lender shall be responsible for the failure or delay
by any other Lender in its obligation to make its ratable share of a borrowing
hereunder; PROVIDED, HOWEVER, that the failure of any Lender to fulfill its
obligations hereunder shall not relieve any other Lender of its obligations
hereunder. Unless the Administrative Agent shall have been notified in writing
by any Lender prior to a borrowing that such Lender will not make the amount
that would constitute its ratable share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
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corresponding amount. If such amount is not made available to the Administrative
Agent by such Lender within the time period specified therefor hereunder, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the Federal Funds Rate for a period of three
(3) Business Days, and thereafter at the Base Rate, for the period until such
Lender makes such amount immediately available to the Administrative Agent. If
such Lender does not pay such amounts to the Administrative Agent forthwith upon
demand, the Administrative Agent may notify the Borrower and request the
Borrower to immediately pay such amount to the Administrative Agent with
interest at the Base Rate. A certificate of the Administrative Agent submitted
to any Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence of manifest error.
3.13 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan, LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of Title 11 of the United States Code or other security
or interest arising from, or in lieu of, such secured claim, received by such
Lender under any applicable bankruptcy, insolvency or other similar law or
otherwise, or by any other means, in excess of its pro rata share of such
payment as provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a participation in such Loans, LOC Obligations
and other obligations in such amounts, and make such other adjustments from time
to time, as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a participation theretofore sold, return
its share of that benefit (together with its share of any accrued interest
payable with respect thereto) to each Lender whose payment shall have been
rescinded or otherwise restored. The Borrower agrees that any Lender so
purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including setoff, banker's lien or counterclaim,
with respect to such participation as fully as if such Lender were a holder of
such Loan, LOC Obligations or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or the Administrative Agent shall fail to remit to the
Administrative Agent or any Lender an amount payable by such Lender or the
Administrative Agent to the Administrative Agent or such other Lender pursuant
to this Credit Agreement on the date when such amount is due, such payments
shall be made together with interest thereon for each date from the date such
amount is due until the date such amount is paid to the Administrative Agent or
such other Lender at a rate per annum equal to the Federal Funds Rate. If under
any applicable bankruptcy, insolvency or other similar law, any Lender receives
a secured claim in lieu of a setoff to which this Section 3.13 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders under this
Section 3.13 to share in the benefits of any recovery on such secured claim.
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3.14 PAYMENTS, COMPUTATIONS, ETC.
(a) Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Administrative Agent in Dollars in immediately
available funds, without setoff, deduction, counterclaim or withholding of any
kind, at the Administrative Agent's office specified in Section 11.1 not later
than 12:00 Noon (Charlotte, North Carolina time) on the date when due. Payments
received after such time shall be deemed to have been received on the next
succeeding Business Day. The Administrative Agent may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the Borrower maintained with the
Administrative Agent (with notice to the Borrower PROVIDED that failure to give
such notice to the Borrower shall not affect the validity of such debit). The
Borrower shall, at the time it makes any payment under this Credit Agreement,
specify to the Administrative Agent the Loans, LOC Obligations, Fees, interest
or other amounts payable by the Borrower hereunder to which such payment is to
be applied (and in the event that it fails so to specify, or if such application
would be inconsistent with the terms hereof, the Administrative Agent shall
distribute such payment to the Lenders in such manner as the Administrative
Agent may determine to be appropriate in respect of obligations owing by the
Borrower hereunder, subject to the terms of Section 3.12(a)). The Administrative
Agent will distribute such payments to such Lenders, if any such payment is
received prior to 12:00 Noon (Charlotte, North Carolina time) on a Business Day
in like funds as received prior to the end of such Business Day and otherwise
the Administrative Agent will distribute such payment to such Lenders on the
next succeeding Business Day. Whenever any payment hereunder shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day (subject to accrual of interest and
Fees for the period of such extension), except that in the case of Eurodollar
Loans, if the extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next preceding
Business Day. Except as expressly provided otherwise herein, all computations of
interest and fees shall be made on the basis of the actual number of days
elapsed over a year of 360 days, except with respect to computation of interest
on Base Rate Loans and Swingline Loans which (unless the Base Rate is determined
by reference to the Federal Funds Rate) shall be calculated based on a year of
365 or 366 days, as appropriate. Interest shall accrue from and include the date
of borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default. Notwithstanding any
other provisions of this Credit Agreement to the contrary, after the occurrence
and during the continuance of an Event of Default, all amounts collected or
received by the Administrative Agent or any Lender on account of the Obligations
or any other amounts outstanding under any of the Credit Documents shall be paid
over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Administrative Agent in connection with enforcing the rights of
the Lenders under the Credit Documents;
SECOND, to payment of any fees owed to the Administrative
Agent;
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THIRD, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation, reasonable attorneys' fees)
of each of the Lenders in connection with enforcing its rights under
the Credit Documents or otherwise with respect to the Obligations owing
to such Lender;
FOURTH, to the payment of all accrued interest and fees on or
in respect of the Obligations;
FIFTH, to the payment of the outstanding principal amount of
the Obligations (including the payment or cash collateralization of the
outstanding LOC Obligations) and all liabilities and obligations owing
by the Borrower under any Hedging Agreements;
SIXTH, to all other Obligations and other obligations which
shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH"
above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii) each of the Lenders shall receive an amount equal
to its pro rata share (based on the proportion that the then outstanding
Obligations held by such Lender bears to the aggregate then outstanding
Obligations) of amounts available to be applied pursuant to clauses "THIRD",
"FOURTH", "FIFTH" and "SIXTH" above; and (iii) to the extent that any amounts
available for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Administrative Agent in a cash collateral account and
applied (A) first, to reimburse the Issuing Lender for any drawings under such
Letters of Credit and (B) then, following the expiration of all Letters of
Credit, to all other obligations of the types described in clauses "FIFTH" and
"SIXTH" above in the manner provided in this Section 3.14(b).
3.15 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts evidencing each
Loan made by such Lender to the Borrower from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Credit Agreement. Each Lender will make reasonable efforts to
maintain the accuracy of its account or accounts and to promptly update its
account or accounts from time to time, as necessary.
(b) The Administrative Agent shall maintain the Register pursuant to
Section 11.3(c), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount, type and Interest
Period of each Loan hereunder, (ii) the amount of any principal or interest due
and payable or to become due and payable to each Lender hereunder and (iii) the
amount of any sum received by the Administrative Agent hereunder from or for the
account of the Borrower and each Lender's share thereof. The Administrative
Agent will make reasonable
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efforts to maintain the accuracy of the subaccounts referred to in the preceding
sentence and to promptly update such subaccounts from time to time, as
necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.15 (and, if consistent
with the entries of the Administrative Agent, subsection (a)) shall be prima
facie evidence of the existence and amounts of the obligations of the Borrower
therein recorded; PROVIDED, HOWEVER, that the failure of any Lender or the
Administrative Agent to maintain any such account, such Register or such
subaccount, as applicable, or any error therein, shall not in any manner affect
the obligation of the Borrower to repay the Loans and other obligations owing to
such Lender in accordance with the terms hereof.
SECTION 4
GUARANTY
4.1 THE GUARANTEE.
Each of the Guarantors hereby jointly and severally guarantees to each
Lender, to each Affiliate of a Lender that enters into a Hedging Agreement and
to the Administrative Agent as hereinafter provided the prompt payment of the
Guaranteed Obligations in full when due (whether at stated maturity, as a
mandatory prepayment, by acceleration, as mandatory cash collateralization or
otherwise) strictly in accordance with the terms thereof. The Guarantors hereby
further agree that if any of the Guaranteed Obligations are not paid in full
when due (whether at stated maturity, as a mandatory prepayment, by
acceleration, as mandatory cash collateralization or otherwise), the Guarantors
will, jointly and severally, promptly pay the same, without any demand or notice
whatsoever, and that in the case of any extension of time of payment or renewal
of any of the Guaranteed Obligations, the same will be promptly paid in full
when due (whether at extended maturity, as a mandatory prepayment, by
acceleration or otherwise) in accordance with the terms of such extension or
renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents or Hedging Agreements, to the extent the
obligations of a Guarantor shall be adjudicated to be invalid or unenforceable
for any reason (including, without limitation, because of any applicable state
or federal law relating to fraudulent conveyances or transfers) then the
obligations of such Guarantor hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).
4.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors under Section 4.1 are joint and
several, absolute, irrevocable and unconditional, irrespective of the value,
genuineness, validity, regularity or enforceability of any of the Credit
Documents or Hedging Agreements, or any other agreement or instrument referred
to therein, or any substitution, release or exchange of any other guarantee of
or security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable
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law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section 4.2 that the obligations of the Guarantors
hereunder shall be absolute, irrevocable and unconditional under any and all
circumstances. Each Guarantor agrees that such Guarantor shall have no right of
subrogation, indemnity, reimbursement or contribution against the Borrower or
any other Guarantor of the Guaranteed Obligations for amounts paid under this
Section 4 until such time as the Lenders (and any Affiliates of Lenders entering
into Hedging Agreements) have been paid in full, all Commitments under the
Credit Agreement have been terminated and no Person or Governmental Authority
shall have any right to request any return or reimbursement of funds from the
Lenders in connection with monies received under the Credit Documents or Hedging
Agreements. Without limiting the generality of the foregoing, it is agreed that,
to the fullest extent permitted by law, the occurrence of any one or more of the
following shall not alter or impair the liability of any Guarantor hereunder
which shall remain absolute, irrevocable and unconditional as described above:
(i) at any time or from time to time, without notice to any
Guarantor, the time for any performance of or compliance with any of
the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of any
of the Credit Documents, any Hedging Agreement or any other agreement
or instrument referred to in the Credit Documents or Hedging Agreements
shall be done or omitted;
(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under any of the
Credit Documents, any Hedging Agreement or any other agreement or
instrument referred to in the Credit Documents or Hedging Agreements
shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in
whole or in part or otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Administrative
Agent or any Lender or Lenders as security for any of the Guaranteed
Obligations shall fail to attach or be perfected; or
(v) any of the Guaranteed Obligations shall be determined to
be void or voidable (including, without limitation, for the benefit of
any creditor of any Guarantor) or shall be subordinated to the claims
of any Person (including, without limitation, any creditor of any
Guarantor).
With respect to its obligations hereunder, each Guarantor hereby expressly
waives diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Administrative Agent or any Lender
exhaust any right, power or remedy or proceed against any Person under any of
the Credit Documents, any Hedging Agreement or any other agreement or instrument
referred to in the Credit Documents or Hedging Agreements, or against any other
Person under any other guarantee of, or security for, any of the Guaranteed
Obligations.
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4.3 REINSTATEMENT.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Guaranteed Obligations is rescinded
or must be otherwise restored by any holder of any of the Guaranteed
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify,
without duplication, the Administrative Agent and each Lender on demand for all
reasonable costs and expenses (including, without limitation, fees and expenses
of counsel) incurred by the Administrative Agent or such Lender in connection
with such rescission or restoration, including any such costs and expenses
incurred in defending against any claim alleging that such payment constituted a
preference, fraudulent transfer or similar payment under any bankruptcy,
insolvency or similar law.
4.4 CERTAIN ADDITIONAL WAIVERS.
Each Guarantor further agrees that such Guarantor shall have no right
of recourse to security for the Guaranteed Obligations, except through the
exercise of the rights of subrogation pursuant to Section 4.2.
