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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended March 31, 1996
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission File Number 1-11263
EXIDE CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 23-0552730
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
1400 N. WOODWARD AVENUE
BLOOMFIELD HILLS, MICHIGAN 48304
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
Registrant's telephone number, including area code (810) 258-0080
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH
REGISTERED
Common Stock, $.01 par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
10 3/4% SENIOR NOTES, DUE DECEMBER 15, 2002
(TITLE OF CLASS)
12 1/4% SENIOR SUBORDINATED DEFERRED COUPON DEBENTURES DUE DECEMBER 15, 2004
(TITLE OF CLASS)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No .
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
. $415,670,731Aggregate market value of the voting stock held by non-
affiliates of the registrant as of June 27, 1996:
. 20,893,693 outstanding shares of the Registrant's common stock as of June
27, 1996.
(DOCUMENTS INCORPORATED BY REFERENCE)
Portions of the Proxy Statement relating to the Annual Meeting of Stockholders
to be held August 14, 1996, are incorporated by reference into Part III of
this report.
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EXIDE CORPORATION
TABLE OF CONTENTS
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PART I
Item 1 Business..................................................... 1
Item 2 Properties................................................... 13
Item 3 Legal Proceedings............................................ 15
Item 4 Submission of Matters to a Vote of Security Holders.......... 16
PART II
Item 5 Market for Registrant's Common Equity and Related Stockholder
Matters..................................................... 16
Item 6 Selected Financial Data...................................... 17
Item 7 Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 18
Item 8 Financial Statements and Supplementary Data.................. 21
Item 9 Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure.................................... 22
PART III
Item 10 Directors and Executive Officers of the Registrant........... 22
Item 11 Executive Compensation....................................... 22
Item 12 Description of Capital Stock................................. 22
Item 13 Certain Relationships and Related Transactions............... 22
PART IV
Item 14 Exhibits, Financial Statement Schedules and Reports on Form
8-K......................................................... 22
SIGNATURES............................................................... 23
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE.................. F-1
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EXIDE CORPORATION
PART I
ITEM 1. BUSINESS
(A) GENERAL DEVELOPMENT OF BUSINESS
Exide Corporation (together with its subsidiaries, "Exide" or the "Company")
is the leading manufacturer and marketer of starting, lighting and ignition
("SLI") batteries in the world. During 1994 and 1995 through its acquisitions
of B.I.G. Batteries Group Limited ("BIG"), Sociedad Espanola del Acumulador
Tudor, S.A. ("Tudor") and Compagnie Europeenne d'Accumulateurs S.A. ("CEAc"),
as well as its assumption of the customers of Gemala Battery Company Limited
("Gemala Battery"), the Company has become Europe's largest producer and
marketer of SLI batteries and industrial batteries.
RATIONALIZATION AND CONSOLIDATION
The Company is implementing a cohesive overall European rationalization and
consolidation strategy with respect to its recently completed European
acquisitions. The Company plans to lower fixed and variable production costs
through plant closings, thereby increasing capacity utilization at the
remaining plants, shifting production to lower cost areas and reducing
overhead. In conjunction with its plant closings, the Company intends to
rationalize its distribution system, reducing the number of warehouses and
improving its delivery systems. In addition, the Company plans to rationalize
its product range, significantly reducing the number of stockkeeping units and
improving inventory management. The Company anticipates that this
consolidation will produce significant cost savings. Exide is also
rationalizing its SLI battery brand strategy in Europe and will concentrate
its sales and marketing efforts on its strongest brands, including Exide,
Tudor, Fulmen, Sonnenschein and Hagen Batterie.
The Company plans to reduce the total number of automotive and industrial
manufacturing facilities in Europe from 30 as of June 30, 1995 to 12 by the
year 2000. The Company has plans to close eleven automotive manufacturing
facilities, six industrial manufacturing plants and one combined automotive
and industrial manufacturing facility. In addition, the Company plans to close
two non-battery manufacturing plants. The Company was able to close six plants
in Europe in fiscal 1996 without labor unrest.
The Company plans to continue rationalizing its manufacturing and production
facilities in the United States as well. The Company is in the process of
relocating production from its Greer, South Carolina facility to its Reading,
Pennsylvania and Bristol, Tennessee facilities. The Bristol facility is
designed to be a high volume, low-cost SLI battery manufacturing facility.
NORTH AMERICA
Exide and its affiliates have a unit market share in SLI batteries of
approximately 39% in the United States and Canada, based on information
provided by an industry trade association. The Company believes that it is the
lowest cost major producer in its North American markets.
The Company has realized significant cost savings through consolidations of
operations, particularly after it doubled its size by its acquisition of
General Battery Corporation in 1987, the installation of more efficient
equipment and processes and the addition of a technologically advanced
secondary lead smelter. The Company's relatively high level of vertical
integration, through lead smelting, plastics reprocessing and separator
production, reduces the effects on Exide of changes in the market prices of
raw materials and can result in substantial raw material cost savings. In
August 1995 the Company acquired Schuylkill Holdings, Inc. ("Schuylkill"), a
U.S. company that operates two secondary lead smelters. Exide operates 18
manufacturing facilities in the United
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States and Canada. Exide continues to increase production at its Bristol,
Tennessee battery manufacturing facility, which the Company intends to be
similar to its Salina, Kansas plant. The Company believes its Salina plant is
the highest volume and one of the lowest cost automotive battery plants in the
world.
For the fiscal year ended March 31, 1996, Exide's North American operations
would have accounted for approximately 38% of Exide's total pro forma net
sales.
EUROPE
Exide targeted the European market as an attractive opportunity because it is
one of the largest battery markets outside of North America and because the
Company believes that its experience with rationalization and consolidation of
manufacturing and distribution operations can be successfully applied in
Europe. The Company believes the battery manufacturing industry in Europe is
undergoing rationalization and consolidation activity similar to that which has
occurred in the United States over the last twenty years. The key components of
the Company's European strategy include maintaining or improving (i) strong
market shares, (ii) broad geographic coverage, (iii) low production costs, (iv)
distribution systems, (v) strong customer relationships and (vi) experienced
management.
In implementing this strategy, the Company acquired two European battery
manufacturers in 1994 and one in 1995. In May 1995, the Company acquired 99.7%
of the stock of CEAc (subsequently increased to 100%), one of the largest SLI
producers and the largest industrial battery manufacturer in Europe, for
approximately $425.0 million in cash ($553.5 million less assumed debt plus
interest from March 31, 1995). In October 1994, Exide acquired for
approximately $229.0 million 89.4% (subsequently increased to 95.8%) of the
outstanding capital stock and 25% of the convertible bonds of Tudor,
headquartered in Madrid, Spain, which is the third largest lead acid battery
producer in Western Europe. In March 1994, the Company acquired BIG, an SLI
battery manufacturer based in Wales, for approximately $35.0 million. In
addition, in September 1994, the Company assumed the customers of, and began to
temporarily operate the facilities of, Gemala Battery, a battery producer based
in England and the owner of Gemala Battery received an 18.5% interest in the
combined operations of BIG and Gemala Battery.
Exide is the leading manufacturer and marketer of SLI and industrial
batteries in Europe with major market presence in France, Spain, Portugal,
Italy, Germany, the United Kingdom, Sweden, Denmark, Finland and Norway. The
Company believes it is one of the lowest cost, highest quality suppliers of SLI
and industrial batteries in Europe. SLI batteries and industrial batteries
accounted for approximately 54% and 43%, respectively, of the net sales of
Exide's European operations for the fiscal year ended March 31, 1996.
Approximately 70% of all automotive batteries sold in Europe are sold in the
aftermarket and approximately 71% of the automotive battery net sales of
Exide's operations in Europe during fiscal 1996 were of automotive replacement
batteries. Exide produces SLI batteries for the European original equipment
manufacturing ("OEM") market. On a going forward basis, the Company will focus
its SLI battery marketing efforts on certain of its strong brands. Standby
batteries represented approximately 41% and traction batteries represented
approximately 52% of industrial battery sales of the Company in fiscal 1996. As
in the automotive market, the Company's industrial battery brands, including
TS, Hagen Batterie, Tudor, Fulmen, Sonnenschein, Chloride Motive Power, Magneti
Marelli and ASTA, are well recognized in their markets.
The Company's European operations are vertically integrated (although to a
lesser extent than its North American operations), with three secondary lead
smelters in Europe. The Company supplies most of its own European needs for
plastic components.
For the fiscal year ended March 31, 1996, Exide's European operations would
have represented approximately 62% of Exide's total pro forma net sales.
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The Company is a Delaware corporation organized in 1966 to succeed to the
business of a New Jersey corporation founded in 1888 by Thomas A. Edison. The
principal executive offices of the Company are located at 1400 North Woodward
Avenue, Bloomfield Hills, Michigan 48304, telephone number (810) 258-0080.
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
The Company is primarily engaged in one industry segment, namely, the
manufacture, distribution and sale of lead acid batteries and related
accessories. (See Note 17 to the Company's Consolidated Financial Statements
appearing elsewhere herein.)
(C) NARRATIVE DESCRIPTION OF BUSINESS
Exide is the leading manufacturer and marketer of SLI batteries in the world.
The Company's acquisitions of BIG, Tudor and CEAc, as well as its assumption of
the customers of Gemala Battery, have made it Europe's largest producer and
marketer of SLI batteries and industrial batteries.
PRODUCTS
SLI Batteries. SLI batteries for the automotive aftermarket and the OEM
market represented 66% of the pro forma consolidated revenues of Exide for the
fiscal year ended March 31, 1996. In the United States and Canada, Exide has
the most complete line of automotive batteries, and the Company has introduced
numerous new products, including batteries for superior performance in hot and
cold climates, such as the Exide Heat Guard battery, the first climatized
battery, the Exide Barium Plus line maintenance-free batteries that have a
shelf life twice as long as conventional batteries and the Exide 911 Emergency
Vehicle Battery that employs patented technology to provide the high
performance required for emergency vehicles. In addition, the Company has
recently introduced a sealed recombinant battery in Europe, which the Company
believes will present a significant opportunity as it has a longer shelf life
and is the first battery sealed in such a manner that allows the battery to be
relocated from the engine to the passenger compartment of the vehicle. Exide
plans to introduce this new battery in the North American market in fiscal
1997.
The Company also produces SLI batteries for commercial applications, such as
trucks, farm equipment, tractors and other off-road vehicles, as well as
specialty batteries for marine and garden tractor applications. For the marine
market, Exide has introduced the Nautilus Mega Cycle high performance, dual
terminal battery and the Power Probe battery which allows boaters to instantly
check their battery power.
Industrial Batteries. Sales of industrial batteries represented 28% of the
pro forma consolidated revenues of Exide for the fiscal year ended March 31,
1996. Exide is the largest manufacturer and marketer in Europe of industrial
batteries. Standby (also known as "stationary") batteries are used primarily in
telecommunications, as well as electric installations, security and emergency
systems, such as for airports and hospitals, and uninterruptible power systems.
In the fiscal year ended March 31, 1996, Exide's pro forma sales of standby
batteries were approximately $285 million. Exide is one of Europe's leading
suppliers of submarine batteries and its customers include the navies of
Norway, Israel, Turkey, Sweden, Greece, Germany and Spain. Exide's European
operations have developed the Dry Safe line of maintenance-free standby
batteries, an improvement over existing sealed batteries. Traction batteries
are used to drive electric vehicles such as forklifts and mine locomotives. In
the fiscal year ended March 31, 1996, Exide's traction battery pro forma sales
were $356 million. The traction battery market is divided into the OEM market,
comprised of the manufacturers of electric vehicles, and the replacement
market, which includes large users of electric vehicles as well as OEM dealer
networks. The most important recent development by Exide's European operations
in traction batteries is the CSM series of batteries which contain a copper
negative plate that increases their capacity.
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In 1991 Exide sold its North American industrial battery product line to
Yuasa Exide, an entity in which the Company has a 13.5% interest. Yuasa Exide,
which is a leading manufacturer of industrial batteries in North America,
supplies the Company with motorcycle batteries built to Exide's
specifications.
Other Products. Sales of products other than SLI and industrial batteries
represented 6% of the pro forma consolidated revenues of Exide for the fiscal
year ended March 31, 1996. The Company also produces battery chargers and,
through acquisitions, has expanded its presence in the North American
automotive market by adding its Speed Clip line of battery related accessories
and wheel weights and its Sure Start line of remanufactured starters and
alternators. Its European operations also manufacture and market other
products such as battery chargers and accessories, plastic components and
nickel-cadmium and lithium batteries.
MARKETS AND MARKETING
North America. Over 80% of all automotive batteries sold in the United
States and Canada are sold in the aftermarket, and in fiscal 1996
approximately 90% of the Company's unit sales were of automotive replacement
batteries. The aftermarket is influenced more by the age and number of
vehicles in service than new production levels and tends to be less cyclical
than the OEM market. In April 1994, Sears, one of the largest retailers of SLI
batteries in the United States, selected the Company as the primary supplier
of its batteries, including the Die Hard brand. Exide is the leading supplier
for 17 of the 20 largest battery retailers in the United States, including
NAPA Distribution Centers, Kmart Corp., Northern Automotive Corporation,
Montgomery Ward & Co. and The Pep Boys-Manny, Moe & Jack. The Company also
produces SLI batteries for the OEM market in North America, principally for
Chrysler Corporation, for whom it is the primary supplier, as well as John
Deere, E-Z-GO, Ford New Holland, Mitsubishi Motor Manufacturing Company,
NAVISTAR, Toyota Motor Corp., and others.
Current management, which is led by Arthur M. Hawkins, Chairman, President
and Chief Executive Officer, who joined Exide in 1985, has transformed the
Company into a marketing-driven business by developing a new customer base
focused on leading mass-merchandisers, auto supply chains and wholesalers and
introducing merchandise displays, innovative packing and programs to assist
customers in marketing and inventory management. To support and expand this
customer base, Exide has expanded its Company-owned distribution system from
12 wholesale branch outlets in 1985 to approximately 130 today. These outlets,
which distribute Exide batteries to both large accounts and local dealers and
other small volume customers, also allow Exide to collect used batteries for
recycling in the Company's lead smelters as part of its recycling program
aimed at reducing costs and protecting the environment. In addition, in recent
years the Company has introduced several new products including an advanced
line of maintenance-free batteries and an emergency vehicle battery. The
Company, which markets its products under various trademarks including Exide,
Willard and Prestolite, has strengthened its brand recognition through
promotional activities, including sponsoring a NASCAR Winston Cup racing team.
A 1992 Marketing Research Institute study that surveyed 20,000 households
showed that the Exide brand had the second highest level of battery brand
recognition in the United States.
Europe. The Company's European revenues are diversified across many European
countries. Approximately 53% of the pro forma combined sales of Exide's
European operations in fiscal 1996 were of SLI batteries. Pro forma SLI
battery aftermarket sales were approximately 70% of the pro forma combined SLI
battery sales of Exide's European operations in fiscal 1996. The Company has a
leading position in the aftermarket in France, Italy, Belgium, the United
Kingdom, Ireland, Finland, Norway, Portugal and Spain. Exide's replacement SLI
battery brands include Fulmen, Sonnenschein, Tudor, Hagen Batterie, LYAC
Power, SONNAK, Anker, BIG and Exide. In addition to the markets in which it
has a direct presence through manufacturing subsidiaries, the Company markets
batteries in and exports batteries to approximately 50 other countries.
Approximately 11% of the pro forma combined fiscal 1996 sales of Exide's
European operations were to OEMs, and the Company is one of the major
suppliers to Fiat S.p.A. ("Fiat"), the Volkswagen group
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(Volkswagen AG/AUDI AG/Seat/Skoda Automobilova AS), the PSA group (Peugeot
S.A./Citroen), the Renault group and Volvo. By assuming the customers of
Gemala Battery, the Company is also a supplier to Ford Motor Co. in Europe. As
development supplier to the PSA group and several other automobile
manufacturers, Exide works closely with such customers as they develop new
models with varying requirements. As in the United States, OEM battery sales
are closely linked to new vehicle sales.
The Company has the leading market share in both standby and traction
batteries in western Europe. The Company's standby batteries are used for
telecommunications, uninterruptible power supplies, security systems,
submarines, power plants, railways and miscellaneous mobile applications (such
as wheelchairs and golf carts). Major standby battery customers include
telecommunications companies and European armed forces. Major traction battery
customers in Europe include the electric vehicle operations of the Linde group
(Still GmbH, LL Fenwicks, Fiat and Lansing), Clark and Jungheinrich, and to a
wide variety of customers in the aftermarket, ranging from large industrial
concerns to small warehouses. Technical expertise and assistance and customer
service are more important in the industrial battery markets than in the SLI
battery markets and the Company has technical service agreements with a number
of its customers.
Customers. On a pro forma basis the Company's five largest customers
accounted for 15% of its fiscal 1996 net sales. The Company does not believe
that a material part of its business is dependent upon a single customer the
loss of which would have a material impact on the long-term business of the
Company. However, the loss of one or more of the Company's largest customers
would have a negative short-term impact on the Company's results of
operations.
DISTRIBUTION NETWORKS
North America. As part of its program to improve its customer base and its
service to such customer base, the Company has developed a network of over 130
Company-owned wholesale distribution outlets throughout the United States and
Canada that sell and distribute Exide batteries to local auto part retailers,
service stations, local repair shops and other smaller volume customers as
well as collect used and spent batteries for recycling in the Company-owned
lead smelters. The Company's wholesale outlet distribution system has grown to
constitute the third largest distribution system of SLI batteries in the
United States. The development of its wholesale outlet distribution system,
which is supplemented by regional accounts, small battery wholesalers and
battery specialists, has been a key component in the Company's success and has
enabled the Company to provide cost effective product distribution to the
Company's national accounts and reduced the Company's reliance on small
battery wholesalers and retailers.
Europe. Exide's European operations distribute their aftermarket SLI
batteries primarily through battery wholesalers, OEM dealer networks,
hypermarkets, European purchasing centers and oil companies, although on a
country by country basis distribution strategy varies greatly. Battery
wholesalers sell and distribute batteries to a network of automotive parts
retailers, service stations, independent retailers and supermarkets throughout
Europe. Wholesalers, who sell to repair shops and service stations, and OEM
dealers represent the large majority of this market, but supermarket chains,
replacement part stores (who are represented by purchasing associations) and
hypermarkets have become increasingly important. The Company's distribution
network will be enhanced as certain manufacturing facilities closed pursuant
to the ongoing rationalization and consolidation are converted to use as
distribution centers.
Given the importance of service and technical assistance, Exide's European
operations generally ship standby batteries directly to system suppliers and
uninterruptible power supply manufacturers who include the standby batteries
in the equipment and distribute products to end users. Traction batteries are
distributed through OEM dealers, independent distributors and directly to
large fleet users. Exide's European operations also distribute both standby
and traction batteries through their own branch network. Exide has begun a
restructuring of its distribution network to better serve the mass
merchandising segment and currently plans to reduce the number of its
warehouse outlets and subcontract the rest of its company-owned distribution
operations.
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RESEARCH AND DEVELOPMENT; QUALITY
In North America, Exide has increased its number of engineers from just 2 in
1985 to 64 today. This commitment to research and development has allowed the
Company to introduce more new products in the last five years than the rest of
the domestic SLI battery industry combined, including the Exide Barium Plus
line and other batteries noted above. Exide has received over 100 new patents
since 1985 and is now working on the next generation of power solutions. The
Company's presence in the North American OEM markets for automobiles and
commercial vehicles, particularly its close working relationship with Chrysler
Corporation, helps it to remain current with technological innovations.
Similarly, Exide through its European operations, devotes substantial efforts
to research and development and benefits from its appointment as development
supplier to several major automobile manufacturers. The Company has received
the maximum research and development rating from the PSA group and similar
ratings from most of the other European automobile companies it serves. For
the SLI market, Exide is developing lighter batteries which will result in
lower fuel consumption and recently developed a new line of very low
maintenance batteries with higher starting power. With respect to industrial
batteries, Exide has focused on improving efficiency and reducing maintenance.
Exide continues to devote substantial efforts to research and development
for batteries for electric cars and other vehicles. The Company participated
in the development of an electric vehicle which has set various speed and
endurance records and was demonstrated at the 1994 Indianapolis 500. The
Company is participating in electric vehicle battery research projects funded
by the European Union and a consortium of battery manufacturers and by the
Spanish Ministry of Industry and Energy.
Exide's performance and product quality has been widely recognized by its
customers. In recent years, in the United States, Exide has received the
"Desert Storm" Commendation from the United States military, Carport Vendor of
the Year Award, Chrysler Quality Excellence Award, Chrysler Preferred Supplier
Evaluation, Ford Q1 Award, Toyota President's Award, Navistar QA 7 Award, NAPA
Excellence Through Performance Award, Kmart Innovation of Products and
Marketing Award, Montgomery Ward Excellence in Vendor Performance, Quality
Stores Vendor of the Year, and the ADAP Stores Vendor of the Year. An
independent testing laboratory of national repute subjected SLI batteries in
the North American market to rigorous tests designed to simulate conditions
that those batteries would experience in actual use. The reported results of
those tests indicated that Exide's batteries were superior to the other
batteries tested.
Exide's European operations have received awards for quality automotive OEM
production, including the Formel Q and Most Value to Customer awards from
Volkswagen, and one of the Company's batteries was chosen as the best
replacement battery in France in a study conducted by Auto Plus, a French
automobile magazine. In the industrial market, the Company's standby batteries
have received quality approval certificates from such major telecommunications
companies as the Deutsches Bundespost Telekom and from European defense
organizations.
MANUFACTURING, RAW MATERIALS AND SUPPLIERS
North America. The major reasons for the Company's emergence as the low-cost
producer in the United States and Canadian automotive battery industry have
been the achievement of economies of scale through strategic acquisitions, the
consolidation of facilities, the Company's relatively low labor costs and
increased vertical integration in the areas of lead smelting, plastics and
battery separators. Since 1985 and in association with the acquisition of
General Battery in May 1987, the Company consolidated the operations of seven
plants and eight distribution centers into larger, more efficient locations
with lower labor costs. This has led to a significant reduction in unit costs
and improved labor productivity. The Company also is a leader in developing
advanced production techniques, such as continuous plate processing,
statistical process control and computer-aided design and manufacturing. The
Company's manufacturing plant in Salina, Kansas is the highest volume and one
of the lowest cost automotive battery plants in the world. The Company
continues to increase production
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at its manufacturing facility in Bristol, Tennessee, a modern, highly efficient
battery manufacturing plant similar to the Company's Salina, Kansas facility.
Exide believes its overall unit conversion costs (production costs other than
raw materials) are significantly below the conversion costs of its major United
States and Canadian competitors. These cost efficiencies result from the
Company's high volume of production, emphasis on cost control and competitive
labor costs. The Company's relatively high level of vertical integration
reduces the effects of changes in the market prices of raw materials on
production costs and, when lead market prices are higher, may result in
substantial raw material cost savings. Lead is the principal raw material in
the manufacture of batteries, representing approximately one-third of the cost
of goods sold. The Company can obtain substantially all of its lead
requirements through the operation of four secondary lead smelters, which
reclaim lead by recycling spent lead-acid batteries. Prior to its acquisition
of two of such smelters in August 1995 through its purchase of Schuylkill, the
Company had begun purchasing a larger portion of its lead requirements, making
the cost of its batteries more sensitive to lead price changes. During fiscal
1996, lead prices increased significantly. The Company obtains batteries for
recycling from its customers and through its wholesale distribution outlet
system. Exide obtains the balance of its lead from a number of suppliers. The
Company believes it has a significant competitive advantage from its in-house
lead smelting and from back hauling of spent batteries for recycling through
its distribution network and wholesale distribution outlets. When lead market
prices decline, the Company's lead cost advantage from vertical integration can
be reduced or eliminated. Because Exide adjusts its pricing to a substantial
number of customers pursuant to a formula based on a published price of lead,
if market prices were to decline below the Company's lead production cost for
an extended period of time, the Company could be forced to obtain more of its
requirements from third parties and to seek to reduce its variable and fixed
costs of conversion.
The Company also produces approximately 76% of its U.S. plastic molding
requirements. In addition, approximately 87% of the Company's raw plastic
requirements in the United States are obtained through in-house reclamation of
spent battery cases as part of its recycling program.
Other key raw materials and components in the production of batteries include
separators, lead oxide and chemicals, all of which are generally available from
multiple sources. The Company currently produces all of its United States
requirements of separators, one component in SLI batteries, through Evanite. In
order to further vertically integrate its operations and assure a portion of
its global separator needs, the Company consummated the acquisition of Evanite
in February 1995. The Company has not experienced any material stoppage or
slowdown in production as a result of the unavailability, or delays in the
availability, of raw materials.
Europe. The Company operates manufacturing plants, including temporary
operation of Gemala Battery's plant, in France, Italy, Spain, Portugal,
Germany, the United Kingdom and elsewhere in Europe. Through CEAc's investment
in Turkey and its recent acquisition in Poland, and Tudor's investment in
India, the Company has a presence in Eastern Europe and Asia as well.
Exide has three secondary lead smelters in Europe that supply approximately
28% of its lead requirements (with a plan to bring that figure to 50% by the
year 2000). The Company's European operations are affected by changes in lead
prices more than its North American operations because European operations are
less vertically integrated and do not have the benefit of contract provisions
that automatically pass lead price increases through to customers to the extent
of the North American business. Major investments have been made in these
plants in recent years to improve lead treatment and recycling processes. The
Company produces most of its own plastic components.
The Company is implementing a cohesive overall European rationalization and
consolidation strategy with respect to its European acquisitions. The Company
plans to lower fixed and variable production costs through plant closings,
thereby increasing capacity utilization at the remaining plants, shifting
production to lower cost areas and reducing overhead. In conjunction with its
plant closings, the Company intends to rationalize its distribution system,
reducing the number of warehouses and improving its delivery systems. In
addition, the Company plans to rationalize its product range, significantly
reducing the number of stockkeeping units and
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improving inventory management. The Company anticipates that this
consolidation will produce significant cost savings. Exide is also
rationalizing its SLI battery brand strategy in Europe, and will concentrate
its sales and marketing efforts on its strongest brands, including Exide,
Tudor, Fulmen, Sonnenschein and Hagen Batterie.
COMPETITION
North America. The United States and Canadian market for SLI and specialty
batteries is mature and highly competitive. Battery manufacturers compete
primarily on the basis of price, quality, service, warranty period and
timeliness of delivery. Generally, sales are made without long-term contracts.
Because the domestic industry has had excess capacity, competition and
increased pressure for cost reduction from SLI battery customers in the SLI
aftermarket and from automotive OEMs and other customers in the OEM markets
for SLI batteries have resulted in declining prices in the last several years
and some smaller competitors were unable to survive.
The Company's primary domestic competitors are Johnson Controls, Inc., Delco
Remy (a division of General Motors Corporation) and GNB Incorporated (a
subsidiary of Pacific Dunlop, Ltd.). Regional manufacturers are also
significant, accounting for approximately 13% of the United States market.
Europe. The SLI and industrial battery markets are very competitive and
competition intensified as a result of reduced demand due to the recent
European recession. As in the North American SLI and industrial battery
market, European manufacturers compete primarily on the basis of price,
quality, service, warranty period and timeliness of delivery. There is excess
capacity in the industry and competition and increased pressure for cost
reduction from large customers in both the SLI and industrial battery markets
have resulted in declining prices in recent years. Currency fluctuations among
the European countries and as compared with other countries can also have
considerable competitive effects. Among Exide's competitors in Europe are VB
Autobatterie GmbH ("Varta/Bosch"), Hawker Siddeley, Fiamm, Delco Remy,
Autosil, Hoppecke, Yuasa and Matsushita.
BACKLOG
The Company does not have a material amount of backlog orders.
EMPLOYEES
North America. As of March 31, 1996, the Company employed approximately
1,614 salaried employees and approximately 4,698 hourly employees in North
America. Approximately 41% of such salaried employees are engaged in sales,
service and marketing and approximately 43% in manufacturing and engineering.
Approximately 40% of its hourly employees are represented by unions. Relations
with the unions are generally good. Contracts covering approximately 202 and
1,143 of the Company's union employees expire in fiscal 1997 and 1998,
respectively, and the remainder thereafter.
Europe. As of March 31, 1996, the Company employed approximately 3,849
salaried employees and approximately 6,437 hourly employees in Europe.
Approximately 13% of such salaried employees are engaged in sales, service and
marketing and approximately 47% in manufacturing and engineering. The
Company's hourly employees are generally represented by unions. Relations with
the unions are generally good. Contracts covering the Company's European union
employees expire on various dates through 1998.
TRADEMARKS AND PATENTS
The Company owns or has a license to use various trademarks which are of
value in the conduct of its business. While the Company believes such
trademarks and trade names enhance the brand recognition of its
8
<PAGE>
products and therefore are important to its business, the Company also
believes that its products, engineering skills, reputation for quality and
relationships with its customers are equally important for the maintenance and
growth of its business. An unaffiliated firm has rights to the Exide mark in
approximately 37 foreign countries. In addition, Exide Electronics Group,
Inc., an unaffiliated company, is licensed to use the Exide name on certain
devices.
Exide has been issued many patents worldwide, some of which are active, with
several additional patents in process covering design of lead acid batteries
and battery manufacturing equipment. While the Company believes that patents
are important to its business operations, it also believes that the loss of
any single patent or several patents would not have a material adverse effect
on the Company.
ENVIRONMENTAL, HEALTH AND SAFETY MATTERS
North America. The Company, particularly as a result of its manufacturing
and secondary lead smelting operations, is subject to numerous environmental
laws and regulations and is exposed to liabilities and compliance costs
arising from its past and current handling, processing, recycling, storing and
disposing of hazardous substances and hazardous wastes. The Company's
operations are also subject to federal, state and provincial occupational
safety and health laws and regulations, particularly relating to the
monitoring of employee health. Except as disclosed herein, the Company
believes that it is in substantial compliance with all material environmental,
health and safety requirements.
The Company has been advised by the EPA and various state agencies that it
is a PRP under CERCLA or similar state laws at 53 federally defined Superfund
or state equivalent sites. At 23 of these sites, the Company has either paid
or is in the process of paying its share of liability. In most instances, the
Company's obligations are not expected to be significant because its portion
of any potential liability appears to be minor to insignificant in relation to
the total liability of all PRP's that have been identified and which are
viable. The Company's share of the anticipated remediation costs associated
with all of the Superfund sites where it has been named a PRP, which share is
based on the Company's estimated volumetric contribution to each site, is
included in the environmental remediation reserves discussed below. Because
the Company's liability for environmental remediation costs under such
statutes may be imposed on a joint and several basis, the Company's liability
may not necessarily be based on volumetric contributions and could be greater
than the Company's estimates. Management believes, however, that its PRP
status at these Superfund sites will not have a material adverse effect on the
Company's business or financial condition because, based on the Company's
experience, it is reasonable to expect that liability will be roughly
proportionate to its volumetric contribution of waste to the sites.
The Company is the primary PRP at three Superfund sites (discussed below).
Other than these three sites, the Company's volumetric contribution exceeds 5%
at only seven Superfund sites (with respect to two of which the Company's
share of liability has been paid) and its volumetric contribution at the five
sites where the Company's liability has not yet been fully paid averages
14.5%. At all other sites, the Company's volumetric contribution is currently
estimated to be less than 5% of the total waste at the site. However, in some
instances the Company's volumetric share of the waste at a site is not the
sole determinant of the Company's share of the remediation costs because some
PRPs are unable to fund their allotted share and the shortfall is divided
among the viable PRPs.
The Brown's Battery site, located in Pennsylvania, was operated by third
party owners in the 1960's and early 1970's. EPA completed its study of this
site and issued a final Record of Decision ("ROD") outlining a remediation
plan that employs an innovative technology developed by the Company which has
not yet been used for lead remediation on a production volume basis. EPA sued
the Company and the District Court held the Company liable for the site
cleanup and the Company signed a consent decree to remediate the site with
EPA.