4.5 REMEDIES.
The Guarantors agree that, to the fullest extent permitted by law, as
between the Guarantors, on the one hand, and the Administrative Agent and the
Lenders, on the other hand, the Guaranteed Obligations may be declared to be
forthwith due and payable as provided in Section 9.2 (and shall be deemed to
have become automatically due and payable in the circumstances provided in said
Section 9.2) for purposes of Section 4.1 notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing the Guaranteed
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or the Guaranteed Obligations
being deemed to have become automatically due and payable), the Guaranteed
Obligations (whether or not due and payable by any other Person) shall forthwith
become due and payable by the Guarantors for purposes of said Section 4.1.
4.6 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
succeeding provisions of this Section 4.6), pay to such Excess Funding Guarantor
an amount equal to such Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, assets,
liabilities and debts of such Excess Funding Guarantor) of such Excess Payment
(as defined below). The payment obligation of any Guarantor to any Excess
Funding Guarantor under this Section 4.6 shall be subordinate and subject in
right of payment to the prior payment in full of the obligations of such
Guarantor under the other provisions of this Section 4, and such Excess Funding
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of
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all of such obligations. For purposes hereof, (i) "Excess Funding Guarantor"
shall mean, in respect of any obligations arising under the other provisions of
this Section 4 (hereafter, the "Guarantied Obligations"), a Guarantor that has
paid an amount in excess of its Pro Rata Share of the Guarantied Obligations;
(ii) "Excess Payment" shall mean, in respect of any Guarantied Obligations, the
amount paid by an Excess Funding Guarantor in excess of its Pro Rata Share of
such Guarantied Obligations; and (iii) "Pro Rata Share", for the purposes of
this Section 4.6, shall mean, for any Guarantor, the ratio (expressed as a
percentage) of (a) the amount by which the aggregate present fair saleable value
of all of its assets and properties exceeds the amount of all debts and
liabilities of such Guarantor (including contingent, subordinated, unmatured,
and unliquidated liabilities, but excluding the obligations of such Guarantor
hereunder) to (b) the amount by which the aggregate present fair saleable value
of all assets and other properties of the Borrower and all of the Guarantors
exceeds the amount of all of the debts and liabilities (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of the Borrower and the Guarantors hereunder) of the Borrower and
all of the Guarantors, all as of the Closing Date (if any Guarantor becomes a
party hereto subsequent to the Closing Date, then for the purposes of this
Section 4.6 such subsequent Guarantor shall be deemed to have been a Guarantor
as of the Closing Date and the information pertaining to, and only pertaining
to, such Guarantor as of the date such Guarantor became a Guarantor shall be
deemed true as of the Closing Date).
4.7 CONTINUING GUARANTEE.
The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Guaranteed Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 CONDITIONS TO CLOSING.
This Credit Agreement shall become effective, and the initial
Extensions of Credit may be made, upon the satisfaction of the following
conditions precedent:
(a) Execution of Credit Agreement and Credit Documents. Receipt by the
Administrative Agent of (i) multiple counterparts of this Credit Agreement, (ii)
a Revolving Note for each Revolving Lender, (iii) a Term Note for each Term
Lender and (iv) multiple counterparts of the Pledge Agreement, in each case
executed by a duly authorized officer of each party thereto and in each case
conforming to the requirements of this Credit Agreement.
(b) Legal Opinions. Receipt by the Administrative Agent of multiple
counterparts of opinions of counsel for the Credit Parties relating to the
Credit Documents and the transactions contemplated therein, in form and
substance satisfactory to the Administrative Agent and the Required Lenders.
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(c) Financial Information. Receipt by the Lenders of financial
information regarding the Borrower and its subsidiaries and regarding the
businesses acquired in connection with the Specialty Battery Division
Acquisition, as may be requested by, and in each case in form and substance
satisfactory to, the Administrative Agent and the Lenders.
(d) Environmental Reports. Receipt by the Administrative Agent of
copies of environmental assessment reports and other material environmental
documentation, if any, relating to the Subject Properties (including, without
limitation, such reports and documentation relating to the properties acquired
in connection with the Specialty Battery Division Acquisition) and properties
leased by the Borrower and its Subsidiaries, which reports and documentation
shall be in form and detail reasonably satisfactory to the Administrative Agent
and the Required Lenders.
(e) Evidence of Insurance. Receipt by the Administrative Agent of
insurance certificates or policies evidencing flood hazard insurance (for
improvements located in areas having "special flood hazards"), casualty
insurance (including builders' risk and all-risk permanent policies) and
liability conforming to the requirements of this Credit Agreement and the other
Credit Documents, showing the Administrative Agent as loss payee with respect to
the flood hazard and casualty insurance and as additional insured with respect
to the liability insurance, together with evidence of payment of premiums
thereon.
(f) Absence of Legal Proceedings. The absence of any action, suit,
investigation or proceeding pending in any court or before any arbitrator or
governmental instrumentality which could reasonably be expected to have a
Material Adverse Effect.
(g) Corporate Documents. Receipt by the Administrative Agent of the
following (or their equivalent) for each of the Credit Parties:
(i) Articles of Incorporation. Copies of the articles of
incorporation or charter documents certified to be true and complete as
of a recent date by the appropriate governmental authority of the state
of its incorporation.
(ii) Resolutions. Copies of resolutions of the Board of
Directors approving and adopting the respective Credit Documents and
the transactions contemplated therein and authorizing execution and
delivery thereof, certified by a secretary or assistant secretary as of
the Closing Date to be true and correct and in force and effect as of
such date.
(iii) Bylaws. Copies of the bylaws certified by a secretary or
assistant secretary as of the Closing Date to be true and correct and
in force and effect as of such date.
(iv) Good Standing. Copies, where applicable, of (A)
certificates of good standing, existence or its equivalent certified as
of a recent date by the appropriate governmental authorities of the
state of incorporation and each other state in which the
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failure to qualify and be in good standing would have a material
adverse effect on the business or operations in such state and (B) a
certificate indicating payment of all corporate franchise taxes
certified as of a recent date by the appropriate governmental taxing
authorities.
(v) Officer's Certificate. An officer's certificate for each
of the Credit Parties dated as of the Closing Date substantially in the
form of Schedule 5.1(g)(v) with appropriate insertions and attachments.
(h) Purchase Agreement. Receipt by the Administrative Agent of the
final Purchase Agreement, together with all exhibits and schedules thereto,
certified by an officer of the Borrower.
(i) Consummation of the Specialty Battery Division Acquisition. Receipt
by the Administrative Agent of evidence of consummation of the Specialty Battery
Division Acquisition substantially on the terms and conditions provided in the
Purchase Agreement (including satisfaction of the conditions set forth therein
in all material respects, other than remittance of cash consideration). There
shall not have been any material modification, amendment, supplement or waiver
to the Purchase Agreement without the prior written consent of all the Lenders,
including, but not limited to, any modification, amendment, supplement or waiver
relating to all disclosure schedules and exhibits.
(j) Consent. Receipt by the Administrative Agent of evidence that all
governmental, shareholder and material third party consents (including
Hart-Scott-Rodino clearance) and approvals necessary or desirable in connection
with the Specialty Battery Division Acquisition and the related financings and
other transactions contemplated hereby and expiration of all applicable waiting
periods without any action being taken by any authority that could reasonably be
likely to restrain, prevent or impose any material adverse conditions on the
Specialty Battery Division Acquisition or such other transactions contemplated
hereby or that could reasonably be likely to seek or threaten any of the
foregoing, and no law or regulation shall be applicable which in the judgment of
the Administrative Agent could reasonably be likely to have such effect.
(k) Fees. Receipt of all fees, if any, owing pursuant to the Agents'
Fee Letter, Section 3.5 or otherwise.
(l) Section 5.2 Conditions. The conditions specified in Section 5.2
shall be satisfied.
(m) Additional Matters. All other documents and legal matters in
connection with the transactions contemplated by this Credit Agreement shall be
reasonably satisfactory in form and substance to the Administrative Agent and
the Required Lenders.
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5.2 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligation of each Lender to make any Extension of Credit hereunder
(including the initial Extension of Credit to be made hereunder) is subject to
the satisfaction of the following conditions precedent on the date of making
such Extension of Credit:
(a) Representations and Warranties. The representations and warranties
made by the Credit Parties herein and in the other Credit Documents or which are
contained in any certificate furnished at any time under or in connection
herewith shall be true and correct in all material respects on and as of the
date of such Extension of Credit as if made on and as of such date (except for
those which expressly relate to an earlier date).
(b) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on such date or after giving effect to the
Extension of Credit to be made on such date unless such Default or Event of
Default shall have been waived in accordance with this Credit Agreement.
(c) Involuntary Bankruptcy or Insolvency. There shall not have been
commenced against any of the Credit Parties an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or any case, proceeding or other action for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or for the
winding up or liquidation of its affairs, and shall remain undismissed,
undischarged or unbonded.
(d) No Material Adverse Effect. No circumstances, events or conditions
shall have occurred since the date of the audited financial statements
referenced in Section 6.1 which would have a Material Adverse Effect.
(e) Additional Conditions to Revolving Loans. If a Revolving Loan is
made pursuant to Section 2.1, all conditions set forth therein shall have been
satisfied.
(f) Additional Conditions to Letters of Credit. If a Letter of Credit
is issued pursuant to Section 2.2, all conditions set forth therein shall have
been satisfied.
(g) Additional Conditions to Swingline Loans. If a Swingline Loan is
made pursuant to Section 2.3, all conditions set forth therein shall have been
satisfied.
(h) Additional Conditions to the Term Loan. If the Term Loan is made
pursuant to Section 2.4, all conditions set forth therein shall have been
satisfied.
Each request for an Extension of Credit (including extensions and
conversions) and each acceptance by the Borrower of an Extension of Credit
(including extensions and conversions) shall be deemed to constitute a
representation and warranty by the Borrower as of the date of
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such Extension of Credit that the applicable conditions in paragraphs (a), (b),
(c) and (d), and in (e), (f), (g) or (h), of this Section 5.2 have been
satisfied.
SECTION 6
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Credit Agreement and to make
Extensions of Credit herein provided for, each of the Credit Parties hereby
represents and warrants to the Administrative Agent and to each Lender that:
6.1 FINANCIAL CONDITION.
Each of the financial statements described below (copies of which have
heretofore been provided to the Administrative Agent for distribution to the
Lenders), have been prepared in accordance with GAAP consistently applied
throughout the periods covered thereby, are complete and correct in all material
respects and present fairly the financial condition and results from operations
of the entities and for the periods specified, subject in the case of interim
company-prepared statements to normal year-end adjustments and the absence of
footnotes:
(i) an audited consolidated balance sheet of the Borrower and
its consolidated subsidiaries dated as of January 31, 1998, together
with related consolidated statements of income and cash flows certified
by Coopers & Lybrand, L.L.P., certified public accountants; and
(ii) a company-prepared consolidated balance sheet of the
Borrower and its consolidated subsidiaries dated as of October 31,
1998, together with related consolidated statements of income and cash
flows.
6.2 NO CHANGES OR RESTRICTED PAYMENTS.
Since October 31, 1998, (a) there has been no circumstance, development
or event relating to or affecting the members of the Consolidated Group which
has had or would be reasonably expected to have a Material Adverse Effect, and
(b) except as permitted herein, no Restricted Payments have been made or
declared or are contemplated by any members of the Consolidated Group.
6.3 ORGANIZATION; EXISTENCE; COMPLIANCE WITH LAW.
Each of the members of the Consolidated Group (a) is duly organized,
validly existing in good standing under the laws of the jurisdiction of its
incorporation or organization, (b) has the corporate or other necessary power
and authority, and the legal right, to own and operate its Property, to lease
the Property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign entity and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business
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requires such qualification, other than in such jurisdictions where the failure
to be so qualified and in good standing would not, in the aggregate, have a
Material Adverse Effect, and (d) is in compliance with all Requirements of Law,
except to the extent that the failure to comply therewith would not, in the
aggregate, be reasonably expected to have a Material Adverse Effect.