9
<PAGE>
The District Court approved the Decree on June 3, 1996, and Exide intends to
make a $3 million payment for EPA's past cost on July 2, 1996. The decree
proposes remediation using the innovative technology. This innovative
technology approach is believed to be lower in cost than other prevailing
options and offers to the Company and EPA additional significant potential
enhancements for remediation of other similar sites. The incremental cost of
remediation for the innovative technology approach is estimated to be
approximately $16.0 million, a substantial portion of the total remedial costs
constitute capital improvements. If the innovative technology is not feasible,
the alternative remediation plan, which entails relocation of the contaminated
soil, would be employed at a cost (estimated by EPA) of approximately $30
million. The Company has tested and is actively pursuing design, development
and additional testing of the innovative technology. The Company is also
actively pursuing recovery under prior insurance policies as discussed below.
The Company has established its reserves based upon the innovative technology
remediation plan, net of amounts to be capitalized and not considering
potential insurance recovery.
The Company is also the primary PRP at the Wortham Lead Salvage State
Superfund Site, located in Mabank, Texas, another site that was owned and
operated by third parties. The estimated cost of remediating the Wortham site
is between $520,000 and $770,000. The Texas Natural Resources Conservation
Commission ("TNRCC") has amended the Record of Decision for this site. The
Company believes that the revised approach would reduce the cost of
remediating this site by roughly 50% as compared to the original remedy. The
Company has until July 9, 1996 to submit a good faith offer to perform the
amended ROD remedy. As an alternative to submitting a good faith offer, the
TNRCC has given the Company an opportunity to pursue site remediation under
the TNRCC Voluntary Cleanup Program. This alternative is being evaluated and
the Company is negotiating with the TNRCC over the requirements of the program
change. Until that process is completed, the Company cannot determine the cost
of remediating this site. Nevertheless, management does not believe that the
costs incurred at this site will have a material adverse effect of the
Company's business or financial condition.
The third site at which the Company has been the primary PRP is the Jones
Tire & Battery Superfund Site in Alabama. Like the other sites listed above,
the Company never owned or operated this site. Accordingly, the Company's
volumetric share of the waste found at this site was fairly small (less than
2%). Because of the large number of non-paying PRPs, however, the Company has
paid the largest single share of the expenses to date. The paying PRPs have
collectively paid nearly $4 million at this site, of which the Company has
paid approximately $1.43 million. Site remediation was completed in May 1995
and the EPA issued a letter in August 1995 stating that no further remedial or
investigative action was needed at this site. However, EPA has referred the
matter to the State of Alabama Department of Environmental Management ("ADEM")
for closure. The Company does not expect that any additional expenses
associated with this site will have a material adverse effect on the Company's
business or financial condition. The Company has commenced litigation against
those PRPs who have declined to fund their share of the cleanup and currently
believes that much of the additional funds which the Company has been forced
to expend on this matter will be recovered through that litigation.
The Company is also involved in the assessment and remediation of various
other properties, including certain Company-owned or -operated facilities.
Such assessment and remedial work is being conducted pursuant to a number of
state, federal and provincial environmental laws and with varying degrees of
involvement by state, federal and provincial authorities. Where reasonably
estimable, the costs of such projects have been accrued in reserves
established by the Company, as discussed further below. In addition, certain
environmental matters concerning the Company are pending with regulatory
agencies.
South Carolina environmental officials alleged that the Company improperly
disposed of soil from the Company's Greer, South Carolina facility in 1991.
Without acknowledging any wrongdoing on its part, the Company, in consultation
with South Carolina authorities, reexcavated and disposed of the soil. Federal
authorities fully investigated the incident, and declined to take civil or
criminal action against the Company. In a related matter the Company entered
into a Consent Order with State environmental authorities to conduct
investigatory and remedial action at its Greer facility and residential areas
adjacent to the facility.
10
<PAGE>
On January 14, 1994, the Company acquired a vacant manufacturing facility
located in Bristol, Tennessee which the Company has converted to a battery
manufacturing facility. While the facility was being used for manufacturing
operations by Unisys Corporation ("Operating Owner"), soil and groundwater
contamination was identified at the site which led to its designation by the
State of Tennessee as a state "Superfund" site in 1988. Under the direction of
the State of Tennessee, the Operating Owner has, at its own expense, completed
a soil remediation at the site and is in the process of completing a
groundwater cleanup.
The Company purchased the facility from a subsequent owner of the property.
As part of the Company's purchase, the Seller agreed to indemnify the Company
with respect to environmental conditions in existence at the time of purchase.
The State of Tennessee has informed the Company that it considers the
Operating Owner to be primarily responsible for any contamination existing at
the facility at the time of the Company's purchase. The Company is in
communication with the Operating Owner on a periodic basis regarding the
status of the remediation. The Company does not currently believe that the
environmental condition of the facility will have a material adverse effect on
the Company's business or financial condition.
While the ultimate outcome of the foregoing environmental matters is
uncertain, after consultation with legal counsel, management does not believe
the resolution of these matters will have a material adverse effect on the
Company's business or financial condition. The Company's policy is to accrue
for environmental costs when it is probable that a liability has been incurred
and the amount of such liability is reasonably estimable.
Pursuant to a refinancing, the Company agreed with a former holder of its
preferred stock which had sold the Company a portion of its business to
provide certain environmental management services relating to twelve landfills
and other sites not operated by the Company at which lead contamination by
such businesses and others is alleged and to indemnify such holder from
certain potential environmental liabilities relating to such sites. The
Company established an additional environmental reserve of $6.0 million with
respect to this liability, which the Company believes will be adequate.
The Company has established reserves for onsite and offsite environmental
remediation costs and believes that such reserves are adequate. These reserves
consist of amounts accrued for active Company facilities, closed facilities,
and 11 of the Superfund sites. They also include a general allowance for other
Superfund sites where the Company's exposure is estimated to be less than
$100,000 per site. Because environmental liabilities are not accrued until
liability is determined to be probable and reasonably estimable, not all
potential future environmental liabilities have been included in the Company's
environmental reserves and, therefore, additional earnings charges are
possible.
The Company believes it has insurance coverage for liability and defense
costs arising out of certain sites, and has put its insurance companies on
notice where applicable. While none of the Company's insurance carriers have
acknowledged coverage for cleanup costs at any sites, certain of the Company's
insurance carriers have tendered defense costs under a reservation of rights
at the Brown's Battery site discussed above and the Granite City, Illinois
(NL/Taracorp) site. Also, one insurance company has paid a settlement for
bodily injury at the Brown's site.
The Company believes that it ultimately will be successful in establishing
coverage for liabilities for remediation arising out of those sites. The
Company is engaged in discussions with various insurers with respect to other
sites, although no agreements have been reached with respect to coverage for
those other sites. The Company does not currently maintain environmental
impairment liability insurance in light of the unavailability of meaningful
coverage and the prohibitive cost of obtaining even limited coverage. The
coverage the Company has results from insurance policies issued prior to 1982
for general liability, which policies included coverage for offsite liability.
The Company also may have limited coverage for certain costs under policies
issued between 1983 and 1985.
In 1993, the CNA Insurance Companies filed a declaratory judgement action in
the Superior Court of Delaware, in Wilmington, Delaware. In the lawsuit,
Continental Casualty Company, et al. v. General Battery
11
<PAGE>
Corporation, et al., (the "CNA Action") CNA seeks to have the court determine
that CNA owes no duty to defend or reimburse General Battery Corporation, Dixie
Metals Company and certain other Exide subsidiaries for costs of defending
environmental actions against those companies and for response costs, property
damage and bodily injury claims arising from environmental conditions allegedly
caused, suffered or allowed by those companies. In addition to suing the
Company, the CNA Action names Northwest Industries, Fruit of the Loom and over
75 other insurance companies as defendants.
The Company intends to vigorously defend the CNA Action. While the ultimate
outcome of the CNA Action is uncertain, after consultation with legal counsel,
management does not believe the resolution of these matters will have a
material adverse effect on the Company's business or financial condition or
results of operations. See Note 13 to notes to consolidated financial
statements appearing elsewhere herein.
The Company has taken an active role in addressing environmental issues
associated with its business and has a staff of more than 70 persons, not
including consultants, focusing on environmental, safety and health matters.
The Company maintains numerous permits with the EPA, various state agencies and
provincial regulatory authorities which allow the Company to transport, store
and recycle spent lead acid batteries, lead-bearing hazardous wastes and
certain other hazardous wastes in the United States.
To protect the environment, minimize future liability and help ensure a
stable supply of lead to its battery manufacturing facilities, the Company has
developed a comprehensive materials recycling program. Under this program, the
Company obtains spent lead-acid batteries through its wholesale distribution
outlet system and lead-bearing materials from third parties. These materials
are transported to the Company's secondary lead smelting facilities. Batteries
are separated at the smelters into three constituent units: lead, dilute
sulfuric acid and plastic casing material. The lead is reclaimed and refined
into lead alloys for use at the Company's battery manufacturing facilities. The
plastic from battery cases is broken into pieces and extruded into pellets by
adding strengtheners and other additives. The pellets are then used at the
Company's battery casing molding facility to make new battery cases. The dilute
sulfuric acid solution is neutralized and discharged in accordance with
Federal, State and provincial permits. The Company is investigating methods of
recycling spent battery acid. As described above, the Company has been actively
involved in the development of a new technology for remediation of lead
contaminated soils at the Brown's Battery site, which, if successful, may have
significant application in the secondary smelting of lead generally.
Europe. With regard to its overseas operations, the Company is subject to
numerous environmental, health and safety requirements and is exposed to
differing degrees of liabilities and compliance costs arising from its past and
current manufacturing and recycling activities. The laws and regulations
applicable to such activities differ from country to country and also
substantially differ from United States laws and regulations. Except as
disclosed herein, the Company believes, based upon reports from its foreign
subsidiaries and/or independent qualified opinions, that it is in substantial
compliance with all material environmental, health and safety requirements in
each country. The Company believes it has adequate reserves for environmental
remediation costs in Europe. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Future Environmental
Developments."
At two Tudor lead-acid battery manufacturing facilities in Spain (Malpica and
Manzanares) and at the Sonalur secondary lead smelting facility in Azambuja,
Portugal, treated wastewater is discharged in excess of permit levels for lead.
At the Torrejon de Ardoz nickel-cadmium battery manufacturing facility, treated
wastewater is discharged in excess of permit levels for cadmium. The Company is
working cooperatively with appropriate authorities to make improvements to the
wastewater treatment plants at each facility. It is possible that the Company
could be subject to fines or penalties with regard to these violations. The
cost to upgrade the facilities to attain compliance is not expected to be
material. The subject violations are not expected to interfere with continued
operations at the subject facilities.
The CEAc battery manufacturing facilities in Auxere and Nimes, France do not
currently meet lead air emission standards established by the French Ministry
of Environment. The local enforcement authority is aware
12
<PAGE>
of the situation in Nimes, and has granted the Company an additional two year
period within which to achieve compliance with those standards. A similar
approach is being undertaken at the Auxere facility. Management believes that
the cost of achieving compliance with the air limits at both these facilities
is not material.
In addition, the CEAc lead-acid battery manufacturing facilities in Vierzon,
France and Weiden, Germany are not in compliance with certain limits contained
in these facilities' wastewater discharge permits. The German authorities have
temporarily suspended the limits; negotiations to resolve this matter are
continuing. Management at the Vierzon facility submitted a compliance plan and
is coordinating its efforts with local authorities. The cost of any upgrades
required to achieve compliance at these facilities are not expected to be
material.
CEAc's German subsidiary, Sonnenschein, GmbH, has signed a consent order with
the administrative enforcement authorities to complete remediation of a river
which flows along the lead-acid battery manufacturing facility in Budingen,
Germany. That cleanup is proceeding and CEAc has established a reserve to cover
the cost of completing the project; the Company does not expect the cost of
such remediation to be material.
The Company's Polish subsidiary, Centra, is a former state-owned entity.
Under the sales agreement with the Polish State Treasury, the Company is
obligated to spend $1.0 million per annum in capital improvements in
environmental controls at the Centra facilities. The funds needed to cover this
commitment are included in CEAc's capital budget. Management believes that
these funds will be needed to ensure compliance with anticipated new air
regulations in Poland.
The Company expects that its overseas operations will continue to incur
capital and operating expenses in order to maintain compliance with evolving
environmental, health and safety requirements or more stringent enforcement of
existing requirements in each country. In addition, accelerated consolidation
of Exide's European operations could increase its expenditures.
(D) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS AND EXPORT
SALES
See Note 17 of Notes to the Company's Consolidated Financial Statements
appearing elsewhere herein.
ITEM 2. PROPERTIES
The chart below lists the location of the principal facilities of the
Company. All of the facilities are owned unless otherwise indicated. In North
America, all of such owned properties and the leases for the leased properties
are subject to liens under the Credit Agreement. The leases for leased
facilities expire at various dates through 2001. In addition to these
properties, Tudor holds a portfolio of undeveloped land totaling approximately
39 acres of which it divests portions from time to time.
<TABLE>
<CAPTION>
APPROXIMATE
LOCATION SQUARE FOOTAGE USE
- ------------------------ ---------------- ----------------------------------------------
<S> <C> <C> <C>
North America:
Auburn Hills, MI 5,000 (leased) OEM Engineering and Sales
Baton Rouge, LA 197,000 Secondary Lead Smelting
Bloomfield Hills, MI 10,000 (leased) Executive Offices
Bristol, TN 120,000 (leased) Automotive Accessory Manufacturing
Bristol, TN 510,000 (leased) Battery Manufacturing (renovations in progress)
Burlington, IA 189,000 Battery Manufacturing
Cannon Hollow, MO 128,000 Secondary Lead Smelting
Cooper, TX 30,000 (leased) Starter and Alternator Manufacturing
Corvallis, OR 332,000 Separator and Other Manufacturing
Corydon, IN 161,000 Separator Manufacturing
Denver, CO 64,000 Distribution Center
Drummondville, Quebec,
Canada 100,000 Distribution Center
Frankfort, IN 206,000 Battery Manufacturing
Frankfort, IN 211,000 Distribution Center
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
LOCATION SQUARE FOOTAGE USE
- ------------------------ --------------- ---------------------------------------------
<S> <C> <C> <C>
Greer, SC 130,000 Battery Manufacturing
Hamburg, PA 149,000 Battery Manufacturing
Hamburg, PA 30,000 Distribution Center
Indianapolis, IN 135,000 Starter and Alternator Manufacturing
Lampeter, PA 82,000 Battery Plastics Manufacturing
Logansport, IN 197,000 Battery Manufacturing
Manchester, IA 198,000 Battery Manufacturing
Maple, Ontario, Canada 100,000 (leased) Distribution and Administration
Maple, Ontario, Canada 179,000 Battery Manufacturing
Memphis, TN 4,000 (leased) Distribution Center
Muncie, IN 174,000 Secondary Lead Smelting
North Bay, Ontario,
Canada 30,000 (leased) Battery Charger Manufacturing
Phoenix, AZ 31,000 (leased) Distribution Center
Reading, PA 72,000 Engineering and Research and Development
Reading, PA 125,000 Secondary Lead Smelting and poly reprocess
Reading, PA 15,000 (leased) Technical Center
Reading, PA 135,000 Administrative Offices
Reading, PA 336,000 Battery Manufacturing
Reading, PA 77,000 Distribution Center
Salina, KS 250,000 (leased) Battery Manufacturing
Salina, KS 50,000 Distribution Center
Sumner, WA 56,000 (leased) Distribution Center
Travelers Rest, SC 62,000 (leased) Distribution Center
Europe and Other:
Graz, Austria 144,000 Industrial Battery Manufacturing
Florival, Belgium 290,000 Distribution Center
Herlev, Denmark 15,000 Executive Offices
Witham Essex, England 20,000 (leased) Executive Offices
Bristol, England 5,000 Warehouse
Over Hulton, England 279,000 Industrial Battery Manufacturing
Vantaa, Finland 133,000 (leased) SLI Battery Manufacturing
Auxerre, France 176,000 SLI Battery Manufacturing
Fougeres, France 38,000 Industrial Battery Manufacturing
Gennevilliers, France 55,000 Executive Offices
Lille, France 484,000 Industrial Battery Manufacturing
Nanterre, France 31,000 SLI Battery Manufacturing
Nimes, France 120,000 SLI Battery Manufacturing
Peronne, France 96,000 Battery Plastics Manufacturing
Pont Ste Maxence,
France 71,000 Secondary Lead Smelting
Vierzon, France 174,000 Industrial Battery Manufacturing
Berlin, Germany 99,000 Distribution Center
Budingen, Germany
(two) 258,000 Industrial Battery Manufacturing
15,000 Lithium Cells Manufacturing
Kassel, Germany 212,000 SLI and Industrial Manufacturing
Soest, Germany 386,000 Industrial Battery Manufacturing
Weiden, Germany 208,000 Industrial Battery Manufacturing
Schimitari, Greece 69,000 SLI Battery Manufacturing
Maarssen, Holland 26,000 Executive Offices
Avellino, Italy 35,000 Lids and Containers Manufacturing
Bergamo, Italy 203,000 Lids, Containers and Separators Manufacturing
Casalnuovo, Italy 483,000 Industrial Battery Manufacturing
Fumane, Italy 65,000 SLI Battery Manufacturing
Romano Di Lombardia,
Italy 266,000 SLI Battery Manufacturing
Horten, Norway 108,000 (leased) Industrial Battery Manufacturing
Czarnkow, Poland 112,000 Sundry Batteries Manufacturing
Poznan, Poland (five) 887,000 SLI Battery Manufacturing
Castanheira, Portugal 471,000 SLI and Industrial Battery Manufacturing
Ilhavo, Portugal 54,000 Manual Tools Manufacturing
Azambuja (Sonalur),
Portugal 21,000 Secondary Lead Smelting
Azambuja (Azai),
Portugal 21,000 Lids and Containers Manufacturing
</TABLE>
14
<PAGE>
<TABLE>
<CAPTION>
APPROXIMATE
LOCATION SQUARE FOOTAGE USE
- ---------------------- --------------- -----------------------------------------------
<S> <C> <C> <C>
Lisbon, Portugal 12,000 Executive Offices
Azuqueca de Henares,
Spain 434,000 SLI Battery Manufacturing and Research
Torrejon de Ardoz,
Spain 54,000 Industrial Battery and NiCad Manufacturing
Loeches, Spain 12,000 (leased) Traction Chargers Manufacturing
Malpica, Zaragoza,
Spain 213,000 SLI Battery Manufacturing
S. Esteban de Gormaz
(Mejorsa), Spain 63,000 Secondary Lead Smelting
Madrid, Spain 38,000 (leased) Executive Offices
Manzares, Spain 438,000 SLI Battery Manufacturing
Zaragoza, Spain 248,000 Industrial Battery Manufacturing
Nol, Sweden 447,000 SLI and Industrial Battery Manufacturing
Izmir, Turkey 64,000 SLI Battery Manufacturing
Cwmbran, Wales 105,000 Executive Offices and SLI Battery Manufacturing
</TABLE>
In addition, the Company temporarily operates an SLI battery manufacturing
facility in Dagenham, England, which includes some executive offices. The
Company also leases distribution outlets in Europe.