6.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Credit Parties has the corporate or other necessary power
and authority, and the legal right, to make, deliver and perform the Credit
Documents to which it is a party and to accept Extensions of Credit or the make
the guaranties hereunder, as appropriate, and has taken all necessary corporate
or other action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is a party and the acceptance of Extensions of
Credit or the making of the guaranties hereunder, as appropriate. No consent or
authorization of, filing with, notice to or other act by or in respect of, any
Governmental Authority or any other Person is required in connection with
acceptance of Extensions of Credit or the making of the guaranties hereunder or
with the execution, delivery or performance of any Credit Documents by the
Credit Parties (other than those which have been obtained, such filings as are
required by the Securities and Exchange Commission and to fulfill other
reporting requirements with Governmental Authorities) or with the validity or
enforceability of any Credit Document against the Credit Parties (except such
filings as are necessary in connection with the perfection of the Liens created
by such Credit Documents). Each Credit Document to which it is a party
constitutes a legal, valid and binding obligation of such Credit Party
enforceable against such Credit Party in accordance with its respective terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 NO LEGAL BAR.
The execution, delivery and performance of the Credit Documents, the
borrowings hereunder and the use of the Extensions of Credit will not violate
any Requirement of Law or any Contractual Obligation of any member of the
Consolidated Group (except those as to which waivers or consents have been
obtained), and will not result in, or require, the creation or imposition of any
Lien on any of its respective properties or revenues pursuant to any Requirement
of Law or Contractual Obligation other than the Liens arising under or
contemplated in connection with the Credit Documents. No member of the
Consolidated Group is in default under or with respect to any of its Contractual
Obligations in any respect which would reasonably be expected to have a Material
Adverse Effect.
6.6 NO MATERIAL LITIGATION.
No claim, litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the best knowledge of the
Credit Parties, threatened by or against any members of the Consolidated Group
or against any of their respective Properties or revenues which (a) relate to
the Credit Documents or any of the transactions contemplated
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hereby or thereby or (b) if adversely determined, would reasonably be expected
to have a Material Adverse Effect. Set forth on Schedule 6.6 is a summary of all
claims, litigation, investigations and proceedings pending or, to the best
knowledge of the Credit Parties, threatened by or against the members of the
Consolidated Group or against any of their respective Properties or revenues,
and none of such actions, individually or in the aggregate, is reasonably
expected to have a Material Adverse Effect.
6.7 NO DEFAULT.
No Default or Event of Default has occurred and is continuing.
6.8 Ownership of Property; Liens.
Each of the members of the Consolidated Group (i) has good record and
marketable title in fee simple to, or a valid leasehold interest in, all its
material real property, and good title to, or a valid leasehold interest in, all
its other material property, and none of such property is subject to any Lien,
except for Permitted Liens and (ii) has obtained all material licenses, permits,
franchises or other authorizations, governmental or private, necessary to the
ownership of its Property and the conduct of its business.
6.9 INTELLECTUAL PROPERTY.
Each of the members of the Consolidated Group owns, or has the legal
right to use, all United States trademarks, tradenames, copyrights, technology,
know-how and processes, if any, necessary for each of them to conduct its
business as currently conducted (the "Intellectual Property") except for those
the failure to own or have such legal right to use would not be reasonably
expected to have a Material Adverse Effect. No claim has been asserted and is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does any Credit Party know of any such claim, and the use of such
Intellectual Property by the members of the Consolidated Group does not infringe
on the rights of any Person, except for such claims and infringements that, in
the aggregate, would not be reasonably expected to have a Material Adverse
Effect.
6.10 NO BURDENSOME RESTRICTIONS.
No Requirement of Law or Contractual Obligation of the members of the
Consolidated Group would be reasonably expected to have a Material Adverse
Effect.
6.11 TAXES.
Each of the members of the Consolidated Group has filed or caused to be
filed all United States federal income tax returns and all other material tax
returns which, to the best knowledge of the Credit Parties, are required to be
filed and has paid (a) all taxes shown to be due and payable on said returns or
(b) all taxes shown to be due and payable on any assessments of which it has
received notice made against it or any of its Property and all other taxes, fees
or other charges
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imposed on it or any of its Property by any Governmental Authority (other than
any (i) taxes, fees or other charges with respect to which the failure to pay,
in the aggregate, would not have a Material Adverse Effect or (ii) taxes, fees
or other charges the amount or validity of which are currently being contested
and with respect to which reserves in conformity with GAAP have been provided on
the books of such Person), and no tax Lien has been filed, and, to the best
knowledge of the Credit Parties, except as set forth on Schedule 6.11, no claim
has been asserted in writing against a member of the Consolidated Group with
respect to any such tax, fee or other charge.
6.12 ERISA
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred, and, to
the best knowledge of the Credit Parties, no event or condition has occurred or
exists as a result of which any ERISA Event could reasonably be expected to
occur, with respect to any Plan; (ii) no "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the Internal
Revenue Code, whether or not waived, has occurred with respect to any Plan;
(iii) each Plan has been maintained, operated, and funded in compliance with its
own terms and in material compliance with the provisions of ERISA, the Internal
Revenue Code, and any other applicable federal or state laws; and (iv) no lien
in favor of the PBGC or a Plan has arisen or is reasonably likely to arise on
account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under each
Single Employer Plan, as of the last annual valuation date prior to the date on
which this representation is made or deemed made (determined, in each case, in
accordance with Financial Accounting Standards Board Statement 87, utilizing the
actuarial assumptions used in such Plan's most recent actuarial valuation
report), did not exceed as of such valuation date the fair market value of the
assets of such Plan.
(c) No member of the Consolidated Group or any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be reasonably
expected to incur, any withdrawal liability under ERISA to any Multiemployer
Plan or Multiple Employer Plan. No member of the Consolidated Group or any ERISA
Affiliate would become subject to any withdrawal liability under ERISA if any
member of the Consolidated Group or any ERISA Affiliate were to withdraw
completely from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this representation is
made or deemed made. No member of the Consolidated Group or any ERISA Affiliate
has received any notification that any Multiemployer Plan is in reorganization
(within the meaning of Section 4241 of ERISA), is insolvent (within the meaning
of Section 4245 of ERISA), or has been terminated (within the meaning of Title
IV of ERISA), and no Multiemployer Plan is, to the best knowledge of the Credit
Parties, reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Internal Revenue Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected or may
subject any member of the Consolidated Group or any ERISA
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Affiliate to any liability under Section 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Internal Revenue Code, or under any agreement or other
instrument pursuant to which any member of the Consolidated Group or any ERISA
Affiliate has agreed or is required to indemnify any person against any such
liability.
(e) No member of the Consolidated Group or any ERISA Affiliates has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of Financial Accounting Standards Board
Statement 106. Each Plan which is a welfare plan (as defined in Section 3(1) of
ERISA) to which Sections 601-609 of ERISA and Section 4980B of the Internal
Revenue Code apply has been administered in compliance in all material respects
of such sections.
6.13 GOVERNMENTAL REGULATIONS, ETC.
(a) No part of the proceeds of the Extensions of Credit hereunder will
be used, directly or indirectly, for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U, or for the purpose of
purchasing or carrying or trading in any securities. If requested by any Lender
or the Administrative Agent, the Borrower will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form U-1 referred to in Regulation U. No indebtedness being
reduced or retired out of the proceeds of the Extensions of Credit hereunder was
or will be incurred for the purpose of purchasing or carrying any margin stock
within the meaning of Regulation U or any "margin security" within the meaning
of Regulation T. "Margin stock" within the meaning of Regulation U does not
constitute more than 25% of the value of the consolidated assets of the Borrower
and its Subsidiaries. None of the transactions contemplated by this Credit
Agreement (including, without limitation, the direct or indirect use of the
proceeds of the Loans) will violate or result in a violation of the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, or
regulations issued pursuant thereto, or Regulation T, U or X.
(b) None of the members of the Consolidated Group is subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act or the Investment Company Act of 1940, each as amended. In addition,
none of the members of the Consolidated Group is (i) an "investment company"
registered or required to be registered under the Investment Company Act of
1940, as amended, or is controlled by such a company, or (ii) a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) No director, executive officer or principal shareholder of any
member of the Consolidated Group is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with reference to any
Lender) have the respective meanings assigned thereto in Regulation O issued by
the Board of Governors of the Federal Reserve System.
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6.14 SUBSIDIARIES.
Set forth on Schedule 6.14 are all the Subsidiaries of the Borrower at
the Closing Date, the jurisdiction of their incorporation or organization and
the direct or indirect ownership interest of the Borrower therein.
6.15 PURPOSE OF EXTENSIONS OF CREDIT.
The Loans shall be used (i) to refinance existing Funded Debt, (ii) to
finance the Specialty Battery Division Acquisition, and (iii) to finance working
capital, capital expenditures and other lawful corporate purposes, including
acquisitions permitted hereunder. The Letters of Credit shall be used for lawful
corporate purposes.
6.16 ENVIRONMENTAL MATTERS.
Except as would not reasonably be expected to have a Material Adverse
Effect:
(a) Each of the facilities and properties currently owned, leased or
operated by the members of the Consolidated Group (the "Subject Properties") and
all operations at the Subject Properties are in compliance with all applicable
Environmental Laws, and there is no violation of any Environmental Law with
respect to the Subject Properties or the businesses operated by the members of
the Consolidated Group (the "Businesses"), and there are no conditions relating
to the Businesses or Subject Properties that are reasonably likely to give rise
to liability under any applicable Environmental Laws.
(b) None of the Subject Properties contains, or contained during the
period owned, leased or operated by a member of the Consolidated Group, any
Materials of Environmental Concern at, on or under the Subject Properties in
amounts or concentrations that constitute or constituted a violation of, or is
reasonably likely to give rise to liability under, Environmental Laws.
(c) None of the members of the Consolidated Group has received any
written notice of, or written inquiry from, any Governmental Authority
regarding, any violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Subject Properties or the
Businesses, nor does any member of the Consolidated Group have knowledge or
reason to believe that any such notice is likely to be received or is being
threatened. None of the members of the Consolidated Group has received any
written notice of, or written inquiry from, any Governmental Authority or other
Person regarding any liability or potential liability regarding environmental
matters or compliance with Environmental Laws with regard to any facility or
property previously owned by any member of the Consolidated Group, nor does any
member of the Consolidated Group have knowledge or reason to believe that any
such notice is likely to be received or is being threatened.
(d) Materials of Environmental Concern have not been transported or
disposed of from the Subject Properties, or generated, treated, stored or
disposed of at, on or under any of the Subject Properties or any other location,
in each case by or on behalf of any members of the Consolidated
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Group in violation of, or in a manner that would be reasonably likely to give
rise to liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative action is
pending or, to the best knowledge of any Credit Party, threatened, under any
Environmental Law to which any member of the Consolidated Group is or will be
named as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
any member of the Consolidated Group, the Subject Properties or the Businesses.
(f) There has been no release or threat of release of Materials of
Environmental Concern at or from the Subject Properties or arising from or
related to the operations (including, without limitation, disposal) of any
member of the Consolidated Group in connection with the Subject Properties or
otherwise in connection with the Businesses, in violation of or in amounts or in
a manner that is reasonably likely to result in liability under Environmental
Laws.
6.17 YEAR 2000 COMPLIANCE.
The Borrower has (i) initiated a review and assessment of all areas
within its and each of its Subsidiaries' business and operations that could be
adversely affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower or any of its Subsidiaries may be unable to
recognize and perform properly date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to
date, implemented that plan in accordance with that timetable. Based on the
foregoing, the Borrower believes that all computer applications of the Borrower
and its Subsidiaries that are material to its or any of its Subsidiaries'
business and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after January
1, 2000 (that is, be "Year 2000 Compliant"), except to the extent that a failure
to do so could not reasonably be expected to have a Material Adverse Effect.