The Company believes that its facilities are in good operating condition,
adequately maintained, and suitable to meet its present needs and future
plans.
ITEM 3. LEGAL PROCEEDINGS
A patent infringement suit was filed in the U.S. District Court in Oregon
against the Company in January 1995 by Tekmax, Inc. The suit claims
infringement of three Tekmax patents dealing with a device to insert battery
plates into battery separators and processes for doing so. The complaint seeks
damages in excess of the jurisdictional requirement of $50,000 (although
plaintiff requested $6 million before the suit was filed). In the course of
trial preparation, plaintiff voluntarily dismissed the claims related to the
infringement of one of the patents and Exide obtained summary judgment as to
the claims of one other patent. The trial of the claims related to the single
patent now in controversy is scheduled to begin in July, 1996. The Company
anticipates a favorable result.
The Company is, or recently was, involved in several lawsuits or claims all
of which alleged a common complaint: the Company sold used batteries as new.
Paramount among these was Eddie Walton Davis, et al v. Exide Corporation which
purported to be a class action brought on behalf of more than 1,000 consumers
who purchased allegedly used batteries as new. This suit was initiated in the
Circuit Court of Barbour County, Alabama, and sought unspecified compensatory
and punitive damages. The trial court certified the suit as a class action.
The Company successfully sought a writ of mandamus from the Alabama Supreme
Court which decertified the class. The case was dismissed without prejudice on
June 12, 1996.
Charlie Mathews v. Exide is a purported class action suit brought in the
Circuit Court of Montgomery, Alabama. The suit purports to represent resellers
of Exide batteries who received used batteries which were represented as new.
The Company has answered the complaint, denied the essential allegations and
will vigorously defend this suit which seeks unspecified damages. This matter
is currently in the discovery phase and should be set for trial in 1997.
Charles Harris v. Exide is a case brought by a former Exide branch manager
who alleges he was fired for refusing to sell used batteries as new. The
Company has filed a motion for summary judgment with the trial court, the U.S.
District Court for the Northern District of Alabama. Should the Company's
motion fail to dispose of this matter, the case will be tried later this year
or in 1997.
The Company brought a collection suit against a former customer, Charles E.
"Bo" Keever, in the General Court of Justice, Superior Court Division, State
of North Carolina, County of Caldwell. The defendant has asserted a
counterclaim against the Company, alleging that the batteries he was sold were
not "fresh." Pursuant to local rules this matter will soon be subject to non-
binding arbitration. If this matter is not resolved in the arbitration
process, it will probably go to trial in 1997.
15
<PAGE>
Jason McLaughlin, operating under the trade name Discount Outlet has
initiated suit against the Company in the U.S. District Court of the District
of Alabama, Southern Division. The plaintiff claims that the Company sold him
batteries which were not "fresh". The plaintiff seeks unspecified compensatory
and punitive damages. The Company will vigorously defend this action and it
will probably be set for trial in June, 1997.
Charlie Craig of Craig Batteries in Athens, Alabama has threatened to bring
suit in Madison County, Alabama alleging that the Company sold him used
batteries as new. To date he has not filed suit.
In addition, the Company is involved in routine litigation incidental to the
conduct of its business. Based on consultation with legal counsel, management
does not believe that any of the litigation to which the Company is a party
will have a material adverse effect on the Company's business, financial
condition, or results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Common Stock has been listed and traded on the New York Stock Exchange
under the symbol EX since October 29, 1993. The reported range of the high and
low prices of the Common Stock on the New York Stock Exchange Composite Tape
and dividends paid are shown in the following table for the periods indicated.
<TABLE>
<CAPTION>
SALES PRICES QUARTERLY
---------------- CASH
HIGH LOW DIVIDENDS
------ ------ -----------
(PER SHARE)
<S> <C> <C> <C>
Fiscal 1995:
First Quarter................................. $ 50 1/4 $ 35 5/8 $0.02
Second Quarter................................ 53 1/2 45 5/8 0.02
Third Quarter................................. 56 1/4 47 0.02
Fourth Quarter................................ 57 1/2 32 3/4 0.02
Fiscal 1996:
First Quarter................................. $ 44 1/2 $ 29 1/2 $0.02
Second Quarter................................ 53 7/8 42 1/2 0.02
Third Quarter................................. 50 42 1/4 0.02
Fourth Quarter................................ 51 1/8 23 1/4 0.02
</TABLE>
At June 27, 1996 the reported last sale price of the stock was $23 1/4. As
of June 6, 1996, there were 471 record holders of Common Stock.
16
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
FISCAL YEAR ENDED MARCH 31,
------------------------------------------------------------
1992 1993 1994 1995 1996
-------- -------- -------- ---------- ----------
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA:
Net Sales (a)........... $593,626 $578,755 $679,649 $1,198,546 $2,342,616
Gross Profit............ 118,475 128,757 158,253 265,680 554,385
Selling, General and
Administrative
Expenses............... 83,645 81,587 96,495 201,518 425,162
Operating Income........ 34,830 47,170 61,758 64,162 129,223
Interest Expense........ 34,364 35,261 33,150 52,565 120,600
Income Taxes............ 14,100 3,400 10,794 5,160 6,300
Income before
Extraordinary Loss and
Cumulative Effect of
Accounting Change...... 6,656 5,153 17,217 4,491 939
Extraordinary Loss...... -- (10,363)(b) -- (3,597)(c) (9,600)(d)
Cumulative effect of
accounting change(e)... -- -- (12,711) -- --
Net Income (Loss)....... 6,656 (5,210) 4,506 894 (8,661)
Preferred dividends..... 6,986 4,996 -- -- --
Net income (loss)
applicable to common
stock.................. (330) (10,206) 4,506 894 (8,661)
Net income (loss) common
or common equivalent
per share.............. (0.04) (1.22) 0.41 0.06 (0.42)
BALANCE SHEET DATA
(At End of Period):
Working Capital......... 122,906 132,339 153,711 395,875 604,423
Property, Plant and
Equipment, net......... 139,494 136,392 181,147 423,876 578,722
Total Assets............ 463,679 474,868 629,090 1,637,589 2,711,429
Total Debt.............. 274,866 305,562 291,821 645,135 1,340,025
Preferred Stock......... 88,325 6,462 -- -- --
Common Stockholders'
Equity (Deficit)....... (10,013) 45,096 164,450 413,230 439,400
OTHER DATA:
EBITDA (a)(f)........... 82,077(g) 72,427 91,465 110,759 230,131
Ratio of Earnings to
Fixed Charges(h)....... 1.5x 1.2x 1.7x 1.2x 1.0x
Capital Expenditures.... 15,426 20,266 47,164 61,257 106,385
Net cash provided by
(used in) operating
activities............. 7,931 24,959 49,364 (69,134) 23,319
Net cash provided by
(used in) investing
activities............. 100,807 (21,845) (54,859) (322,896) (487,091)
Net cash provided by
(used in) financing
activities............. (111,050) (2,948) 38,701 418,314 449,473
SLI Units Sold.......... 17,483 18,075 21,896 32,309 47,866
</TABLE>
- --------
(a) The Company sold its North American industrial battery product line on
June 10, 1991. If the North American industrial battery product line were
excluded, net sales would have been $569.8 million and EBITDA would have
been $58.2 million for fiscal 1992.
(b) During fiscal 1993, the Company recorded a loss of $10.4 million (net of a
tax benefit of $1.9 million) resulting from the early extinguishment of
debt in connection with the refinancing of its previously existing debt.
(c) During fiscal 1995, the Company recorded a loss of $3.6 million (net of a
tax benefit of $2.3 million) resulting from the early retirement of the
former U.S. Credit Agreement in connection with entering a new U.S. Credit
Agreement.
(d) During fiscal 1996, the Company recorded a loss of $9.6 million (net of a
tax benefit of $6.0 million) from the early retirement of debt under the
U.S. Credit Agreement.
(e) Effective April 1, 1993, the Company adopted SFAS 106 which resulted in a
charge of $12.7 million with no income tax effect because of the
uncertainty of deductibility at that time. See Note 8 to the Company's
consolidated financial statements appearing elsewhere herein.
(f) Represents earnings before interest, taxes, depreciation of property,
plant and equipment, amortization of goodwill and equity in earnings of
joint ventures. EBITDA should not be considered as an alternative to net
income as an indicator of the Company's operating performance or to cash
flows as a measure of liquidity. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations" for a discussion of
other commonly used measures of liquidity and operating performance.
(g) Includes the gain on the sale of the North American industrial battery
product line of $22.1 million.
(h) For purposes of computing the ratio of earnings to fixed charges, earnings
consist of income (loss) before income taxes and equity in earnings of
joint ventures plus fixed charges (excluding capitalized interest) and
dividends from joint ventures. Fixed charges consist of interest expense,
amortization of debt expense, capitalized interest, and one-third of rent
expense, representative of the interest factor.
17
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
The mild winters of 1994-1995 and 1995-1996 had a substantial adverse effect
on the Company's results of operations for fiscal 1995 and 1996. See
"Seasonality and Weather."
The Company through its European acquisitions is exposed to foreign currency
risk in most Western European countries, principally France, Spain, Germany,
Italy and the U.K. The Company does not have material operations in countries
whose economies can be classified as hyper-inflationary. Movements of exchange
rates vis-a-vis the U.S. dollar can result in both unrealized and realized
exchange gains or losses. In some instances gains in one currency may be
offset by losses in another as all currencies may not move in unison vis-a-vis
the U.S. dollar. Because it is not possible to forecast future movements in
foreign exchange rates it is the policy of the Company to reduce foreign
currency risk by balancing net foreign currency positions where possible.
RESULTS OF OPERATIONS
Year Ended March 31, 1996 Compared with Year Ended March 31, 1995
Net sales increased $1,144.1 million, or 95.5%, to $2,342.6 million in
fiscal year 1996 compared with fiscal 1995. The sales increase was principally
attributable to the inclusion of CEAc since June 1995 ($749.8 million) and the
incremental effect related to the inclusion of Tudor for the entire twelve
months of fiscal 1996 (six months in fiscal 1995) of $275.5 million. Sales in
fiscal 1996 were also favorably impacted by shipments to Sears Roebuck &
Company, which was a significant new customer added late in the second quarter
of fiscal 1995, growth of the Company's business in the U.K. (net sales
increased $17.4 million) and the inclusion of Evanite, a battery separator
manufacturer, with net sales of $40.7 million, a February 1995 acquisition.
Industrial battery sales (included above) for fiscal year 1996 were $613.6
million versus $130.1 million in fiscal year 1995. See Note 3 to the Company's
consolidated financial statements appearing elsewhere herein.
Gross profit increased $288.7 million while the gross profit margin
increased by 1.5 percentage points in fiscal 1996 versus 1995. The increase in
gross profit was principally the result of the inclusion of CEAc ($222.5
million) and the incremental effect related to the inclusion of Tudor for the
entire twelve months of fiscal 1996 (six months in fiscal 1995) of $90.5
million. The Company's gross profit margin increased due to higher gross
margins in Europe, partially offset by higher lead costs and usage.
Selling, general and administrative expenses increased $223.6 million, or
111.0%, compared to fiscal year 1995, primarily due to the inclusion of CEAc
($149.9 million), and the full year impact of Tudor ($58.7 million), for a
combined $208.6 million of the increase. Additional increases resulted from
the inclusion of Evanite ($4.0 million), and expenses related to the growth in
the U.K. business ($7.0 million).
Operating income increased $65.1 million, or 101.4%, primarily as a result
of the matters discussed above.
Interest expense increased $68.0 million, or 129.4%, in fiscal 1996 compared
to fiscal 1995, principally as a result of the interest cost attributable to
the financing of the Company's European and North American acquisitions,
inclusion of CEAc ($11.6 million) and the incremental expense related to the
inclusion of Tudor for the entire twelve months in fiscal 1996 ($10.0
million).
Other expense, net is primarily comprised of a $5.5 million judgement
related to a patent infringement suit, and loss on the sales of receivables of
$2.6 million, offset by $6.5 million of net European currency transaction
gains.
18
<PAGE>
Income before extraordinary loss was $3.6 million lower in fiscal 1996
compared with fiscal 1995. The extraordinary loss of $9.6 million in fiscal
1996 is related to the writeoff of unamortized deferred financing costs
associated with the early extinguishment of debt. In fiscal 1995, the Company
incurred a $3.6 million writeoff of a similar nature. See Note 6 to the
Company's consolidated financial statements appearing elsewhere herein.
Net income decreased $9.6 million, primarily as a result of the matters
discussed above.
Year Ended March 31, 1995 Compared with Year Ended March 31, 1994
Net sales increased $518.9 million to $1,198.5 million in fiscal 1995
compared with fiscal 1994. The sales increase was principally attributable to
the acquisition of Tudor in October 1994 with net sales of $299.4 million,
including its industrial battery sales of $122.7 million during the period,
the acquisition of BIG on March 30, 1994 with net sales of $74.0 million; and
the full year impact of Battronics (now Exide Canada Ltd.) with net sales of
$64.4 million, which was first included on a consolidated basis in October
1993. In addition, during 1995 the Company began supplying a significant new
customer, Sears Roebuck & Co. Partially offsetting this increase was the
adverse impact of an abnormally warm winter which was experienced both in the
Company's North American and European markets.
Gross profit increased $107.4 million, while gross profit margin fell by 1.1
percentage points in fiscal 1995 versus 1994. The increase in gross profit was
principally the result of the inclusion of Tudor and BIG for $87.5 million and
$20.8 million, respectively, of gross profit. The decrease in profit margin
was due principally to one-time promotional costs associated with Exide's
domestic volume growth, and associated higher manufacturing and transportation
costs.
Selling, general and administrative expenses increased $105.0 million, or
108.8%, compared to the previous year, primarily due to Tudor and BIG of $65.2
million and $14.9 million, respectively, which accounted for approximately
$80.1 million, or 76.3% of the increase. In addition, selling and advertising
increased due to higher sales volume on new and existing accounts, and other
sales promotional activities including racing sponsorships. General and
administrative expenses increased principally due to higher legal fees and
other professional services.
Operating income increased $2.4 million, or 3.9%, primarily as a result of
the matters discussed above.
Interest expense increased $19.4 million, or 58.6% in fiscal year 1995
compared to fiscal 1994, principally as a result of higher debt levels
associated with the financing of Exide's European acquisitions.
SEASONALITY AND WEATHER
The automotive aftermarket is seasonal as retail sales of replacement
batteries are generally higher in the fall and winter (the Company's second
and third fiscal quarters). Accordingly, demand for the Company's automatic
batteries is generally highest in the fall and early winter as retailers build
inventories in anticipation of the winter season. European sales are
concentrated in the fourth calendar quarter (the Company's third quarter), due
to the shipment of batteries for the winter season and the practice of many
industrial battery customers (particularly governmental and quassi
governmental entities) of deferring purchasing decisions until the end of the
calendar year. Demand for automotive batteries is significantly affected by
weather conditions. Unusually cold winters or hot summers accelerate battery
failure and increase demand for automotive replacement batteries. See Note 16
to the Company's consolidated financial statements appearing elsewhere herein.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity requirements arise primarily from the funding of its
seasonal working capital needs, obligations on its indebtedness and capital
expenditures. In addition, the Company has paid cash dividends of $.02 per
share on the common stock in each completed quarter following its initial
public offering.
19
<PAGE>
Historically, the Company has met these liquidity requirements through cash
flows generated from operating activities and with borrowed funds and the
proceeds of sales of accounts receivable. The Company is party to a
receivables purchase agreement under which the other party has committed
(subject to certain exceptions) to purchase selected accounts receivable of
the Company, up to a maximum commitment of $75.0 million. Due to the seasonal
demands of the battery industry, the Company builds inventory in advance of
the typically stronger selling periods during the fall and winter. The
Company's greatest cash demands from operations occur during the months of
June through October. During fiscal 1997 and beyond the Company also expects
to meet its liquidity requirements in the same manner.
Funds generated (used) from operations were $49.4 million, $(69.1) million
and $23.3 million in fiscal 1994, fiscal 1995 and fiscal 1996, respectively.
Because of the seasonality of the Company's business, more funds are typically
generated in its third and fourth fiscal quarters. During fiscal 1996, the
Company's inventories were reduced (before considering the overall increase
from the fiscal 1996 acquisitions) which helped to minimize the effects of the
Company's growth in working capital. Offsetting this were the significant cash
uses for the Company's European restructuring activities, which require large
amounts of cash for severance associated with plant closures. During fiscal
1996, the Company closed 6 plants in Europe and 2 plants in the U.S. All of
this is part of the Company's long-term strategy of reducing its manufacturing
and distribution cost structure, especially in Europe. In the next several
years, the Company will continue to complete the closure of various European
plants which will necessitate cash payments for severance, etc. While the
Company believes that a large portion of its cash requirements for its
European plant consolidation activities will be generated from operations, it
has substantial liquidity and capital resources through its European
Facilities Agreement and also has substantial borrowing availability under its
U.S. Credit Agreement.
The Company's capital expenditures were $47.2 million in fiscal 1994, $61.3
million in fiscal 1995 and $106.4 million in fiscal 1996. Capital expenditures
increased in fiscal 1995 and 1996 principally due to the acquisition of Tudor
in fiscal 1995 and CEAc and Schuylkill Metals in fiscal 1996. The U.S. Credit
Agreement and the European Facilities Agreement restrict the amount of capital
expenditures which may be made by the Company and its subsidiaries. See Note 6
to the Company's consolidated financial statements. However, the Company
believes that it has sufficient resources for its capital expenditure programs
from operating cash flows and borrowing availability under its existing credit
agreements.
During fiscal 1995 and 1996, as discussed in Note 3 to the consolidated
financial statements, the Company completed several major acquisitions, mostly
in Europe. The financing for these acquisitions resulted from a combination of
equity and debt sources, both in the U.S. and Europe. See Notes 2 and 6 to the
consolidated financial statements. The Company borrowed $229.2 million under
the U.S. Credit Agreement to finance its acquisition of Tudor in October 1994.
In December 1994, the Company completed a public offering of its common stock
with net proceeds of $247.5 million including the underwriters exercise of
their over-allotment option. The net proceeds of that offering were used to
repay revolving loans under the U.S. Credit Agreement and excess proceeds were
invested in short-term, interest bearing investment grade securities. In May
1995, the Company completed the CEAc acquisition for $425.0 million in cash
($553.5 million less assumed debt plus interest from March 31, 1995). The
Company financed the CEAc acquisition through borrowings under the U.S. Credit
Agreement and with the proceeds of a $300 million offering of 10% Senior
Notes, and refinanced approximately $150 million of indebtedness of CEAc
pursuant to a facilities agreement (the "former European Facilities
Agreement").
In December 1995, the Company issued 2.9% Convertible Senior Subordinated
Notes due December 15, 2005, with a face amount of $397.9 million discounted
to $287.8 million, after the underwriters' exercise of their overallotment
option. These notes have a coupon rate of 2.9% with a yield to maturity of
6.75%. The notes are convertible into the Company's common stock at a
conversion rate of 12.5473 shares per $1,000 principal amount at maturity,
subject to adjustments in certain events. The Company used the funds to repay
indebtedness under the U.S. Credit Agreement.
Also, on November 30, 1995, the Company entered into a Pan-European,
multicurrency, multiborrower credit facility ("European Facilities
Agreement"). The facility contains a Tranche A term loan in the amount of
20
<PAGE>
236 million French francs (U.S. $46.9 million), a Tranche B term loan in the
amount of 930 million French francs (U.S. $184.8 million), and a revolving
facility of 1,403 million French francs (U.S. $278.8 million). The Tranche A
term loan matures on November 30, 2000, and the Tranche B term loan matures on
November 30, 2002. Both term loans require semiannual principal payments
throughout their terms. The revolving facility expires on September 30, 2002.
Substantially all of the Company's European bank debt, including indebtedness
under the former European Facilities Agreement that was utilized to finance a
portion of the CEAc acquisition, was refinanced with this European Facilities
Agreement.
As of March 31, 1996, the Company had utilized $11.8 million of its U.S.
Credit Agreement for letters of credit, and $438.7 million was outstanding
under the European Facilities Agreement, including letters of credit.
Obligations under the U.S. Credit Agreement and the European Facilities
Agreement bear interest at fluctuating rates. Increases in interest rates on
such obligations could adversely affect the Company's results of operations
and financial condition. The Company has two interest rate collar agreements
and an interest rate swap agreement which reduce the impact of changes in
interest rates on a portion of the Company's floating rate debt. The collar
agreements effectively limit the LIBOR base interest rate on $100.0 million of
borrowings under the U.S. Credit and European Facilities Agreements to no more
than 8% through December 30, 1997. If interest rates fall below certain
levels, Exide is required to make payments to the counterparties under the
agreements. The Company also has an interest rate swap agreement which
effectively fixes LIBOR interest rates on $50 million at 6.2% through May 16,
1997. See Note 6 to the Company's consolidated financial statements appearing
elsewhere herein.
As of March 31, 1996 the Company had $173.2 million available under its U.S.
Credit Agreement. Effective May, 1996 the maximum capacity was reduced to $165
million subject to certain limitations based on eligible receivables and
inventory. As of March 31, 1996, the Company's European and Canadian
operations had borrowing availability of approximately $56.1 million. See Note
6 to the Company's consolidated financial statements appearing elsewhere
herein.
The Company believes it has adequate reserves for offsite and onsite
environmental remediation costs. See "Business--Environmental, Health and
Safety Matters" and "Future Environmental Developments."
As of March 31, 1996, the Company has significant NOL carryforwards in
Europe and in the United States which may be available, subject to certain
restrictions, to offset future U.S. and European taxable income. See Note 10
to the Company's consolidated financial statements appearing elsewhere herein.
EFFECT OF INFLATION
Inflation has not had a material impact on the operations of the Company
during the past three years. The Company generally has been able to offset the
effects of inflation with price increases, cost-reduction programs and
operating efficiencies.
FUTURE ENVIRONMENTAL DEVELOPMENTS
The Company is subject to extensive federal, state, local and foreign
environmental, health and safety laws and regulations. In the future
environmental, health and safety standards may be more stringent. The Company
anticipates that such standards could cause an increase in the Company's
capital expenditures and operating costs. Until the standards are adopted it
is not possible to estimate these costs with any certainty or to predict
whether they will have a material effect on the Company's financial condition
or results of operations.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Index to Consolidated Financial Statements and Schedule at page F-1
21
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The biographical information under the heading Election of Directors in the
Company's definitive Proxy Statement for its annual meeting of stockholders to
be held on August 14, 1996, is hereby incorporated by reference.
In addition to the executive officers named in the biographical section,
Messr. George J. Tinker is an executive officer.
Mr. Tinker (age 51) was appointed Chief Executive Officer of Exide's
European Operations in June of 1995. Since joining Exide in March 1994, he has
been Chief Executive Officer of Euro Exide Corporation Limited. Prior to
joining Exide, he was a Divisional and Main Board Director of the Ross Group
Plc and prior to that he was the Chief Executive Officer of the Stellar Group.
ITEM 11. EXECUTIVE COMPENSATION
The information under the heading Executive Compensation in the Company's
definitive Proxy Statement for its annual meeting of stockholders to be held
on August 14, 1996, is hereby incorporated by reference.
ITEM 12. DESCRIPTION OF CAPITAL STOCK
The information under the heading Stock Ownership in the Company's
definitive Proxy Statement for its annual meeting of stockholders to be held
on August 14, 1996, is hereby incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the heading Certain Transactions in the Company's
definitive Proxy Statement for its annual meeting of stockholders to be held
on August 14, 1996, is hereby incorporated by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) Index to Financial Statements
See Index to Consolidated Financial Statements and Schedule at page F-1.
(b) Reports on Form 8-K
On January 26, 1996 a report on Form 8-K was filed discussing third quarter
results.
(c) Exhibits Required by Item 601 of Regulation S-K
See Index to Exhibits.
(d) Financial Statement Schedules
See Index to Consolidated Financial Statements and Schedule at page F-1.
22
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED
ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
Exide Corporation
/s/ Arthur M. Hawkins
By: _________________________________
Arthur M. Hawkins
President Principal Executive
Officer
/s/ Alan E. Gauthier
By: _________________________________
Alan E. Gauthier
Principal Financial and Accounting
Officer
Date: June 28, 1996
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS
REPORT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE
REGISTRANT AND IN THE CAPACITIES AND ON THE DATE INDICATED.
/s/ Arthur M. Hawkins /s/ Douglas N. Pearson
By: _________________________________ By: _________________________________
Arthur M. Hawkins Douglas N. Pearson
President, Chairman of the Board Executive Vice President,
and Director President-- North American
Operations and Director
/s/ Alan E. Gauthier /s/ Timothy O. Fisher
By: _________________________________ By: _________________________________
Alan E. Gauthier Timothy O. Fisher
Executive Vice President and Director
Director
/s/ Lawrence M. Wagner /s/ Robert H. Irwin
By: _________________________________ By: _________________________________
Lawrence M. Wagner Robert H. Irwin
Director Director
/s/ Earl Dolive /s/ Arthur R. Taylor
By: _________________________________ By: _________________________________
Earl Dolive Arthur R. Taylor
Director Director
23
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SCHEDULE
<TABLE>
<S> <C>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS.................................... F-2
CONSOLIDATED BALANCE SHEETS................................................. F-3
CONSOLIDATED STATEMENTS OF OPERATIONS....................................... F-4
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY............................. F-5
CONSOLIDATED STATEMENTS OF CASH FLOWS....................................... F-6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.................................. F-7
CONSOLIDATED SUPPORTING SCHEDULE FILED:
II VALUATION AND QUALIFYING ACCOUNTS AND RESERVES......................... F-28
</TABLE>
ALL OTHER SCHEDULES ARE OMITTED BECAUSE THEY ARE NOT APPLICABLE, NOT
REQUIRED, OR THE INFORMATION REQUIRED TO BE SET FORTH THEREIN IS
INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENTS OR IN THE NOTES
THERETO.
F-1
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders of
Exide Corporation:
We have audited the accompanying consolidated balance sheets of Exide
Corporation (a Delaware corporation) and subsidiaries as of March 31, 1995 and
1996, and the related consolidated statements of operations, stockholders'
equity and cash flows for each of the three fiscal years in the period ended
March 31, 1996. These financial statements and the schedule referred to below
are the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements and the schedule based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Exide Corporation and
subsidiaries as of March 31, 1995 and 1996, and the results of their
operations and their cash flows for each of the three fiscal years in the
period ended March 31, 1996, in conformity with generally accepted accounting
principles.
As explained in Note 8 to the financial statements, effective April 1, 1993,
the Company changed its method of accounting for postretirement employee
benefits other than pensions.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The schedule listed in the accompanying
index to consolidated financial statements is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part
of the basic financial statements. This schedule has been subjected to the
auditing procedures applied in our audits of the basic financial statements
and, in our opinion, fairly states in all material respects the financial data
required to be set forth therein in relation to the basic financial statements
taken as a whole.