6.18 EMPLOYEE RELATIONS.
Except as set out on Schedule 6.18, none of the members of the
Consolidated Group is a party to any collective bargaining agreement nor has any
labor union been recognized as the representative for its employees, nor, to the
best of the knowledge of the Credit Parties, have any strikes or work stoppages
been threatened or initiated against members of the Consolidated Group.
SECTION 7
AFFIRMATIVE COVENANTS
Each of the Credit Parties covenants and agrees that on the Closing
Date, and so long as this Credit Agreement is in effect and until the
Commitments have been terminated, no
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Obligations remain outstanding and all amounts owing hereunder or in connection
herewith have been paid in full, each of the members of the Consolidated Group
party hereto shall:
7.1 FINANCIAL STATEMENTS.
Furnish, or cause to be furnished, to the Administrative Agent and the
Lenders:
(a) Audited Financial Statements. As soon as available, but in any
event within 95 days after the end of each fiscal year, an audited consolidated
balance sheet of the Borrower and its subsidiaries as of the end of such fiscal
year and the related consolidated statements of income, retained earnings,
shareholders' equity and cash flows for such fiscal year, audited by
Pricewaterhouse Coopers, L.L.P. or other independent certified public
accountants of nationally recognized standing acceptable to the Required Lenders
in their reasonable discretion, setting forth in each case in comparative form
the figures as of the end of and for the previous fiscal year, reported without
a "going concern" or like qualification or exception, or qualification
indicating that the scope of the audit was inadequate to permit such independent
certified public accountants to certify such financial statements without such
qualification.
(b) Company-Prepared Financial Statements. As soon as available, but in
any event
(i) within 50 days after the end of each fiscal quarter, a
company-prepared consolidated balance sheet of the Borrower and its
subsidiaries as of the end of such quarter and related company-prepared
consolidated statements of income, retained earnings, shareholders'
equity and cash flows for such quarterly period and for the fiscal year
to date; and
(ii) within 45 days after the end of each fiscal year, an
annual business plan and budget for the members of the Consolidated
Group, containing, among other things, pro forma financial statements
for the current fiscal year,
in each case setting forth in comparative form the consolidated figures for the
corresponding date or period or periods of the preceding fiscal year or the
portion of the fiscal year ending with such period, as applicable, in each case
subject to normal recurring year-end audit adjustments.
All such financial statements shall be complete and correct in all material
respects (subject, in the case of interim statements, to normal recurring
year-end audit adjustments) and shall be prepared in reasonable detail and, in
the case of the annual and quarterly financial statements provided in accordance
with subsections (a) and (b) above, in accordance with GAAP applied consistently
throughout the periods reflected therein and further accompanied by a
description of, and an estimation of the effect on the financial statements on
account of, a change in the application of accounting principles as provided in
Section 1.3.
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7.2 CERTIFICATES; OTHER INFORMATION.
Furnish, or cause to be furnished, to the Administrative Agent and the
Lenders:
(a) Accountant's Certificate and Reports. Concurrently with the
delivery of the financial statements referred to in Section 7.1(a), a
certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except as
specified in such certificate.
(b) Officer's Compliance Certificate. Concurrently with the delivery of
the financial statements referred to in Sections 7.1(a) and 7.1(b), a
certificate of a Responsible Officer of the Borrower stating that, to the best
of such Responsible Officer's knowledge and belief, (i) such financial
statements fairly present in all material respects the financial condition and
results from operations of the parties covered by such financial statements,
(ii) during such period the members of the Consolidated Group have observed or
performed in all material respects the covenants and other agreements hereunder
and under the other Credit Documents relating to them, and satisfied in all
material respects the conditions contained in this Credit Agreement to be
observed, performed or satisfied by them, and (iii) such Responsible Officer has
obtained no knowledge of any Default or Event of Default except as specified in
such certificate. Such certificate shall include the calculations required to
indicate compliance with Section 7.9. A form of Officer's Certificate is
attached as Schedule 7.2(b).
(c) Accountants' Reports. Promptly upon receipt, a copy of any final
(as distinguished from a preliminary or discussion draft) "management letter" or
other similar report submitted by independent accountants or financial
consultants to the members of the Consolidated Group in connection with any
annual, interim or special audit.
(d) Public Information. Promptly after the same are sent, copies of all
reports (other than those otherwise provided pursuant to Section 7.1) and other
financial information which any member of the Consolidated Group sends to its
public stockholders, and promptly after the same are filed, copies of all
financial statements and non-confidential reports which any member of the
Consolidated Group may make to, or file with, the Securities and Exchange
Commission or any successor or analogous Governmental Authority.
(e) Other Information. Promptly, such additional financial and other
information as the Administrative Agent, at the request of any Lender, may from
time to time reasonably request.
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7.3 NOTICES.
Give notice to the Administrative Agent (which shall promptly transmit
such notice to each Lender) of:
(a) Defaults. Immediately (and in any event within two (2) Business
Days) after any Credit Party knows or has reason to know thereof, the occurrence
of any Default or Event of Default.
(b) Contractual Obligations. Promptly, the occurrence of any default or
event of default under any Contractual Obligation of any member of the
Consolidated Group which would reasonably be expected to have a Material Adverse
Effect.
(c) Legal Proceedings. Promptly, any litigation, or any investigation
or proceeding (including without limitation, any environmental proceeding),
known to any member of the Consolidated Group, or any material development in
respect thereof, affecting any member of the Consolidated Group where the claim
requests damages or amounts in excess of $1,000,000 over amounts covered by
insurance as to which coverage has been acknowledged by the applicable insurer)
and/or where, if adversely determined, would reasonably be expected to have a
Material Adverse Effect.
(d) ERISA. Promptly, after any Responsible Officer of the Borrower
knows of (i) any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or is reasonably likely to lead to, an ERISA
Event; (ii) with respect to any Multiemployer Plan, the receipt of notice as
prescribed in ERISA or otherwise of any withdrawal liability assessed against
any of its ERISA Affiliates, or of a determination that any Multiemployer Plan
is in reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii) the failure to make full payment on or before the due date
(including extensions) thereof of all amounts which the members of the
Consolidated Group or any ERISA Affiliate are required to contribute to each
Plan pursuant to its terms and as required to meet the minimum funding standard
set forth in ERISA and the Internal Revenue Code with respect thereto; or (iv)
any change in the funding status of any Single Employer Plan that reasonably
could be expected to have a Material Adverse Effect; together with a description
of any such event or condition or a copy of any such notice and a statement by
the chief financial officer of the Borrower briefly setting forth the details
regarding such event, condition, or notice, and the action, if any, which has
been or is being taken or is proposed to be taken by the Credit Parties with
respect thereto. Promptly upon request, the members of the Consolidated Group
shall furnish the Administrative Agent and the Lenders with such additional
information concerning any Plan as may be reasonably requested, including, but
not limited to, copies of each annual report/return (Form 5500 series), as well
as all schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to ERISA and
the Internal Revenue Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
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(e) Other. Promptly, any other development or event which a Responsible
Officer of the Borrower determines could reasonably be expected to have a
Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Responsible Officer of the Borrower setting forth details of the occurrence
referred to therein and stating what action the relevant Credit Parties propose
to take with respect thereto.
7.4 PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with prudent business
practice (subject, where applicable, to specified grace periods) all material
obligations (including taxes) of each member of the Consolidated Group of
whatever nature and any additional costs that are imposed as a result of any
failure to so pay, discharge or otherwise satisfy such obligations, except when
the amount or validity of such obligations and costs is currently being
contested in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the books of
the Consolidated Group, as the case may be.
7.5 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Continue to engage in business of the same general type as now
conducted by it on the date hereof and similar or related businesses; except as
permitted by Section 8.3, preserve, renew and keep in full force and effect its
corporate existence and take all reasonable action to maintain all rights,
privileges, licenses and franchises necessary or desirable in the normal conduct
of its business; and comply with all Contractual Obligations and Requirements of
Law applicable to it except to the extent that failure to comply therewith would
not, in the aggregate, have a Material Adverse Effect.
7.6 MAINTENANCE OF PROPERTY; INSURANCE.
Keep all material property useful and necessary in its business in
reasonably good working order and condition (ordinary wear and tear excepted);
maintain with financially sound and reputable insurance companies casualty,
liability and such other insurance (which may include plans of self-insurance)
with such coverage and deductibles, and in such amounts as may be consistent
with prudent business practice and in any event consistent with normal industry
practice (except to any greater extent as may be required by the terms of any of
the other Credit Documents); and furnish to the Administrative Agent, upon
written request, full information as to the insurance carried.
7.7 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Maintain a standard system of accounting in accordance with GAAP and
proper books and records of account in which, in all material respects, full,
true and correct entries are made of all dealings and transactions in relation
to its businesses and activities; and permit, during regular
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business hours and upon reasonable notice by the Administrative Agent, the
Administrative Agent and its agents and representatives to visit and inspect any
of its properties and examine and make abstracts (including photocopies) from
any of its books and records (other than materials protected by the
attorney-client privilege and materials which the Credit Parties may not
disclose without violation of a confidentiality obligation binding upon them) at
any reasonable time, and to discuss the business, operations, properties and
financial and other condition of the members of the Consolidated Group with
officers and employees of the members of the Consolidated Group and with their
independent certified public accountants. The cost of the inspection referred to
in the preceding sentence shall be for the account of the Lenders unless an
Event of Default has occurred and is continuing, in which case the cost of such
inspection shall be for the account of the Credit Parties.
7.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and take reasonable actions
to ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws and obtain and comply in all
material respects with and maintain, and take reasonable actions to ensure that
all tenants and subtenants obtain and comply in all material respects with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws except to the extent that
non-compliance, failure to obtain or failure to maintain would not reasonably be
expected to have a Material Adverse Effect;
(b) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all lawful
orders and directives of all Governmental Authorities regarding Environmental
Laws except to the extent that the same are being contested in good faith by
appropriate proceedings and the failure to do or the pendency of such
proceedings would not reasonably be expected to have a Material Adverse Effect;
and
(c) Defend, indemnify and hold harmless the Administrative Agent and
the Lenders, and their respective employees, agents, officers and directors,
from and against any and all claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of the members of the Consolidated Group or the
Subject Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. The agreements in this paragraph shall,
notwithstanding anything to the contrary contained in this Credit Agreement,
survive repayment of the Loans and all other amounts payable hereunder, and
termination of the Commitments.
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7.9 FINANCIAL COVENANTS.
Comply with the following financial covenants:
(a) Consolidated Leverage Ratio. As of the end of each fiscal quarter,
the Consolidated Leverage Ratio shall be not greater than 3.0:1.0.
(b) Consolidated Fixed Charge Coverage Ratio. As of the end of each
fiscal quarter, the Consolidated Fixed Charge Coverage Ratio shall be not less
than:
Closing Date through January 31, 2001 1.25:1.0
February 1, 2001 through January 31, 2002 1.35:1.0
February 1, 2002 and thereafter 1.50:1.0
(c) Consolidated Net Worth. At all times, Consolidated Net Worth shall
be not less than $105 million PLUS on the last day of each fiscal quarter to
occur after the Closing Date, fifty percent (50%) of Consolidated Net Income for
the fiscal quarter then ended, but not less than zero, such increases to be
cumulative, PLUS one hundred percent (100%) of the Net Proceeds from Equity
Transactions occurring after the Closing Date.