Arthur Andersen LLP
Philadelphia, Pa.,
June 28, 1996
F-2
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31
----------------------
1995 1996
---------- ----------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents............................. $ 63,361 $ 47,259
Receivables, net of allowance for doubtful accounts of
$23,274 and $45,350.................................. 335,388 600,329
Inventories........................................... 476,481 595,161
Prepaid expenses and other............................ 16,785 28,612
Deferred income taxes................................. 19,388 20,672
---------- ----------
Total current assets................................ 911,403 1,292,033
---------- ----------
PROPERTY, PLANT AND EQUIPMENT:
Land.................................................. 48,320 62,086
Buildings and improvements............................ 124,260 220,546
Machinery and equipment............................... 355,189 463,431
Construction in progress.............................. 28,156 52,704
---------- ----------
555,925 798,767
Less--Accumulated depreciation and amortization....... (132,049) (220,045)
---------- ----------
Property, plant and equipment, net.................... 423,876 578,722
---------- ----------
OTHER ASSETS:
Goodwill, net......................................... 185,111 673,045
Investments in affiliates............................. 36,095 24,446
Deferred financing costs, net......................... 21,590 33,412
Deferred income taxes................................. 33,024 66,747
Other................................................. 26,490 43,024
---------- ----------
302,310 840,674
---------- ----------
Total assets........................................ $1,637,589 $2,711,429
========== ==========
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AND PER-SHARE DATA)
<TABLE>
<S> <C> <C>
CURRENT LIABILITIES:
Short-term borrowings................................. $ 75,010 $ 8,310
Current maturities of long-term debt.................. 51,731 30,477
Accounts payable, trade and other..................... 191,534 279,225
Accrued interest...................................... 5,655 22,248
Accrued compensation.................................. 34,238 105,639
Product warranty reserve.............................. 19,053 37,654
Other current liabilities............................. 138,307 204,057
---------- ----------
Total current liabilities........................... 515,528 687,610
---------- ----------
LONG-TERM DEBT......................................... 518,394 1,301,238
---------- ----------
NONCURRENT RETIREMENT OBLIGATIONS...................... 92,809 127,320
---------- ----------
OTHER NONCURRENT LIABILITIES........................... 70,082 127,211
---------- ----------
COMMITMENTS AND CONTINGENCIES (Notes 13 and 15)
MINORITY INTEREST...................................... 27,546 28,650
---------- ----------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 30,000,000 shares autho-
rized, 19,991,810 and 20,893,693 shares issued and
outstanding.......................................... 200 209
Additional paid-in capital............................ 443,446 490,919
Accumulated deficit................................... (25,837) (36,121)
Notes receivable--stock award plan.................... (1,774) (1,696)
Unearned compensation................................. (1,806) (710)
Minimum pension liability adjustment.................. (5,527) (5,956)
Cumulative translation adjustment..................... 4,528 (7,245)
---------- ----------
Total stockholders' equity.......................... 413,230 439,400
---------- ----------
Total liabilities and stockholders' equity.......... $1,637,589 $2,711,429
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER-SHARE DATA)
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED MARCH 31
-------------------------------------
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
NET SALES............................... $ 679,649 $ 1,198,546 $ 2,342,616
COST OF SALES........................... 521,396 932,866 1,788,231
----------- ----------- -----------
Gross profit.......................... 158,253 265,680 554,385
----------- ----------- -----------
OPERATING EXPENSES:
Selling, marketing and advertising.... 69,810 130,774 272,076
General and administrative............ 26,685 70,744 153,086
----------- ----------- -----------
96,495 201,518 425,162
----------- ----------- -----------
Operating income.................... 61,758 64,162 129,223
INTEREST EXPENSE, net................... 33,150 52,565 120,600
OTHER EXPENSE, net...................... 597 874 1,893
----------- ----------- -----------
Income before income taxes, minority
interest, extraordinary loss and
cumulative effect of accounting
change............................... 28,011 10,723 6,730
PROVISION FOR INCOME TAXES.............. 10,794 5,160 6,300
----------- ----------- -----------
Income before minority interest,
extraordinary loss and cumulative
effect of accounting change.......... 17,217 5,563 430
MINORITY INTEREST....................... -- 1,072 (509)
----------- ----------- -----------
Income before extraordinary loss and
cumulative effect of accounting
change............................... 17,217 4,491 939
EXTRAORDINARY LOSS RELATED TO EARLY
RETIREMENT OF DEBT, net of income tax
benefit of $2,320 and $5,958........... -- (3,597) (9,600)
CUMULATIVE EFFECT OF ACCOUNTING CHANGE--
ADOPTION OF SFAS 106................... (12,711) -- --
----------- ----------- -----------
Net income (loss)................... $ 4,506 $ 894 $ (8,661)
=========== =========== ===========
NET INCOME (LOSS) PER COMMON AND COMMON
EQUIVALENT SHARE:
Income before extraordinary loss and
cumulative effect of accounting
change............................... $ 1.56 $ 0.28 $ 0.05
Extraordinary loss.................... -- (0.22) (0.47)
Cumulative effect of accounting
change............................... (1.15) -- --
----------- ----------- -----------
Net income (loss)................... $ 0.41 $ 0.06 $ (0.42)
=========== =========== ===========
WEIGHTED AVERAGE NUMBER OF COMMON AND
COMMON EQUIVALENT SHARES OUTSTANDING... 11,058,185 16,191,075 20,384,806
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE FISCAL YEARS ENDED MARCH 31, 1994, 1995 AND 1996
(IN THOUSANDS)
<TABLE>
<CAPTION>
NOTES MINIMUM FOREIGN
ADDITIONAL RECEIVABLE-- PENSION CURRENCY
PREFERRED COMMON PAID-IN ACCUMULATED STOCK AWARD UNEARNED LIABILITY TRANSLATION
STOCK STOCK CAPITAL DEFICIT PLAN COMPENSATION ADJUSTMENT ADJUSTMENT
--------- ------ ---------- ----------- ------------ ------------ ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCES AT MARCH 31,
1993................... $ 6,462 $ 1 $ 75,848 $(29,676) $ -- $ -- $ (149) $ (928)
Net income for fiscal
1994.................. -- -- -- 4,506 -- -- -- --
Redemption of preferred
stock................. (6,462) -- -- -- -- -- -- --
Conversion of existing
common stock.......... -- 83 (83) -- -- -- -- --
Issuance of common
stock grants.......... -- 8 1,818 -- -- -- -- --
Public offerings of
common stock.......... -- 56 116,514 -- -- -- -- --
Cash dividends paid
($0.02/share)......... -- -- -- (276) -- -- -- --
Minimum pension
liability adjustment.. -- -- -- -- -- -- (1,182) --
Translation adjustment. -- -- -- -- -- -- -- (264)
Notes receivable--stock
award plan............ -- -- -- -- (1,826) -- -- --
------- ---- -------- -------- ------- ------- ------- --------
BALANCES AT MARCH 31,
1994................... -- 148 194,097 (25,446) (1,826) -- (1,331) (1,192)
Net income for fiscal
1995.................. -- -- -- 894 -- -- -- --
Public offering of
stock................. -- 52 247,466 -- -- -- -- --
Compensation under
stock grants.......... -- -- 1,935 -- -- (1,806) -- --
Forfeiture of common
stock grants.......... -- -- (52) -- 52 -- -- --
Cash dividends paid
($0.08/share)......... -- -- -- (1,285) -- -- -- --
Minimum pension
liability adjustment.. -- -- -- -- -- -- (4,196) --
Translation adjustment. -- -- -- -- -- -- -- 5,720
------- ---- -------- -------- ------- ------- ------- --------
BALANCES AT MARCH 31,
1995................... -- 200 443,446 (25,837) (1,774) (1,806) (5,527) 4,528
Net loss for fiscal
1996.................. -- -- -- (8,661) -- -- -- --
Common stock issued for
acquisitions.......... -- 9 48,135 -- -- -- -- --
Common stock issued
under employee stock
purchase plan......... -- -- 100 -- -- -- -- --
Forfeiture of common
stock grants.......... -- -- (762) -- 78 709 -- --
Amortization of
unearned compensation. -- -- -- -- -- 387 -- --
Cash dividends paid
($0.08/share) ........ -- -- -- (1,623) -- -- -- --
Minimum pension
liability adjustment.. -- -- -- -- -- -- (429) --
Translation adjustment. -- -- -- -- -- -- -- (11,773)
------- ---- -------- -------- ------- ------- ------- --------
BALANCES AT MARCH 31,
1996................... $ -- $209 $490,919 $(36,121) $(1,696) $ (710) $(5,956) $ (7,245)
======= ==== ======== ======== ======= ======= ======= ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-5
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE FISCAL YEAR ENDED MARCH 31
------------------------------------
1994 1995 1996
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)....................... $ 4,506 $ 894 $ (8,661)
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities--
Depreciation and amortization........ 30,613 48,524 106,717
Cumulative effect of accounting
change.............................. 12,711 -- --
Extraordinary loss................... -- 3,597 9,600
Deferred income taxes................ 7,266 (863) 300
Original issue discount on notes..... 7,941 8,942 12,411
Provision for losses on accounts
receivable.......................... 379 3,238 4,016
Minority interest.................... -- 1,072 (509)
Changes in assets and liabilities
excluding effects of acquisitions--
Receivables.......................... (11,912) (32,608) (24,973)
Inventories.......................... (7,701) (138,568) 46,832
Prepaid expenses and other........... (5,960) 14,522 16,522
Payables and accrued expenses........ 19,636 32,984 (131,035)
Other, net........................... (8,115) (10,868) (7,901)
---------- ----------- -----------
Net cash provided by (used in)
operating activities.............. 49,364 (69,134) 23,319
---------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitions of certain businesses..... (7,707) (262,995) (401,325)
Capital expenditures................... (47,164) (61,257) (106,385)
Proceeds from sale of property, plant
and equipment......................... 12 1,356 20,619
---------- ----------- -----------
Net cash used in investing activi-
ties.............................. (54,859) (322,896) (487,091)
---------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (decrease) in short-term
borrowings............................ -- 20,402 (71,701)
Repayment of U.S. Credit Agreement
borrowings............................ (66,000) (105,000) (194,500)
Borrowings under U.S. Credit Agreement. -- 286,500 --
Repayment of European term loans....... -- (1,421) (51,265)
Repayment of Former European Facilities
Agreement............................. -- -- (156,873)
Borrowings under European Facilities
Agreement............................. -- -- 436,940
Issuance of 2.9% Convertible Senior
Subordinated Notes.................... -- -- 287,797
Issuance of 10% Senior Notes........... -- -- 300,000
Repayment of Guaranteed Unsecured Loan
Notes................................. -- -- (35,282)
Repayment of Spanish Convertible Notes. -- -- (23,675)
Redemption of preferred stock.......... (6,462) -- --
Proceeds from public offerings, net of
fees.................................. 116,499 247,519 --
Dividends paid......................... (276) (1,284) (1,623)
Decrease in other debt................. (5,060) (4,211) (9,455)
Debt issuance costs.................... -- (24,191) (30,890)
---------- ----------- -----------
Net cash provided by financing
activities........................ 38,701 418,314 449,473
---------- ----------- -----------
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS.................... -- 3,370 (1,803)
---------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS............................. 33,206 29,654 (16,102)
CASH AND CASH EQUIVALENTS, BEGINNING OF
PERIOD.................................. 501 33,707 63,361
---------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD. $ 33,707 $ 63,361 $ 47,259
========== =========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid during the period for--
Interest (net of amount capitalized). $ 24,080 $ 41,442 $ 86,557
Income taxes......................... $ 2,349 $ 4,047 $ 9,243
</TABLE>
The accompanying notes are an integral part of these statements.
F-6
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER-SHARE DATA)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Nature of Operations
Exide Corporation and all of its majority-owned subsidiaries (the "Company")
is a leading manufacturer and marketer of starting, lighting and ignition
("SLI") batteries. The Company produces SLI batteries for both the aftermarket
and original equipment manufacturers ("OEM") markets in North America and
Europe. The Company also manufactures and markets industrial batteries in
Europe. Industrial sales include both standby and traction battery lines.
Individual customers include telecommunication companies, European navies and
the electric vehicle operations of large European companies. Other products
manufactured include batteries for trucks, farm equipment and other off-road
vehicles, boats, garden tractors and golf carts, battery chargers and
accessories, wheel weights, and remanufactured starters and alternators.
Seasonality and Weather
The automotive aftermarket is seasonal as retail sales of replacement
batteries are generally higher in the fall and winter (the Company's second
and third fiscal quarters). Accordingly, demand for the Company's automotive
batteries is generally highest in the fall and early winter as retailers build
inventories in anticipation of the winter season. European sales are
concentrated in the fourth calendar quarter (the Company's third fiscal
quarter), due to the shipment of batteries for the winter season and the
practice of many industrial battery customers (particularly governmental and
quasi governmental entities) of deferring purchasing decisions until the end
of the calendar year. Demand for automotive batteries is significantly
affected by weather conditions. Unusually cold winters or hot summers
accelerate battery failure and increase demand for automotive replacement
batteries.
Major Customers
The Company has a number of major customers both in North America and in
Europe. The Company's five largest customers are large U.S. retailers which
account for 40%, 26% and 16% of consolidated net sales in fiscal 1994, 1995
and 1996, respectively. Included among these five customers is NAPA, a North
American customer, which accounted for approximately 16.2%, 9.4% and 5.3% of
consolidated net sales in fiscal 1994, 1995 and 1996, respectively.
Principles of Consolidation
The consolidated financial statements include the accounts of Exide
Corporation and all of its majority- owned subsidiaries. All significant
intercompany transactions have been eliminated.
The investments in and the operating results of 20%- to 50%-owned companies
are included in the consolidated financial statements on the basis of the
equity method of accounting. The Company's equity in net income (loss) of
these companies is not material.
Foreign Currency Translation
Assets and liabilities of the Company's foreign subsidiaries and affiliates
are translated into U.S. dollars at the current rate of exchange existing at
year-end, and revenues and expenses are translated at the average monthly
exchange rates. Translation gains or losses are recorded in a separate
component of stockholders' equity and transaction gains and losses are
included in Other Expense, net. The Company recorded transaction (losses)
gains of $(48), $(837) and $6,453 in fiscal 1994, 1995 and 1996, respectively.
F-7
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Cash Equivalents
The Company considers all highly liquid investments with a maturity of three
months or less when purchased to be cash equivalents.
Inventories
Inventories, which consist of material, labor and overhead, are stated at
the lower of cost or market. Cost is determined by the last-in, first-out
("LIFO") method for most U.S. inventories and by the first-in, first-out
("FIFO") method for all remaining inventories.
Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation is calculated
by the straight-line method over the estimated useful lives of depreciable
assets. Accelerated methods are used for tax purposes. Useful lives of
depreciable assets, by class, are as follows:
<TABLE>
<S> <C>
Buildings and improvements..... 5 to 40 years
Machinery and equipment........ 3 to 10 years
</TABLE>
Cost and accumulated depreciation for property retired or disposed of are
removed from the accounts, and any gain or loss on disposal is credited or
charged to earnings. Expenditures for maintenance and repairs are charged to
expense as incurred. In connection with constructing certain property and
equipment, the Company capitalized $725, $1,678 and $2,341 of interest costs
during the fiscal years ended March 31, 1994, 1995 and 1996, respectively.
Depreciation expense was $25,007, $38,417 and $77,397 for the fiscal years
ended March 31, 1994, 1995 and 1996, respectively.
Goodwill
Goodwill is amortized over 40 years on a straight-line basis. Accumulated
amortization as of March 31, 1995 and 1996, was $13,864 and $29,517,
respectively. It is the Company's policy to review goodwill (and other
intangible assets) for possible impairment whenever events or changes in
circumstances indicate that the carrying amount of such assets may not be
recoverable. If such review indicates that the carrying amount of goodwill and
other intangible assets is not recoverable, it is the Company's policy to
reduce the carrying amount of such assets to fair value.
Other Assets
Other assets consist principally of prepaid pension costs related to
overfunded pension plans and noncurrent receivables.
Estimated Warranty Costs
The Company recognizes the estimated cost of warranty obligations in the
period in which the related products are sold. These estimates are based on
historical trends.
Interest Rate Agreements
The differential to be paid or received is accrued as interest rates change
and is recognized over the life of the agreements.
F-8
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Income Taxes
The Company accounts for income taxes under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, which requires the use of a
liability method in accounting for deferred taxes. If it is more likely than
not that some portion or all of a deferred tax asset will not be realized, a
valuation allowance is recognized.
Noncurrent Retirement Obligations
Noncurrent retirement obligations consist principally of reserves for
pension obligations, postretirement health care and other retirement benefits.
Other Noncurrent Liabilities
Other noncurrent liabilities consist principally of reserves for
environmental cleanup and for severance associated with restructurings and
plant closures.
Earnings Per Share
The net income (loss) per common and common equivalent share is based on the
weighted average number of common and common equivalent shares outstanding
during the period. Fully diluted earnings per share are not materially
different from primary earnings per share.
Revenue Recognition
The Company records a sale upon transfer of title to the customer.
Use of Estimates in the Preparation of Financial Statements
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Risks Associated with International Operations and Currency Risk
The Company's international operations are subject to risks normally
associated with foreign operations, including, but not limited to, the
disruption of markets, changes in export or import laws, restrictions on
currency exchanges, and the modification or introduction of other government
policies with potentially adverse effects. As a result of its recent
acquisitions (Note 3), the majority of the Company's sales and expenses are
denominated in currencies other than U.S. dollars and changes in exchange
rates may have a material effect on the Company's reported results of
operations and financial position. In addition, a significant portion of the
Company's indebtedness relating to foreign acquisitions is denominated in U.S.
dollars whereas the related sales are denominated in foreign currencies.
Reclassifications
Certain prior year amounts have been reclassified to conform to the current
year presentation.
Recently Issued Accounting Standards
In March 1995, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 121, "Accounting for the Impairment of Long-Lived Assets" which requires
asset impairment losses to be recognized if the sum
F-9
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
of future expected cash flows (undiscounted and without interest charges) is
less than the carrying amount of the asset. The Company is required to adopt
the provisions of this Statement in fiscal 1997. Management is in the process
of evaluating the impact of adoption; however, they do not believe the
adoption will have a significant impact on results of operations or financial
position.
In October 1995, the FASB issued SFAS No. 123, "Accounting for Stock-Based
Compensation" which defines a fair value based method of accounting for
employee stock compensation plans and encourages, but does not require, the
use of this method of accounting for financial statement purposes. If an
entity continues to measure compensation cost for those plans using the
intrinsic value based method of accounting prescribed by APB Opinion No. 25,
"Accounting for Stock Issued to Employees," pro forma disclosures of net
income and earnings per share are required to show the effect of using the
fair value based method of accounting. The Company is required to adopt this
Statement in fiscal 1997 and has elected to follow the disclosure only method.