7.10 ADMINISTRATIVE FEES.
Pay to the Administrative Agent the Administrative Agent's Fees and
comply with the other agreements provided for in the Administrative Agent's Fee
Letter.
7.11 ADDITIONAL GUARANTIES AND STOCK PLEDGES.
(a) Domestic Subsidiaries. Where Domestic Subsidiaries of the Borrower
which are not Credit Parties hereunder (the "Non-Guarantor Subsidiaries") shall
at any time constitute more than the following (the "Threshold Requirement"):
(i) in any instance for any such Non-Guarantor Subsidiary,
five percent (5%) of consolidated assets for the Consolidated Group at
the end of the immediately preceding fiscal year or five percent (5%)
of consolidated revenues for the Consolidated Group for the immediately
preceding fiscal year, or
(ii) in the aggregate for all such Non-Guarantor Subsidiaries,
ten percent (10%) of consolidated assets for the Consolidated Group at
the end of the immediately preceding fiscal year or ten percent (10%)
of consolidated revenues for the Consolidated Group for the immediately
preceding fiscal year,
then the Borrower shall (i) promptly notify the Administrative Agent thereof,
and promptly cause such Domestic Subsidiary or Subsidiaries to become a
Guarantor by execution of a Joinder Agreement such that immediately after such
Domestic Subsidiary or Subsidiaries becomes a Guarantor, the remaining
Non-Guarantor Subsidiaries shall not in any instance, or collectively,
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exceed the Threshold Requirement, (ii) deliver with the Joinder Agreement,
supporting resolutions, incumbency certificates, corporate formation and
organizational documentation and opinions of counsel as the Administrative Agent
may reasonably request, and (iii) deliver stock certificates and related pledge
agreements or pledge joinder agreements evidencing the pledge of 100%, or if
less the full amount owned by members of the Consolidated Group, of the Voting
Stock of all Domestic Subsidiaries (whether or not they are Guarantors),
together with undated stock transfer powers executed in blank.
(b) Foreign Subsidiaries. Upon formation or acquisition of a Foreign
Subsidiary, or other arrangement whereby a Person shall become a Foreign
Subsidiary, the Borrower will promptly notify the Administrative Agent thereof
and cause (i) delivery of supporting resolutions, incumbency certificates,
corporation formation and organizational documentation and opinions of counsel
as the Administrative Agent may reasonably request, and (ii) delivery of stock
certificates (where required for perfection under local law) and a related
pledge agreement or pledge joinder agreement evidencing the pledge of 65% (or
such greater percentage which would not result in material adverse tax
consequences) of the issued and outstanding capital stock entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued
and outstanding capital stock not entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) of such Foreign Subsidiary, together in each case
with undated stock transfer powers executed in blank.
7.12 OWNERSHIP OF SUBSIDIARIES.
Except to the extent otherwise permitted in Section 8.6, the Borrower
shall, directly or indirectly, own at all times 67% of the Voting Stock of
Shanghai and 100% of the Voting Stock of each of its other Subsidiaries.
7.13 USE OF PROCEEDS.
Extensions of Credit will be used solely for the purposes provided in
Section 6.15.
7.14 YEAR 2000 COMPATIBILITY.
Use all commercially reasonable efforts to ensure that its computer
based systems are able to operate and effectively process data including dates
on and after January 1, 2000, and, at the reasonable request of the
Administrative Agent or any Lender, provide evidence to the Lenders of such year
2000 compatibility.
SECTION 8
NEGATIVE COVENANTS
Each of the Credit Parties covenants and agrees that on the Closing
Date, and so long as this Credit Agreement is in effect and until the
Commitments have been terminated, no
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Obligations remain outstanding and all amounts owing hereunder or in connection
herewith have been paid in full, no member of the Consolidated Group shall:
8.1 INDEBTEDNESS.
Contract, create, incur, assume or permit to exist any Indebtedness,
except:
(a) Indebtedness arising or existing under this Credit Agreement and
the other Credit Documents;
(b) Indebtedness set forth in Schedule 8.1, and renewals, refinancings
and extensions thereof on terms and conditions no less favorable than for such
existing Indebtedness;
(c) Capital Lease Obligations and Indebtedness incurred, in each case,
to provide all or a portion of the purchase price or costs of construction of an
asset or, in the case of a sale/leaseback transaction as described in Section
8.10, to finance the value of such asset owned by a member of the Consolidated
Group, PROVIDED that (i) such Indebtedness when incurred shall not exceed the
purchase price or cost of construction of such asset or, in the case of a
sale/leaseback transaction, the fair market value of such asset, (ii) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing, and (iii)
the total amount of all such Indebtedness at any time outstanding together with
any Indebtedness incurred and outstanding pursuant to Section 8.1(g) and Section
8.1(i) shall not exceed $15,000,000;
(d) Indebtedness and obligations owing under interest rate, commodities
and foreign currency exchange protection agreements entered into in the ordinary
course of business to manage existing or anticipated risks and not for
speculative purposes;
(e) unsecured intercompany Indebtedness owing by a member of the
Consolidated Group to another member of the Consolidated Group (subject,
however, to the limitations of Section 8.4 in the case of the member of the
Consolidated Group extending the intercompany loan, advance or credit);
(f) Support Obligations of Indebtedness permitted under this Section
8.1;
(g) Subordinated Debt of the Borrower incurred to finance acquisitions
permitted under Section 8.3(c), PROVIDED that (i) the incurrence of such
Subordinated Debt shall not result in a Default or Event of Default on a Pro
Forma Basis and (ii) the total amount of such Indebtedness at any time
outstanding together with any Indebtedness incurred and outstanding pursuant to
Section 8.1(c) and Section 8.1(i), shall not exceed $15,000,000;
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(h) Indebtedness of Shanghai not to exceed $12,000,000 in the aggregate
at any time outstanding; and
(i) other unsecured Indebtedness of the Borrower PROVIDED that the
total amount of such Indebtedness at any time outstanding together with any
Indebtedness incurred and outstanding pursuant to Section 8.1(c) and Section
8.1(g), shall not exceed $15,000,000.
8.2 LIENS.
Contract, create, incur, assume or permit to exist any Lien with
respect to any of their respective Property or assets of any kind (whether real
or personal or mixed, tangible or intangible), whether now owned or hereafter
acquired, except for Permitted Liens.
8.3 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
(a) Enter into a transaction of merger or consolidation, EXCEPT a
member of the Consolidated Group may be a party to a transaction of merger or
consolidation with any Person, PROVIDED that (A) the Borrower may be a party to
a transaction of merger or consolidation only with another member of the
Consolidated Group in any such case and the Borrower shall be the surviving
corporation thereto, (B) in any other case, the surviving corporation shall be a
Domestic Subsidiary and such Domestic Subsidiary shall become a Guarantor
hereunder as an Additional Credit Party pursuant to Section 7.11 concurrently
therewith, (C) no Default or Event of Default shall exist either immediately
prior to or immediately after giving effect thereto and (D) in the case of a
transaction of merger or consolidation with any Person which is not a member of
the Consolidated Group, the provisions of subsection (c) of this Section 8.3
shall be complied with.
(b) Sell, lease, transfer or otherwise dispose of assets, Property
and/or operations (including any sale-leaseback transaction, but excluding the
sale of inventory in the ordinary course of business), other than to another
Credit Party, unless
(i) any such sale, lease, transfer or other disposition in any
instance (including any series of related transactions) shall not
constitute more than five percent (5%) of consolidated assets for the
Consolidated Group at the end of the immediately preceding fiscal year
or account for more than five percent (5%) of Consolidated Net Income
for the immediately preceding fiscal year,
(ii) all such sales, leases, transfers and other dispositions
in the aggregate in any fiscal year shall not constitute more than ten
percent (10%) of consolidated assets for the Consolidated Group at the
end of the immediately preceding fiscal year or account for more than
ten percent (10%) Consolidated Net Income for the immediately preceding
fiscal year, and
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(iii) no Default or Event of Default exists immediately prior
thereto or after giving effect thereto on a Pro Forma Basis.
(c) Other than the Specialty Battery Division Acquisition, acquire all
or any portion of the capital stock or other ownership interest in any Person
which is not a Subsidiary or all or any substantial portion of the assets,
Property and/or operations of a Person which is not a Subsidiary, UNLESS
(i) in the case of an acquisition of capital stock or other
ownership interest if, after giving effect thereto, such Person will
not be a Subsidiary, then such acquisition will not cause a violation
of Section 8.4;
(ii) in the case of either an acquisition of capital stock or
other ownership interest if, after giving effect thereto, such Person
will be a Subsidiary, or an acquisition of assets, property and/or
operations, then
(A) the total cash consideration paid in connection
with any such acquisition (or series of related transactions)
shall not exceed in any instance $25,000,000 (including
Indebtedness assumed and the fair value of assets transferred
in connection therewith);
(B) the total cash consideration paid in connection
with all such acquisitions shall not exceed in any fiscal year
$50,000,000 (including Indebtedness assumed and the fair value
of assets transferred in connection therewith) PLUS, for
fiscal years occurring after the current fiscal year, the
unused portions from the immediately preceding fiscal year
(without giving effect to any carry-over amounts from prior
years);
(C) the Board of Directors of the Person which is the
subject of such acquisition shall have approved such
acquisition; and
(D) no Default or Event of Default exists immediately
prior thereto or after giving effect thereto on a Pro Forma
Basis.
(d) In the case of the Borrower and any Subsidiary which is not
wholly-owned, liquidate, wind-up or dissolve, whether voluntarily or
involuntarily (or suffer to permit any such liquidation or dissolution).
(e) Alter the character of their business in any material respect from
that conducted as of the Closing Date and similar or related businesses.
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8.4 ADVANCES, INVESTMENTS AND LOANS.
Lend money or extend credit or make advances to any Person, or purchase
or acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, or otherwise make an Investment in, any Person
except for Permitted Investments.
8.5 TRANSACTIONS WITH AFFILIATES.
Enter into or permit to exist any transaction or series of
transactions, whether or not in the ordinary course of business, with any
officer, director, shareholder or Affiliate other than (i) transactions
permitted by Section 8.1, Section 8.3(b), Section 8.4 or Section 8.9, (ii)
customary fees and expenses paid to directors and (iii) where such transactions
are on terms and conditions substantially as favorable as would be obtainable in
a comparable arm's-length transaction with a Person other than an officer,
director, shareholder or Affiliate.
8.6 OWNERSHIP OF EQUITY INTERESTS.
Issue, sell, transfer, pledge or otherwise dispose of any partnership
interests, shares of capital stock or other equity or ownership interests
("Equity Interests") in any member of the Consolidated Group, except (i) the
issuance, sale or transfer of Equity Interests in the Borrower, (ii) the
issuance, sale or transfer of Equity Interests to a Credit Party by a Subsidiary
of such Credit Party, (iii) in connection with a transaction permitted by
Section 8.3, and (iv) as needed to qualify directors under applicable law.
8.7 FISCAL YEAR.
Change its fiscal year from a January 31 fiscal year end without the
prior written consent of the Required Lenders which consent shall not be
unreasonably withheld or delayed.
8.8 PREPAYMENTS OF INDEBTEDNESS, ETC.
(a) After the issuance thereof, amend or modify (or permit the
amendment or modification of), the terms of any other Indebtedness in a manner
adverse to the interests of the Lenders (including specifically shortening any
maturity or average life to maturity or requiring any payment sooner than
previously scheduled or increasing the interest rate or fees applicable
thereto); or
(b) Make any prepayment, redemption, defeasance or acquisition for
value of (including, without limitation, by way of depositing money or
securities with the trustee with respect thereto before due for the purpose of
paying when due), or refund, refinance or exchange of, any Funded Debt (other
than intercompany Indebtedness permitted hereunder) other than regularly
scheduled payments of principal and interest on such Funded Debt.
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8.9 RESTRICTED PAYMENTS.
Make or permit any Restricted Payments, unless and to the extent that
no Default or Event of Default shall exist immediately prior or after giving
effect thereto on a Pro Forma Basis.
8.10 SALE LEASEBACKS.
Except as permitted pursuant to Section 8.1(c), directly or indirectly,
become or remain liable as lessee or as guarantor or other surety with respect
to any lease, whether an Operating Lease or a Capital Lease, of any Property,
whether now owned or hereafter acquired, (i) which such Person has sold or
transferred or is to sell or transfer to any other Person other than a Credit
Party or (ii) which such Person intends to use for substantially the same
purpose as any other Property which has been sold or is to be sold or
transferred by such Person to any other Person in connection with such lease.
8.11 LIMITATIONS ON RESTRICTED ACTIONS.
Directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Person to (a) pay dividends or make any other distributions to any Credit Party
on its capital stock or with respect to any other interest or participation in,
or measured by, its profits, (b) pay any Indebtedness or other obligation owed
to any Credit Party, (c) make loans or advances to any Credit Party, (d) sell,
lease or transfer any of its Properties or assets to any Credit Party, (e) grant
a Lien on its Properties or assets whether now owned or hereafter acquired or
(f) act as a Guarantor and pledge its assets pursuant to the Credit Documents or
any renewals, refinancings, exchanges, refundings or extension thereof, except
(in respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents or (ii) applicable law.
8.12 NO FURTHER NEGATIVE PLEDGES.
Except with respect to prohibitions against other encumbrances on
specific Property encumbered to secure payment of particular Indebtedness (which
Indebtedness relates solely to such specific Property, and improvements and
accretions thereto, and is otherwise permitted hereby), enter into, assume or
become subject to any agreement prohibiting or otherwise restricting the
creation or assumption of any Lien upon its Properties or assets, whether now
owned or hereafter acquired, or requiring the grant of any security for such
obligation if security is given for some other obligation.
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SECTION 9
EVENTS OF DEFAULT
9.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall
(i) default, and such default shall continue for three (3) or
more Business Days, in the payment when due of any principal of any of
the Loans or of any reimbursement obligations arising from drawings
under Letters of Credit, or
(ii) default, and such default shall continue for three (3) or
more Business Days, in the payment when due of any interest on the Loans
or any interest on any reimbursement obligations arising from drawings
under Letters of Credit, or of any Fees or other amounts owing
hereunder, under any of the other Credit Documents or in connection
herewith or therewith; or
(b) Representations. Any representation, warranty or statement made or
deemed to be made herein, in any of the other Credit Documents, or in any
statement or certificate delivered or required to be delivered pursuant hereto
or thereto shall prove untrue in any material respect on the date as of which it
was made or deemed to have been made or delivered; or
(c) Covenants.
(i) Default in the due performance or observance of any term,
covenant or agreement contained in Section 7.3(a), 7.9, 7.11, 7.13 or
8.1 through 8.11, inclusive, or
(ii) Default in the due performance or observance by it of any
term, covenant or agreement (other than those referred to in subsection
(a), (b) or (c)(i) of this Section 9.1) contained in this Credit
Agreement and such default shall continue unremedied for a period of at
least 30 days after the earlier of a responsible officer of a Credit
Party becoming aware of such default or written notice thereof by the
Administrative Agent; or
(d) Other Credit Documents. (i) Any Credit Party shall default in the
due performance or observance of any term, covenant or agreement in any of the
other Credit Documents (subject to applicable grace or cure periods, if any), or
(ii) except as to the Credit Party which is dissolved, released or merged or
consolidated out of existence as the result of or in connection with a
dissolution, merger or disposition permitted by Section 8.3(a), Section 8.3(b)
or Section 8.3(c), any Credit Document shall fail to be in full force and effect
or to give the Administrative Agent
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and/or the Lenders any material part of the Liens, rights, powers and privileges
purported to be created thereby; or
(e) Guaranties. Except as to the Credit Party which is dissolved,
released or merged or consolidated out of existence as the result of or in
connection with a dissolution, merger or disposition permitted by Section
8.3(a), Section 8.3(b) or Section 8.3(c), the guaranty given by any Guarantor
hereunder or any material provision thereof shall cease to be in full force and
effect, or any Guarantor hereunder or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under such
guaranty, or any Guarantor shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any guaranty; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with respect to
any member of the Consolidated Group; or
(g) Defaults under Other Agreements. With respect to any Indebtedness
(other than Indebtedness outstanding under this Credit Agreement) in excess of
$2,500,000 in the aggregate for the Consolidated Group taken as a whole, (A) (1)
any member of the Consolidated Group shall default in any payment (beyond the
applicable grace period with respect thereto, if any) with respect to any such
Indebtedness, or (2) the occurrence and continuance of a default in the
observance or performance relating to such Indebtedness or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event or condition shall occur or condition exist, the effect of which default
or other event or condition is to cause, or permit the holder or holders of such
Indebtedness (or trustee or agent on behalf of such holders) to cause
(determined without regard to whether any notice or lapse of time is required),
any such Indebtedness to become due prior to its stated maturity; or (B) any
such Indebtedness shall be declared due and payable, or required to be prepaid
other than by a regularly scheduled required prepayment, prior to the stated
maturity thereof; or
(h) Judgments. Any member of the Consolidated Group shall fail within
45 days of the date due and payable to pay, bond or otherwise discharge any
judgment, settlement or order for the payment of money which judgment,
settlement or order, when aggregated with all other such judgments, settlements
or orders due and unpaid at such time, exceeds $1,000,000, and which is not
stayed on appeal (or for which no motion for stay is pending) or is not
otherwise being executed; or
(i) ERISA. Any of the following events or conditions, if such event or
condition could reasonably be expected to have a Material Adverse Effect: (1)
any "accumulated funding deficiency," as such term is defined in Section 302 of
ERISA and Section 412 of the Internal Revenue Code, whether or not waived, shall
exist with respect to any Single Employer Plan, or any Lien shall arise on the
assets of a member of the Consolidated Group or any ERISA Affiliate in favor of
the PBGC or a Single Employer Plan; (2) an ERISA Event shall occur with respect
to a Single Employer Plan, which results in the termination of such Plan for
purposes of Title IV of ERISA; (3) an ERISA Event shall occur with respect to a
Multiemployer Plan or Multiple Employer Plan, which results in (i) the
termination of such Plan for purposes of Title IV of
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ERISA, or (ii) a member of the Consolidated Group or any ERISA Affiliate
incurring any liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency of (within the
meaning of Section 4245 of ERISA) such Plan; or (4) with respect to a Plan
(other than a Multi-Employer Plan or Multiple Employer Plan), any prohibited
transaction (within the meaning of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code) or breach of fiduciary responsibility shall occur which
has subjected a member of the Consolidated Group or any ERISA Affiliate to any
liability under Section 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Internal Revenue Code, or under any agreement or other instrument pursuant
to which a member of the Consolidated Group or any ERISA Affiliate has agreed or
is required to indemnify any person against any such liability; or
(j) Ownership. There shall occur a Change of Control.
9.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter,
the Administrative Agent shall, upon the request and direction of the Required
Lenders, by written notice to the Credit Parties take any of the following
actions:
(i) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(ii) Acceleration. Declare the unpaid principal of and any
accrued interest in respect of all Loans, any reimbursement obligations
arising from drawings under Letters of Credit and any and all other
indebtedness or obligations of any and every kind owing by the Credit
Parties to the Administrative Agent and/or any of the Lenders hereunder
to be due whereupon the same shall be immediately due and payable
without presentment, demand, protest or other notice of any kind, all of
which are hereby waived by each of the Credit Parties. Amounts received
hereunder after termination of the Commitments and acceleration of the
maturity of the Loans and obligations hereunder, shall be shared ratably
between the Revolving Lenders based on the outstanding principal amount
of Revolving Obligations, on the one hand, and the Term Lenders based on
the outstanding principal amount of the Term Loan, on the other hand.
(iii) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the occurrence
of an Event of Default under Section 9.1(f), it will immediately pay) to
the Administrative Agent additional cash, to be held by the
Administrative Agent, for the benefit of the Revolving Lenders, in a
cash collateral account as additional security for the LOC Obligations
in respect of subsequent drawings under all then outstanding Letters of
Credit an amount equal to the maximum aggregate amount which may be
drawn under all Letters of Credit then outstanding.
(iv) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents and all rights
of set-off.
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Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations arising from drawings under Letters of
Credit, all accrued interest in respect thereof, all accrued and unpaid Fees and
other indebtedness or obligations owing to the Administrative Agent and/or any
of the Lenders hereunder automatically shall immediately become due and payable
without presentment, demand, protest or the giving of any notice or other action
by the Administrative Agent or the Lenders, all of which are hereby waived by
the Credit Parties.
SECTION 10
AGENCY PROVISIONS
10.1 APPOINTMENT.
Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent of such Lender to act as specified herein and the other
Credit Documents, and each Lender hereby authorizes the Administrative Agent as
the Administrative Agent for such Lender, to take such action on its behalf
under the provisions of this Credit Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly delegated by
the terms hereof and of the other Credit Documents, together with such other
powers as are reasonably incidental thereto. Each Lender further directs and
authorizes the Administrative Agent to execute releases (or similar agreements)
to give effect to the provisions of this Credit Agreement and the other Credit
Documents, including specifically, without limitation, the provisions of Section
8.3. Notwithstanding any provision to the contrary elsewhere herein and in the
other Credit Documents, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein, or any
fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Administrative Agent. The provisions of this Section 10.1 are solely
for the benefit of the Administrative Agent and the Lenders, and none of the
Credit Parties shall have any rights as a third party beneficiary of the
provisions of this Section 10.1. In performing its functions and duties under
this Credit Agreement and the other Credit Documents, the Administrative Agent
shall act solely as Administrative Agent of the Lenders and does not assume and
shall not be deemed to have assumed any obligation or relationship of agency or
trust with or for any Credit Party or any of their respective Affiliates.
10.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties hereunder or
under the other Credit Documents by or through agents or attorneys-in-fact and
shall be entitled to advice of counsel concerning all matters pertaining to such
duties. The Administrative Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
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10.3 EXCULPATORY PROVISIONS.
The Administrative Agent and its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall not be (i) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection herewith or in connection with any of the other Credit Documents
(except for its or such Person's own gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by any of the Credit Parties
contained herein or in any of the other Credit Documents or in any certificate,
report, document, financial statement or other written or oral statement
referred to or provided for in, or received by the Administrative Agent under or
in connection with this Credit Agreement or in connection with the other Credit
Documents, or enforceability or sufficiency therefor of any of the other Credit
Documents, or for any failure of any Credit Party to perform its obligations
hereunder or thereunder. The Administrative Agent shall not be responsible to
any Lender for the effectiveness, genuineness, validity, enforceability,
collectability or sufficiency of this Credit Agreement or any of the other
Credit Documents or for any representations, warranties, recitals or statements
made herein or therein or made by the Borrower or any other Credit Party in any
written or oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or therewith
furnished or made available by the Administrative Agent to the Lenders or by or
on behalf of the Credit Parties to the Administrative Agent or any Lender or be
required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained herein or
therein or as to the use of the proceeds of the Loans or the use of the Letters
of Credit or of the existence or possible existence of any Default or Event of
Default or to inspect the properties, books or records of the Credit Parties or
any of their respective Affiliates.