2. STOCKHOLDERS' EQUITY:
Effective October 28, 1993, the Company completed an initial public offering
("IPO") of its common stock, which raised $92,000 (before fees and expenses)
for the issuance of 4,600,000 shares of common stock including the underwriter
overallotment option. In connection with the IPO, the Company increased the
authorized shares of common stock from 1,000 to 30,000,000. The shareholders
exchanged all outstanding shares of common stock for shares of common stock of
the Company on a 1.29-to-1 basis. The fiscal 1994 share and per-share amounts
reflect the effects of the IPO. The Company also repurchased the remaining
Preferred Stock at carrying value for $6,462 held by Wilmington Securities
("WSI") and certain members of management.
Effective March 8, 1994, the Company completed a secondary offering of its
common stock. The secondary offering included the issuance of an additional
1,000,000 shares, which raised $34,000 (before fees and expenses).
On December 22, 1994, the Company raised $258,750 (before fees and expenses)
through the issuance of 5,175,000 additional shares of common stock, including
the underwriter overallotment option.
3. ACQUISITIONS:
In May 1995, the Company acquired 99.7% of the outstanding stock of
Compagnie Europeene d'Accumulateurs S.A. ("CEAc") for approximately $425,000
in cash ( $553,500 less assumed debt of $131,900 plus interest from March 31,
1995, of $3,400). Subsequent open market purchases of CEAc stock have
increased the ownership to 100%. The cost of the acquisition has been
allocated on the basis of the estimated fair value of the assets acquired and
the liabilities assumed. Included in the liabilities is $79,000 related to
severance benefits to be paid to certain employees who will be terminated as a
result of the Company's European consolidation and targeted plant closings.
Through March 31, 1996, $7,800 of severance benefits have been paid. Remaining
expenditures are expected to occur over the next several years as the Company
is required to comply with European Union and other applicable regulations. In
accordance with Emerging Issues Task Force Issue No. 87-11 ("EITF 87-11"),
reserves of $12,000 have been established for the expected 12-month operating
losses attributable to certain manufacturing and distribution facilities
acquired that have been identified for closure and sale. As of March 31, 1996,
$10,100 has been incurred and charged against such reserves.
This acquisition was accounted for as a purchase and the results of CEAc's
operations are included in the Company's consolidated statement of operations
effective June 1, 1995. CEAc, which is headquartered in France, is one of the
largest SLI producers and the largest industrial battery manufacturer in
Europe, with operations primarily in France, Italy and Germany.
F-10
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In October 1994, the Company acquired approximately 89.4% of the outstanding
capital stock and approximately 25% of the convertible bonds of Sociedad
Espanola del Acumulador Tudor, S.A. ("Tudor") for 1,145 pesetas per share or
approximately $229,000 (before fees and expenses). In December 1994, one of
the shareholders of Tudor sold its remaining 5% ownership to Tudor at the
tender offering price in accordance with the terms of the purchase agreement.
After completion of this sale and subsequent open market purchases of Tudor
stock, the Company's ownership in Tudor is approximately 95.8%. In addition,
the Company provided a letter of credit which guaranteed payment of the
convertible bonds held by that same shareholder. Tudor, which is headquartered
in Madrid, Spain, is the third-largest lead acid battery producer in Western
Europe.
This acquisition was accounted for as a purchase, and the results of Tudor's
operations are included in the Company's consolidated statement of operations
effective October 3, 1994. The cost of the acquisition has been allocated on
the basis of the estimated fair value of the assets acquired and the
liabilities assumed. Included in the liabilities are reserves established, in
accordance with EITF 87-11, for the actual 12-month operating losses
attributed to certain manufacturing and distribution facilities acquired that
have been identified for closure and sale. Approximately $23,600 of such
reserves were established, all of which have been utilized. In addition, the
Company recorded a liability of $74,000, including $19,000 recorded in fiscal
1996, related to severance benefits to be paid to certain employees who will
be terminated as a result of the restructuring and plant closings. At certain
locations, government approval is required before notice can be given to
employees. Total goodwill resulting from the CEAc and Tudor acquisitions was
$585,000.
On March 30, 1994, the Company acquired all of the issued and outstanding
capital stock of B.I.G. Batteries Group Limited ("BIG") for approximately
$2,075 in cash and $32,725 in British pound-denominated Loan Notes. The
acquisition was accounted for as a purchase, and the results of BIG's
operations are included in the Company's consolidated statement of operations
effective April 1, 1994. The cost of the acquisition has been allocated on the
basis of the estimated fair value of the assets acquired and the liabilities
assumed. This acquisition resulted in goodwill of approximately $30,084. BIG
is an SLI battery manufacturer based in Wales.
In September 1994, the Company and PT Sapta Panji Manggala ("PT Sapta"), an
Indonesian company, signed an agreement whereby the Company contributed its
interest in BIG and PT Sapta contributed its interest in Gemala Holdings
Limited ("Gemala") into a newly formed entity, Exide Batteries Limited. In
exchange for PT Sapta's interest in Gemala, the Company gave PT Sapta an 18.5%
equity interest in Exide Batteries Limited and the right to certain benefits
to be realized from Gemala's tax loss carryforwards. PT Sapta also received
the right to require Exide to purchase its 18.5% interest at any time after
five years from the closing date of the transaction for a defined multiple of
earnings.
In January 1996, the Company acquired the remaining 25% minority interest in
a subsidiary of CEAc, in exchange for 350,000 shares of the Company's common
stock valued at $17,238.
On August 31, 1995, the Company acquired Schuylkill Holdings, Inc. ("SHI")
from Heller Financial, Inc. ("Heller") through a merger, and purchased all of
SHI's stock options and subordinated notes from various holders and the
secured debt of SHI's operating subsidiary, Schuylkill Metals Corporation, the
owner of two lead smelters in Louisiana and Missouri. The Company paid $2,000
in cash for SHI's stock, options and notes; for the secured debt, it issued
593,210 shares of its common stock valued at $31,000, paid $3,700 in cash and
issued a contingent note, the value of which will be based on market lead
prices. Under the terms of the purchase agreement, the Company is required to
make an additional payment to Heller in fiscal 2000 if lead prices for the
four-and-one-half-year period subsequent to the acquisition date reach defined
levels. Based on the Company's current projection of lead prices for such
period, in the fourth quarter of fiscal 1996, the Company increased goodwill
by $10,000. The Company and Heller also entered into an agreement to share
certain tax liabilities of SHI. The purchase price was allocated primarily to
receivables, inventories and fixed assets and resulted in $22,000 of goodwill.
F-11
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
On May 3, 1994, the Company acquired General Electric Credit Corporation's
secured debt position in Evanite Fiber Corporation ("Evanite"), a debtor-in-
possession, for approximately $33,700. Evanite is a manufacturer, and the
Company's primary supplier, of battery separators. On February 21, 1995, Exide
acquired all of the assets and assumed certain liabilities of Evanite in
exchange for its secured debt position. The purchase price was allocated
primarily to receivables, inventories and fixed assets and resulted in no
goodwill. In June 1996, the Company sold certain assets related to a division
of Evanite for $13,000 cash.
Effective October 15, 1993, the Company purchased the remaining 50% equity
interest in Battronics, Inc. ("Battronics") for approximately $3,000 in cash.
Battronics is an automotive battery manufacturer/distributor in Canada.
Effective October 1993, Battronics' financial results are reported on a
consolidated basis rather than the equity basis that was previously followed.
The following summarized unaudited pro forma consolidated results of
operations for the fiscal years ended March 31, 1995 and 1996, illustrate the
estimated effects of the acquisitions, as if the transactions were consummated
as of the beginning of each fiscal year presented:
<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Net sales.......................................... $2,292,729 $2,474,640
---------- ----------
Loss before extraordinary item..................... $ (5,484) $ (5,271)
---------- ----------
Net loss........................................... $ (9,081) $ (14,871)
---------- ----------
Pro forma earnings per common and common equivalent
share:
Loss before extraordinary item................... $ (0.27) $ (0.26)
---------- ----------
Net loss......................................... $ (0.44) $ (0.72)
---------- ----------
</TABLE>
Pro forma adjustments include only the effects of events directly
attributable to a transaction that are factually supportable and expected to
have a continuing impact. Pro forma adjustments reflecting anticipated
"efficiencies" in operations resulting from a transaction are not permitted
and, therefore, are not reflected herein. The above unaudited pro forma
financial information is not necessarily indicative of the results that would
actually have been obtained if the transactions had been effected on the dates
indicated or that may be obtained in the future.
4. INVENTORIES:
Inventories as of March 31, 1995 and 1996, are as follows:
<TABLE>
<CAPTION>
1995 1996
-------- --------
<S> <C> <C>
Raw materials.......................................... $ 98,872 $138,809
Work-in-process........................................ 43,840 94,340
Finished goods......................................... 333,769 362,012
-------- --------
$476,481 $595,161
======== ========
</TABLE>
At March 31, 1995 and 1996, inventories valued by the LIFO method were
approximately 42% and 29% of consolidated inventories, respectively. If all
inventories had been determined using the first-in, first-out method, such
inventories would have been $459,414 and $578,094 at March 31, 1995 and 1996,
respectively. The carrying amount of inventories on a LIFO basis exceeds
replacement cost. LIFO inventories reflect the fair value of inventories as of
August 31, 1989, when all of the outstanding common shares of the Company were
acquired
F-12
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
in a leveraged buyout, as inventories subsequently produced cost less to
manufacture. The Company believes that no write-down of the carrying amount of
inventories to replacement cost is necessary, as no loss will be realized upon
their final sale.
In connection with the purchase of lead for anticipated manufacturing
requirements, the Company enters into commodity forward and futures contracts.
These contracts are used as a hedging strategy to help protect against
volatility in lead prices. During fiscal 1996, lead prices increased
significantly. The Company remains at risk for possible changes in the market
value of the commodity contracts; however, such risk should be mitigated by
price changes in lead. The contracts are accounted for as hedges and,
accordingly, gains or losses are deferred and recognized in inventory upon
execution of the contract. At March 31, 1996, the Company had outstanding
contracts hedging lead purchases through December 1997 at fixed prices of
approximately $88,697 for 127,400 metric tons.
5. SHORT-TERM BORROWINGS:
At March 31, 1995 and 1996, short-term borrowings consisted of various
operating lines of credit and working capital facilities maintained by certain
of the Company's foreign subsidiaries. These borrowings are secured by
receivables, inventories or property. These facilities, which are typically for
one-year renewable terms, generally bear interest at the current market rates
plus up to 1%. As of March 31, 1995 and 1996, the weighted average interest
rate on these borrowings was 8.9% and 10.9%, respectively.
6. LONG-TERM DEBT:
Following is a summary of the Company's long-term debt at March 31, 1995 and
1996:
<TABLE>
<CAPTION>
1995 1996
-------- ----------
<S> <C> <C>
U.S. Credit Agreement borrowings primarily at LIBOR
plus 2.5% at March 31, 1995 (8.8%).................... $194,500 $ --
10% Senior Notes, due April 15, 2005................... -- 300,000
10.75% Senior Notes, due December 15, 2002............. 150,000 150,000
12.25% Senior Subordinated Deferred Coupon Debentures,
due December 15, 2004................................. 79,772 89,856
2.90% Convertible Senior Subordinated Notes, due
December 15, 2005..................................... -- 290,124
European Facilities Agreement, borrowings primarily at
LIBOR plus 1.5% (ranging from 5.6% to 10.9% at March
31, 1996)............................................. -- 436,940
European Term Loans at rates ranging from 5.0% to 11.9%
at
March 31, 1995 and 7.6% to 10.1% at March 31, 1996.... 63,286 12,021
Spanish Convertible Debentures at average one-year
MIBOR revisable every six months (9.6% at March 31,
1995)................................................. 23,699 --
Guaranteed Unsecured Loan Notes at LIBOR less 5/8% at
March 31, 1995 (6.1%), due on demand.................. 35,868 --
Other, primarily capital lease obligations at interest
rates ranging from 3.7% to 11.0% due in installments
through 2015, and other debt.......................... 23,000 52,774
-------- ----------
570,125 1,331,715
Less--Current maturities............................... 51,731 30,477
-------- ----------
$518,394 $1,301,238
======== ==========
</TABLE>
F-13
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
In December 1995, the Company issued 2.9% Convertible Senior Subordinated
Notes due December 15, 2005, with a face amount of $397,900 discounted to
$287,797, after the underwriters' exercise of their overallotment option.
These notes have a coupon rate of 2.9% with a yield to maturity of 6.75%. The
notes are convertible into the Company's common stock at a conversion rate of
12.5473 shares per $1,000 principal amount at maturity, subject to adjustments
in certain events. The Company used the funds to repay indebtedness under the
U.S. Credit Agreement.
On November 30, 1995, the Company entered into a Pan-European,
multicurrency, multiborrower credit facility ("European Facilities
Agreement"). The facility contains a Tranche A term loan in the amount of
236,000 French francs (U.S. $46,905), a Tranche B term loan in the amount of
930,000 French francs (U.S. $184,839), and a revolving facility of 1,403,000
French francs (U.S. $278,849). The Tranche A term loan matures on November 30,
2000, and the Tranche B term loan matures on November 30, 2002. Both term
loans require semiannual principal payments throughout their terms. The
revolving facility expires on September 30, 2002. Substantially all of the
Company's European bank debt, including indebtedness under the former European
Facilities Agreement that was utilized to finance a portion of the CEAc
acquisition, was refinanced with this European Facilities Agreement.
Borrowings under the European Facilities Agreement bear interest at local
market rates (comparable to LIBOR) plus a margin of 1.5% per annum, reducing
in 0.25% increments beginning after one year to 1.0% so long as the European
borrowing group, as defined, meets and maintains certain interest coverage and
leverage tests.
Borrowings under the European Facilities Agreement are supported by
guarantees of most of the Company's European subsidiaries and secured by
pledges of the stock of the Company's Euro Exide, CEAc and Tudor subsidiaries.
The European Facilities Agreement contains a number of financial and other
covenants customary for such agreements including restrictions on new
indebtedness, liens, minimum net worth, leverage rates, acquisitions and
capital expenditures.
In April 1995, the Company issued $300,000 in aggregate principal amount of
10% Senior Notes, the net proceeds of which were used, along with borrowings
under the U.S. Credit Agreement, to finance the CEAc acquisition. The 10%
Senior Notes are redeemable at the option of the Company, in whole or in part,
at any time on or after April 15, 2000, initially at 105% of the principal
amount, plus accrued interest, declining to 100% of the principal amount, plus
accrued interest on or after April 15, 2002.
Effective August 30, 1994, the Company entered into a new U.S. Credit
Agreement that initially provided a borrowing capacity of $550,000 with three
components: Term Loan A ($100,000), having a five-year term; Term Loan B
($100,000), having a seven-year term; and a Revolving Credit Facility
($350,000, subsequently reduced to $185,000 as of March 31, 1996), expiring
September 30, 1999. Both Term Loan A and Term Loan B were repaid during fiscal
1996. The Revolving Credit Facility provides for the Company's working capital
and letter of credit needs. As of March 31, 1996, the Company had $11,751 of
letters of credit outstanding and $173,249 of additional availability under
the Revolving Credit Facility. Subsequent to March 31, 1996, the Revolving
Credit Facility was reduced to $165,000 and borrowings are limited by the
amount of eligible domestic receivables and inventory. The U.S. Credit
Agreement contains a number of financial and other covenants that, among other
things, place restrictions on dividends, new indebtedness, liens, acquisitions
and capital expenditures. Substantially all of the assets, less receivables
sold, of the Company's U.S. operations are pledged as collateral for the U.S.
Credit Agreement.
Initial borrowings under the new U.S. Credit Agreement were used in the
paydown and early termination of the former Credit Agreement which resulted in
an extraordinary loss of $3,597, net of $2,320 income tax benefit. The new
U.S. Credit Agreement also provided funding for the acquisition of Tudor.
F-14
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Debt issuance costs of $20,228 were incurred in connection with the new U.S.