10.4 RELIANCE ON COMMUNICATIONS.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Administrative Agent with reasonable care). The
Administrative Agent may deem and treat the Lenders as the owners of their
respective interests hereunder for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent in accordance with Section 11.3(b). The Administrative
Agent shall be fully justified in failing or refusing to take any action under
this Credit Agreement or under any of the other Credit Documents unless it shall
first receive such advice or concurrence of the Required Lenders (or, to the
extent required by Section 11.6, all of the Lenders) as it deems appropriate or
it shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder or under
any of the other Credit Documents in accordance with a request of the Required
Lenders (or to the extent specifically
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provided in Section 11.6, all the Lenders) and such request and any action taken
or failure to act pursuant thereto shall be binding upon all the Lenders
(including their successors and assigns).
10.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or a Credit Party
referring to the Credit Document, describing such Default or Event of Default
and stating that such notice is a "notice of default." In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to such Default or Event of Default as shall be reasonably
directed by the Required Lenders (or, to the extent required by Section 11.6,
all of the Lenders).
10.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that each of the Administrative
Agent and its officers, directors, employees, agents, attorneys-in-fact or
affiliates has not made any representations or warranties to it and that no act
by the Administrative Agent or any affiliate thereof hereafter taken, including
any review of the affairs of any Credit Party or any of their respective
Affiliates, shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Borrower, the other Credit Parties or
their respective Affiliates and made its own decision to make its Loans
hereunder and enter into this Credit Agreement. Each Lender also represents that
it will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Credit Agreement, and to
make such investigation as it deems necessary to inform itself as to the
business, assets, operations, property, financial and other conditions,
prospects and creditworthiness of the Borrower, the other Credit Parties and
their respective Affiliates. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, assets, property, financial or other conditions, prospects or
creditworthiness of the Borrower, the other Credit Parties or any of their
respective Affiliates which may come into the possession of the Administrative
Agent or any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
10.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its capacity
as such (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their respective
Commitments (or if the Commitments have expired or
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been terminated, in accordance with the respective principal amounts of
outstanding Loans and Participation Interests of the Lenders), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever which
may at any time (including without limitation at any time following the final
payment of all of the obligations of the Borrower hereunder and under the other
Credit Documents) be imposed on, incurred by or asserted against the
Administrative Agent in its capacity as such in any way relating to or arising
out of this Credit Agreement or the other Credit Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; PROVIDED
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the gross negligence or willful
misconduct of the Administrative Agent. If any indemnity furnished to the
Administrative Agent for any purpose shall, in the opinion of the Administrative
Agent, be insufficient or become impaired, the Administrative Agent may call for
additional indemnity (except against gross negligence or willful misconduct) and
cease, or not commence, to do the acts indemnified against until such additional
indemnity is furnished. The agreements in this Section shall survive the
repayment of the Loans, LOC Obligations and other obligations under the Credit
Documents and the termination of the Commitments hereunder.
10.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The entity which is the Administrative Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Borrower, its Subsidiaries or their respective Affiliates as though the
entity which is the Administrative Agent were not the Administrative Agent
hereunder. With respect to the Loans made by and all obligations of the Borrower
hereunder and under the other Credit Documents, the entity which is the
Administrative Agent shall have the same rights and powers under this Credit
Agreement as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
entity which is the Administrative Agent in its individual capacity.
10.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may, at any time, resign upon 20 days' written
notice to the Lenders, and may be removed, upon show of cause, by the Required
Lenders upon 30 days' written notice to the Administrative Agent. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Administrative Agent provided such successor is a Lender hereunder. If
no successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
notice of resignation or notice of removal, as appropriate, then the retiring
Administrative Agent shall select a successor Administrative Agent provided such
successor is a Lender hereunder or a commercial bank organized under the laws of
the United States of America or of any State thereof and has a combined capital
and surplus of at least $400,000,000. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the
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retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations as Administrative Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 10 shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Administrative Agent under this Credit
Agreement.
SECTION 11
MISCELLANEOUS
11.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (i) when
delivered, (ii) when transmitted via telecopy (or other facsimile device) to the
number set out below, (iii) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (iv)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties at
the address, in the case of the Borrower, Guarantors and the Administrative
Agent, set forth below, and, in the case of the Lenders, set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto:
if to the Borrower or the Guarantors:
C&D Technologies, Inc.
1400 Union Meeting Road
P.O. Box 3053
Blue Bell, Pennsylvania 19422-0858
Attn: Treasurer
Telephone: (215) 619-7815
Telecopy: (215) 619-7811
with a copy to:
Proskauer Rose LLP
1585 Broadway
New York, NY 10036
Attn: Steven L. Kirshenbaum, Esq.
Telephone: (212) 969-3295
Telecopy: (212) 969-2900
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if to the Administrative Agent:
NationsBank, N.A.
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attn: Angela Berry
Agency Services
Telephone: (704) 386-8958
Telecopy: (704) 388-9436
with a copy to:
NationsBank, N.A.
10 Light Street
Baltimore, Maryland 21202
Attn: Patrick M. Moore
Telephone: (410) 605-5351
Telecopy: (410) 528-1657
11.2 RIGHT OF SET-OFF.
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default, each Lender is authorized at any time and
from time to time, without presentment, demand, protest or other notice of any
kind (all of which rights being hereby expressly waived), to set off and to
appropriate and apply any and all deposits (general or special) and any other
indebtedness at any time held or owing by such Lender (including, without
limitation, branches, agencies or Affiliates of such Lender wherever located) to
or for the credit or the account of any Credit Party against obligations and
liabilities of such Person to such Lender hereunder, under the Notes, under the
other Credit Documents or otherwise, irrespective of whether such Lender shall
have made any demand hereunder and although such obligations, liabilities or
claims, or any of them, may be contingent or unmatured, and any such set off, if
made, shall be deemed to have been made immediately upon the occurrence of an
Event of Default even though such charge is made or entered on the books of such
Lender subsequent thereto. Any Person purchasing a participation in the Loans
and Commitments hereunder pursuant to Section 3.13 or Section 11.3(d) may
exercise all rights of set-off with respect to its participation interest as
fully as if such Person were a Lender hereunder.
11.3 BENEFIT OF AGREEMENT.
(a) Generally. This Credit Agreement shall be binding upon and inure to
the benefit of and be enforceable by the respective successors and assigns of
the parties hereto; PROVIDED that none of the Credit Parties may assign or
transfer any of its interests without prior written consent of the Lenders;
PROVIDED FURTHER that the rights of each Lender to
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transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 11.3, PROVIDED however
that nothing herein shall prevent or prohibit any Lender from (i) pledging its
Loans hereunder to a Federal Reserve Bank in support of borrowings made by such
Lender from such Federal Reserve Bank, or (ii) granting assignments or selling
participations in such Lender's Loans and/or Commitments hereunder to its parent
company and/or to any Affiliate or Subsidiary of such Lender.
(b) Assignments. Each Lender may assign all or a portion of its rights
and obligations hereunder (including, without limitation, all or a portion of
its Commitments or its Loans), pursuant to an assignment agreement substantially
in the form of Schedule 11.3(b), to (i) a Lender, (ii) an Affiliate of a Lender
or (iii) any other Person (other than the Borrower or an Affiliate of the
Borrower) reasonably acceptable to the Administrative Agent and, so long as no
Default or Event of Default has occurred and is continuing, the Borrower (the
consent of the Borrower shall not be unreasonably withheld or delayed and such
consent shall be deemed given if the Borrower does not notify the assigning
Lender and the Administrative Agent of any objection within two Business Days
after the Borrower has been provided notice of the proposed assignment by the
assigning Lender or the Administrative Agent); PROVIDED that (i) any such
assignment (other than any assignment to an existing Lender) shall be in a
minimum aggregate amount of $5,000,000 (or, if less, the remaining amount of the
Commitment being assigned by such Lender) of the Commitments and in integral
multiples of $1,000,000 above such amount and (ii) each such assignment shall be
of a constant, not varying, percentage of all such Lender's rights and
obligations under this Credit Agreement. Any assignment hereunder shall be
effective upon delivery to the Administrative Agent of written notice of the
assignment together with a transfer fee of $3,500 payable to the Administrative
Agent for its own account from and after the later of (i) the effective date
specified in the applicable assignment agreement and (ii) the date of recording
of such assignment in the Register pursuant to the terms of subsection (c)
below. The assigning Lender will give prompt notice to the Administrative Agent
and the Borrower of any such assignment. Upon the effectiveness of any such
assignment (and after notice to, and (to the extent required pursuant to the
terms hereof), with the consent of, the Borrower as provided herein), the
assignee shall become a "Lender" for all purposes of this Credit Agreement and
the other Credit Documents and, to the extent of such assignment, the assigning
Lender shall be relieved of its obligations hereunder to the extent of the Loans
and Commitment components being assigned. Along such lines the Borrower agrees
that upon notice of any such assignment and surrender of the appropriate Note or
Notes, it will promptly provide to the assigning Lender and to the assignee
separate promissory notes in the amount of their respective interests
substantially in the form of the original Note or Notes (but with notation
thereon that it is given in substitution for and replacement of the original
Note or Notes or any replacement notes thereof). By executing and delivering an
assignment agreement in accordance with this Section 11.3(b), the assigning
Lender thereunder and the assignee thereunder shall be deemed to confirm to and
agree with each other and the other parties hereto as follows: (i) such
assigning Lender warrants that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse claim; (ii) except
as set forth in clause (i) above, 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 Credit
Agreement, any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto, or the execution, legality, validity,
enforceability,
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genuineness, sufficiency or value of this Credit Agreement, any of the other
Credit Documents or any other instrument or document furnished pursuant hereto
or thereto or the financial condition of any Credit Party or any of their
respective Affiliates or the performance or observance by any Credit Party of
any of its obligations under this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto or
thereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such assignment agreement; (iv) such assignee confirms
that it has received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such assignment agreement;
(v) such assignee will independently and without reliance upon the
Administrative 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 Credit Agreement and the other Credit Documents; (vi) such assignee
appoints and authorizes the Administrative Agent to take such action on its
behalf and to exercise such powers under this Credit Agreement or any other
Credit Document as are delegated to the Administrative Agent by the terms hereof
or thereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all the obligations which by the terms of this Credit Agreement and the other
Credit Documents are required to be performed by it as a Lender.
(c) Maintenance of Register. The Administrative Agent shall maintain at
one of its offices in Charlotte, North Carolina a copy of each Lender assignment
agreement delivered to it in accordance with the terms of subsection (b) above
and a register for the recordation of the identity of the principal amount, type
and Interest Period of each Loan outstanding hereunder, the names, addresses and
the Commitments of the Lenders pursuant to the terms hereof from time to time
(the "Register"). The Administrative Agent will make reasonable efforts to
maintain the accuracy of the Register and to promptly update the Register from
time to time, as necessary. With respect to the Administrative Agent and the
Lenders, the entries in the Register shall be conclusive in the absence of
manifest error and the Borrower, the Administrative Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Credit Agreement. The
Register shall be available for inspection by the Borrower and each Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Each Lender may sell, transfer, grant or assign
participations in all or a portion of such Lender's rights, obligations or
rights and obligations hereunder (including all or a portion of its Commitments
or its Loans); PROVIDED that (i) such selling Lender shall remain a "Lender" for
all purposes under this Credit Agreement (such selling Lender's obligations
under the Credit Documents remaining unchanged) and the participant shall not
constitute a Lender hereunder, (ii) no such participant shall have, or be
granted, rights to approve any amendment or waiver relating to this Credit
Agreement or the other Credit Documents except to the extent any such amendment
or waiver would (A) reduce the principal of or rate of interest on or Fees in
respect of any Loans in which the participant is participating, (B) postpone the
date fixed for any payment of principal (including extension of the Termination
Date), interest or Fees in which the participant is participating, (C)
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except as the result of or in connection with a dissolution, merger or
disposition of a Subsidiary permitted under Section 8.3, release the Borrower or
substantially all of the Guarantors from its or their obligations under the
Credit Documents, or (D) except as the result of or in connection with a
disposition permitted under Section 8.3(b), release all or substantially all of
the collateral, and (iii) sub-participations by the participant (except to an
affiliate, parent company or affiliate of a parent company of the participant)
shall be prohibited. In the case of any such participation, the participant
shall not have any rights under this Credit Agreement or the other Credit
Documents (the participant's rights against the selling Lender in respect of
such participation to be those set forth in the participation agreement with
such Lender creating such participation) and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such participation,
PROVIDED, however, that such participant shall be entitled to receive additional
amounts under Sections 3.6, 3.9, 3.10, 3.11 and 11.2 on the same basis as if it
were a Lender.
11.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Administrative Agent or any
Lender and any of the Credit Parties shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle the Borrower or any other Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or the Lenders to any other or further action
in any circumstances without notice or demand.
11.5 PAYMENT OF EXPENSES, ETC.
The Borrower agrees to: (i) pay all reasonable out-of-pocket costs and
expenses (A) of the Administrative Agent in connection with the negotiation,
preparation, execution and delivery and administration of this Credit Agreement
and the other Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees and expenses of
Moore & Van Allen, PLLC, special counsel to the Administrative Agent) and any
amendment, waiver or consent relating hereto and thereto including, but not
limited to, any such amendments, waivers or consents resulting from or related
to any work-out, renegotiation or restructure relating to the performance by the
Credit Parties under this Credit Agreement and (B) of the Administrative Agent
and the Lenders in connection with enforcement of the Credit Documents and the
documents and instruments referred to therein (including, without limitation, in
connection with any such enforcement, the reasonable fees and disbursements of
counsel for the Administrative Agent and each of the Lenders); (ii) pay and hold
each of the Lenders harmless from and against any and all present and future
stamp and other similar taxes with respect to the foregoing matters and save
each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission (other than to the
extent attributable to such Lender) to pay such taxes;
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and (iii) indemnify each Lender, its affiliates, and their respective officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all losses, liabilities, claims, damages or expenses
incurred by any of them as a result of, or arising out of, or in any way related
to, or by reason of (A) any investigation, litigation or other proceeding
(whether or not any Lender is a party thereto) related to the entering into
and/or performance of any Credit Document or the use of proceeds of any
Extensions of Credit hereunder or the consummation of any other transactions
contemplated in any Credit Document, including, without limitation, the
reasonable fees and disbursements of counsel incurred in connection with any
such investigation, litigation or other proceeding or (B) the presence or
Release of any Materials of Environmental Concern at, under or from any Subject
Property, or the failure by any member of the Consolidated Group to comply with
any Environmental Law (but excluding, in the case of either of clause (A) or (B)
above, any such losses, liabilities, claims, damages or expenses to the extent
incurred by reason of gross negligence or willful misconduct on the part of the
Person seeking to be indemnified).
11.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Borrower, PROVIDED, HOWEVER, that:
(a) without the consent of each Lender affected thereby, neither this
Credit Agreement nor any of the other Credit Documents may be amended to
(i) extend the final maturity of any Loan or the time of
payment of any reimbursement obligation, or any portion thereof,
arising from drawings under Letters of Credit, or extend, amend or
waive any principal amortization payment of any Loan, or any portion
thereof (other than a waiver or modification of a mandatory prepayment
or commitment reduction hereunder which shall be subject to the consent
of the Required Lenders except as expressly provided otherwise),
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any increase in
interest rates after the occurrence of an Event of Default or on
account of a failure to deliver financial statements on a timely basis)
thereon or Fees hereunder,
(iii) reduce or waive the principal amount of any Loan or of
any reimbursement obligation, or any portion thereof, arising from
drawings under Letters of Credit,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of any
Default or Event of Default or mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender),
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(v) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.3, release the Borrower or any material Guarantor from its or
their obligations under the Credit Documents,
(vi) except as the result of or in connection with a
disposition permitted under Section 8.3(b), release all or
substantially all of the collateral,
(vii) amend, modify or waive any provision of this Section
11.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14,
9.1(a), 11.2, 11.3, 11.5 or 11.9,
(viii) modify any percentage specified in, or otherwise amend,
the definition of Required Lenders,
(ix) consent to the assignment or transfer by the Borrower (or
another Credit Party) of any of its rights and obligations under (or in
respect of) the Credit Documents except as permitted thereby, or
(x) amend, modify or waive any provision of any Credit
Document which pursuant to its terms requires the consent, approval or
satisfaction of each Lender;
(b) without the consent of the Administrative Agent, no provision of
Section 10 may be amended; and
(c) without the consent of the Issuing Lender, no provision of Section
2.2 may be amended.
Notwithstanding the fact that the consent of all the Lenders is
required in certain circumstances as set forth above, (x) each Lender is
entitled to vote as such Lender sees fit on any bankruptcy reorganization plan
that affects the Loans, and each Lender acknowledges that the provisions of
Section 1126(c) of the Bankruptcy Code supersede the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.
11.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
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11.8 HEADINGS.
The headings of the sections and subsections hereof and the table of
contents herein are provided for convenience only and shall not in any way
affect the meaning or construction of any provision of this Credit Agreement.
11.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Sections 2.2(i), 3.6, 3.9, 3.10, 3.11, 10.7 and 11.5 shall survive the execution
and delivery of this Credit Agreement, the making of the Loans, the issuance of
the Letters of Credit, the repayment of the Loans, LOC Obligations and other
obligations under the Credit Documents and the termination of the Commitments
hereunder, and all representations and warranties made by the Credit Parties
herein shall survive delivery of the Notes and the making of the Loans
hereunder.
11.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Any legal action or proceeding with respect to this Credit Agreement or any
other Credit Document may be brought in the state or federal courts located in
the State of New York, and, by execution and delivery of this Credit Agreement,
each of the Credit Parties hereby irrevocably accepts for itself and in respect
of its property, generally and unconditionally, the nonexclusive jurisdiction of
such courts. Nothing herein shall affect the right of the Administrative Agent
to serve process in any manner permitted by law or to commence legal proceedings
or to otherwise proceed against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Credit Agreement or any other Credit Document brought in the courts referred to
in subsection (a) hereof and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE AGENT,
THE LENDERS, THE BORROWER AND THE OTHER CREDIT PARTIES HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
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11.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
11.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.13 BINDING EFFECT; TERMINATION.
(a) This Credit Agreement shall become effective at such time on or
after the Closing Date when it shall have been executed by the Borrower, the
Guarantors and the Administrative Agent, and the Administrative Agent shall have
received copies hereof (telefaxed or otherwise) which, when taken together, bear
the signatures of each Lender, and thereafter this Credit Agreement shall be
binding upon and inure to the benefit of the Borrower, the Guarantors, the
Administrative Agent and each Lender and their respective successors and
assigns.
(b) The term of this Credit Agreement shall commence on the effective
date pursuant to subsection (a) above and shall continue until no Loans, LOC
Obligations or any other amounts payable hereunder or under any of the other
Credit Documents shall remain outstanding and until all of the Commitments
hereunder shall have expired or been terminated (or longer as provided in
Section 11.9).
11.14 CONFIDENTIALITY.
The Administrative Agent and the Lenders agree to keep confidential
(and to cause their respective affiliates, officers, directors, employees,
agents and representatives to keep confidential) all information, materials and
documents furnished to the Administrative Agent or any such Lender by or on
behalf of any Credit Party (whether before or after the Closing Date) which
relates to the Borrower or any of its Subsidiaries (the "Information").
Notwithstanding the foregoing, the Administrative Agent and each Lender shall be
permitted to disclose Information (i) to its affiliates, officers, directors,
employees, agents and representatives (including counsel, accountants and
auditors) in connection with its participation in any of the transactions
evidenced by this Credit Agreement or any other Credit Documents or the
administration or enforcement of this Credit Agreement or any other Credit
Documents; (ii) to the extent required by applicable laws and regulations or by
any subpoena or similar legal process, or requested by any Governmental
Authority; (iii) to the extent such Information (A) becomes publicly available
other than as a result of a breach of this Credit Agreement or any agreement
entered into pursuant to clause (iv) below, (B) becomes available to the
Administrative Agent or such Lender on a non-confidential basis from
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a source other than a Credit Party or (C) was available to the Administrative
Agent or such Lender on a non-confidential basis prior to its disclosure to the
Administrative Agent or such Lender by a Credit Party; (iv) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first specifically agrees
in a writing furnished to and for the benefit of the Credit Parties to be bound
by the terms of this Section 11.14; or (v) to the extent that the Borrower shall
have consented in writing to such disclosure. Nothing set forth in this Section
11.14 shall obligate the Administrative Agent or any Lender to return any
materials furnished by the Credit Parties.
11.15 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any separate
account maintained by such Lender in which any employee benefit plan (or its
related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender has
disclosed to the Borrower the name of each employee benefit plan whose assets in
such account exceed 10% of the total assets of such account as of the date of
such purchase (and, for purposes of this subsection (b), all employee benefit
plans maintained by the same employer or employee organization are deemed to be
a single plan);
(c) to the extent that any part of such funds constitutes assets of an
insurance company's general account, such insurance company has complied with
all of the requirements of the regulations issued under Section 401(c)(1)(A) of
ERISA; or
(d) such funds constitute assets of one or more specific benefit plans
which such Lender has identified in writing to the Borrower.
As used in this Section 11.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA.
11.16 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any other Credit
Document, on the other hand, this Credit Agreement shall control.
[Signature Pages to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: C&D TECHNOLOGIES, INC.
a Delaware corporation
By: /s/ Robert T. Marley
-----------------------
Name: Robert T. Marley
Title: Treasurer
GUARANTORS: RATELCO ELECTRONICS, INC.,
a Delaware corporation
By: /s/ Robert T. Marley
-----------------------
Name:Robert T. Marley
Title: Treasurer
C&D/CHARTER HOLDINGS, INC.,
a Delaware corporation
By: /s/ Robert T. Marley
-----------------------
Name:Robert T. Marley
Title: Treasurer
PCC MEXICAN HOLDINGS, INC.,
a Delaware corporation
By: /s/ Robert T. Marley
-----------------------
Name:Robert T. Marley
Title: Treasurer
<PAGE>
LENDERS: NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Administrative Agent
By: /s/ Patrick M. Moore
--------------------------
Name: Patrick M. Moore
Title: Vice President
MELLON BANK, N.A.
By: /s/ Mark W. Torie
--------------------------
Name: Mark W. Torie
Title: Vice President
COMERICA BANK
By: /s/ David W. Shirey
---------------------------
Name: David W. Shirey
Title: Assistant Vice President
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Stephen E. McDonald
---------------------------
Name: Stephen E. McDonald
Title: First Vice President
FIRSTAR BANK MILWAUKEE N.A.
By: /s/ Paul J. Hennessy
----------------------------
Name: Paul J. Hennessy
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Vito Michael Ferrone
-----------------------------
Name: Vito Michael Ferrone
Title: Vice President
<PAGE>
LASALLE NATIONAL BANK
By: /s/ Russell P. McMinn
-------------------------
Name: Russell P. McMinn
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Karl F. Schultz
------------------------
Name: Karl F. Schultz
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Warren Engle
-------------------------
Name: Warren Engle
Title: Vice President
THE CHASE MANHATTAN BANK
By: Thomas F. Conroy, Jr.
---------------------------
Name: Thomas F. Conroy, Jr.
Title: Vice President
FLEET BANK, N.A.
By: /s/ Michael P. O'Brien
---------------------------
Name: Michael P. O'Brien
Title: Vice President
<PAGE>