Credit Agreement. Amortization of deferred financing costs related to the
current and previous Credit Agreements amounted to $1,418 in fiscal 1994,
$2,249 in fiscal 1995 and $3,002 in fiscal 1996. In fiscal 1995, the Company
expensed $2,000 of bridge loan commitment fees.
In connection with the issuance of the 12.25% Senior Subordinated
Debentures, 10.75% Senior Notes, 10% Senior Notes and 2.9% Convertible Senior
Subordinated Notes, the Company incurred financing costs of $27,813.
Amortization related to this senior debt during fiscal 1994, 1995 and 1996 was
$649, $784 and $2,215, respectively.
Tudor and certain of its subsidiaries had outstanding term loan arrangements
with financial institutions secured primarily by property. The Spanish
convertible debentures were issued by Tudor in December 1993 and were
refinanced in connection with the European Facilities Agreement in November
1995.
In connection with the acquisition of BIG, on March 30, 1994, the Company
issued $32,725 of British pound-denominated Guaranteed Unsecured Loan Notes
("Loan Notes") to the previous owners of the acquired entity ($35,868 as of
March 31, 1995). The Loan Notes were secured by a Company-purchased, British
pound-denominated certificate of deposit (cash equivalent) of equal amount. On
April 13, 1995, the certificate of deposit was redeemed and the proceeds were
used to fully redeem the Loan Notes.
In fiscal 1996, deferred financing costs were written off due to early
repayment of the former European Facilities Agreement, European Term Loans,
Spanish Convertible Debentures and Term Loan A and Term Loan B under the U. S.
Credit Agreement, as well as permanent reductions in the Revolving Credit
Facility under the U.S. Credit Agreement, resulting in an extraordinary loss
of $9,600 net of $5,958 income tax benefit.
The Company enters into interest rate hedge agreements to manage interest
costs and exposure to changing interest rates. Effective December 1994, the
Company entered into two interest rate collar agreements which reduce the
impact of changes in interest rates on a portion of the Company's floating
rate debt. These agreements effectively limit the LIBOR base interest rate on
$100,000 of borrowings under the U.S. Credit and European Facilities
Agreements to no more than 8% and no less than 5.5% graduating up to 7.5%
through December 30, 1997. Additionally, effective May 17, 1995, the Company
entered into an interest rate swap agreement which fixed the LIBOR base
interest rate on a notional amount of $50,000 at 6.21% for two years. During
fiscal 1994, 1995 and 1996, the Company recognized $2,433, $24 and $580,
respectively, of additional interest expense related to these swap and collar
agreements.
Annual principal payments required under long-term debt obligations are as
follows:
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
----------- ---------
<S> <C>
1997.............................. $ 30,477
1998.............................. 42,812
1999.............................. 42,793
2000.............................. 41,072
2001.............................. 40,826
Thereafter........................ 1,133,735
</TABLE>
7. EMPLOYEE BENEFIT PLANS:
North American Pension Plans
The Company has noncontributory defined benefit pension plans covering
substantially all hourly employees in North America. Plans covering hourly
employees provide pension benefits of stated amounts for each year of
F-15
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
credited service. Substantially all salaried employees in North America are
covered under a defined contribution plan, which requires the Company to
contribute 4% of eligible employees' salaries on an annual basis.
The components of net periodic pension cost for the defined benefit plans
and pension expense for the defined contribution plans for the fiscal years
ended March 31, 1994, 1995 and 1996, are as follows:
<TABLE>
<CAPTION>
1994 1995 1996
------- ------- --------
<S> <C> <C> <C>
Defined Benefit Plans:
Service cost of current
period................... $ 616 $ 1,217 $ 1,378
Interest cost on projected
benefit obligation....... 3,834 4,609 5,474
Actual return on plan as-
sets..................... (5,809) 3,173 (11,721)
Net amortization and de-
ferrals.................. 2,058 (7,909) 7,306
------- ------- --------
Net defined benefit pen-
sion expense........... 699 1,090 2,437
Defined Contribution Plan... 2,039 2,003 2,167
------- ------- --------
Total pension expense... $ 2,738 $ 3,093 $ 4,604
</TABLE>
It is the Company's policy to make contributions sufficient to meet the
minimum contributions required by law and regulation.
The following table sets forth the funded status and the amounts recognized
in the consolidated balance sheets for the Company's defined benefit pension
plans:
<TABLE>
<CAPTION>
MARCH 31
------------------
1995 1996
-------- --------
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation............................. $ 60,597 $ 70,309
-------- --------
Accumulated benefit obligation........................ $ 62,838 $ 73,300
-------- --------
Actuarial present value of:
Projected benefit obligation.......................... $ 64,497 $ 74,617
Plan assets at fair value............................. 48,833 60,414
-------- --------
Plan assets less than projected benefit obligation.... (15,664) (14,203)
Prior service cost.................................... 1,624 1,614
Unrecognized net loss................................. 9,124 8,826
Additional minimum liability recognized............... (9,234) (10,087)
-------- --------
Accrued pension cost recognized in the consolidated
balance sheet........................................ $(14,150) $(13,850)
======== ========
</TABLE>
The weighted average interest rates used in determining the projected
benefit obligation were 8.5% and 7.75%, respectively, as of March 31, 1995 and
1996. The rate of increase in future compensation levels and the expected
long-term rate of return on plan assets were 6.0% and 10.5%, respectively, as
of March 31, 1995 and 1996. The pension plan assets are invested primarily in
equity and fixed income securities.
SFAS No. 87 requires that underfunded pension plans reflect an additional
balance sheet liability if the excess of the accumulated benefit obligation
over the plan assets exceeds the accrued pension liability. However, SFAS No.
87 also permits the Company to establish an intangible asset, not to exceed
the unrecognized prior service cost, as an offsetting entry. Any remaining
amount of additional liability that is not offset by the intangible asset must
be offset through a charge against equity. Accordingly, the Company increased
the
F-16
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
additional minimum liability $6,567 and $853, the intangible asset $55 and
$193, and the charge against equity $6,512 and $660 (tax-effected to $4,197
and $417) in fiscal 1995 and 1996, respectively.
European Pension Plans
European subsidiaries of the Company sponsor several defined benefit and
defined contribution plans that cover substantially all employees who are not
covered by statutory plans. For defined benefit plans, charges to expense are
based upon costs computed by independent actuaries. In most cases, the defined
benefit plans are not funded--book reserves are maintained. Benefit formulas
are similar to those used by the U.S. plans.
Total pension expense related to the European plans was $4,111 and $4,953 in
fiscal 1995 and 1996, respectively. The accrued pension liability, reflected
in Noncurrent Retirement Obligations as of March 31, 1995 and 1996, relates to
the defined benefit plans which are not funded, approximate the projected
benefit obligation. The projected benefit obligation of such plans is $59,600
and $72,700, as of March 31, 1995 and 1996, of which $56,300 and $67,600,
respectively, is vested. The discount rates used in determining the actuarial
present value of the projected benefit obligation ranged from 6.5% to 9.5% and
the assumed increase in future compensation levels ranged from 3.5% to 5% in
fiscal 1995 and 1996.
With respect to funded plans, as of March 31, 1996, the Company recognized
$10,400 of prepaid pension costs reflected in Other Assets representing the
overfunded status of a defined benefit plan. The projected benefit obligation
of the plan as of March 31, 1996, is $40,700, of which $26,000 is vested, and
the plan assets at fair value are $51,100. The discount rate used in
determining the projected benefit obligation was 7.75%, the rate of increase
in future compensation levels was 6.5% and the expected long-term rate of
return on plan assets was 9.5%.
8. POSTRETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS:
The Company provides certain health care and life insurance benefits for a
limited number of retired employees in the United States. In addition, a
limited number of the Company's active U.S. employees may become eligible for
those benefits if they reach normal retirement age while working for the
Company. Prior to fiscal 1994, the Company accounted for these costs on a pay-
as-you-go basis. In the first quarter of fiscal 1994, the Company adopted SFAS
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions." The Company elected to recognize the cumulative effect of this
accounting change by expensing $12,711, with no income tax effect because of
the uncertainty of deductibility at that time. This amount represented the
accumulated postretirement benefit obligation for current and future retirees
at the beginning of fiscal year 1994.
The following table sets forth the plan's postretirement benefit liability
as of March 31:
<TABLE>
<CAPTION>
1995 1996
------- -------
<S> <C> <C>
Accumulated postretirement benefit obligation ("APBO"):
Retirees, beneficiaries and dependents................... $10,370 $12,399
Fully eligible actives................................... 400 563
Not fully eligible actives............................... 450 1,855
------- -------
Total.................................................. 11,220 14,817
Unrecognized gain (loss)................................... 1,138 (2,242)
------- -------
Accrued postretirement benefit cost recognized in the
consolidated balance sheet................................ $12,358 $12,575
======= =======
</TABLE>
F-17
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Company charges postretirement benefit costs as accrued, based on
actuarial calculations. The net periodic postretirement benefit cost for
fiscal 1994, 1995 and 1996 included the following components:
<TABLE>
<CAPTION>
1994 1995 1996
------ ---- ------
<S> <C> <C> <C>
Service cost............................................. $ 135 $ 99 $ 95
Interest cost............................................ 1,019 856 1,032
------ ---- ------
Net periodic postretirement benefit cost................. $1,154 $955 $1,127
</TABLE>
The significant assumptions used to calculate the net periodic
postretirement benefit cost and the accumulated postretirement benefit
obligation as of March 31, 1995 and 1996, were a discount rate of 8.0% and
7.75%, respectively, and medical costs that are assumed to increase at a rate
of 9% per year during fiscal 1996 grading down to 5% per year by 2003. The
effect of a one-percentage-point increase in the assumed health care cost
trend rate would increase the accumulated postretirement benefit obligation as
of March 31, 1996, by approximately $1,247, and the aggregate of the service
and interest cost components of net periodic postretirement benefit cost by
approximately $115.
9. STOCK GRANTS AND OPTIONS:
On April 28, 1993, the Board of Directors adopted an Incentive Compensation
Plan, under which certain members of the Company's management were granted
811,662 shares of the Company's common stock. These shares vest over a five-
year period and have certain restrictions related to sale, transferability,
and employment with the Company. Upon complete vesting, participants must pay
$2.25 per share, the estimated fair value at the grant date, prior to
transferring such shares.
In October 1993, the Board of Directors adopted the Long Term Incentive Plan
("Incentive Stock Plan"), which may grant awards to key employees in the form
of incentive stock options, nonqualified stock options, restricted shares of
common stock or units valued on the basis of long-term performance of the
Company ("Performance Units"). Options may be accompanied by stock
appreciation rights ("Rights"). The maximum aggregate number of shares of
common stock with respect to which options, restricted shares, Performance
Units and Rights granted without accompanying options that may be granted
pursuant to the Incentive Stock Plan is 700,000 shares.
During fiscal 1995, a total of 40,000 restricted shares of the Company's
common stock were granted to certain employees. The market value of the shares
awarded on the date of grant ( $1,935) has been recorded as unearned
compensation and is shown as a separate component of stockholders' equity.
Unearned compensation is being amortized to expense over the five -year
vesting period and amounted to $129 and $387 in fiscal 1995 and 1996,
respectively. In fiscal 1996, grants for 20,000 shares of the restricted stock
were canceled.
Stock grant and option transactions during fiscal 1994, 1995 and 1996 were
as follows:
<TABLE>
<CAPTION>
1994 1995 1996
-------- -------- -------
<S> <C> <C> <C>
Incentive Compensation Plan:
Grants outstanding at April 1............ -- 811,662 788,472
Granted.................................. 811,662 -- --
Canceled................................. -- (23,190) (23,972)
Exercised................................ -- -- (10,822)
Grants outstanding at March 31........... 811,662 788,472 753,678
Exercise price........................... $ 2.25 $ 2.25 $ 2.25
</TABLE>
F-18
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
<TABLE>
<CAPTION>
1994 1995 1996
---- ------ ---------
<S> <C> <C> <C>
Stock Grants:
Grants outstanding at
April 1................ -- -- 40,000
Granted................. -- 40,000 --
Canceled................ -- -- (20,000)
Exercised............... -- -- --
Grants outstanding at
March 31............... -- 40,000 20,000
Grant price............. -- $48.38 $ 48.38
Incentive Stock Plan:
Options outstanding at
April 1................ -- -- --
Granted................. -- -- 102,000
Canceled................ -- -- --
Exercised............... -- -- --
Options outstanding at
March 31............... -- -- 102,000
Exercise price range.... -- -- $29.50 to
$50.00
</TABLE>
10. INCOME TAXES:
The provision for income taxes includes federal, state and foreign taxes
currently payable and those deferred because of temporary differences between
the financial statement and tax bases of assets and liabilities. The
components of the provision for income taxes for the fiscal years ended March
31, 1994, 1995 and 1996, are as follows:
<TABLE>
<CAPTION>
1994 1995 1996
------- ------- --------
<S> <C> <C> <C>
Current:
Federal......................................... $ 1,286 $ 2,940 $ --
State........................................... 1,366 218 700
Foreign......................................... 876 2,865 5,300
------- ------- --------
3,528 6,023 6,000
------- ------- --------
Deferred:
Federal......................................... 6,866 (4,253) (23,838)
State........................................... 400 (911) (2,347)
Foreign......................................... -- 4,301 26,485
------- ------- --------
7,266 (863) 300
------- ------- --------
Total provision............................... $10,794 $ 5,160 $ 6,300
======= ======= ========
</TABLE>
Major differences between the federal statutory rate and the effective tax
rate are as follows:
<TABLE>
<CAPTION>
1994 1995 1996
---- ---- -----
<S> <C> <C> <C>
Federal statutory rate.................................... 35.0% 35.0% 35.0%
State taxes, net of federal benefit....................... 4.1 (4.2) (22.6)
Nondeductible goodwill.................................... 3.5 15.3 87.1
Difference in rates on foreign subsidiaries............... -- 0.8 11.5
Other, net................................................ (3.8) 1.2 (17.4)
---- ---- -----
Effective tax rate...................................... 38.8% 48.1% 93.6%
==== ==== =====
</TABLE>
F-19
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The following is a summary of the significant components of the Company's
deferred tax assets and liabilities as of March 31, 1995 and 1996:
<TABLE>
<CAPTION>
DEFERRED TAX
ASSETS (LIABILITIES)
---------------------
1995 1996
---------- ----------
<S> <C> <C>
Deferred Tax Assets:
Operating loss and tax credit carryforwards......... $ 44,672 $ 133,870
Compensation reserves............................... 22,218 37,440
Environmental reserves.............................. 12,888 16,539
Interest............................................ 6,660 10,584
Retirement benefits................................. 6,494 14,553
Self-insurance...................................... 3,681 4,536
Warranty............................................ 2,951 3,310
Other............................................... 15,402 18,607
Valuation allowance................................. (30,528) (129,477)
--------- ----------
84,438 109,962
Deferred Tax Liabilities:
Depreciation/property basis......................... (25,285) (13,824)
Inventory basis difference.......................... (6,741) (5,879)
Other............................................... -- (3,423)
--------- ----------
(32,026) (23,126)
--------- ----------
Net deferred tax asset................................ $ 52,412 $ 86,836
========= ==========
</TABLE>
As of March 31, 1996, the Company has net operating loss carryforwards for
U.S. income tax purposes of approximately $86,300, which expire in years 2006
through 2012. Certain of these carryforwards have preacquisition tax
attributes, which will reduce goodwill upon realization. For financial
reporting purposes, a valuation allowance has been recognized to offset the
deferred tax assets related to these preacquisition tax attributes and certain
other deferred tax assets for which it is more likely than not that the
benefits will not be realized.
As of March 31, 1996, certain of the Company's European subsidiaries have
net operating loss and tax credit carryforwards for income tax purposes of
approximately $262,097 which expire in years 1997 through 2003. Most of these
carryforwards are preacquisition tax attributes, which will reduce goodwill
upon realization. For financial reporting purposes, a valuation allowance has
been recognized to offset the deferred tax assets related to these
preacquisition tax attributes and certain nondeductible reserves for which it
is more likely than not that related tax benefits will not be realized. During
fiscal 1996, non-U.S. pre-tax income of the Company was $71,900. Substantially
all of the increase in the valuation allowance relates to deferred tax assets
associated with the European acquisitions.
The Company's net deferred tax assets include certain amounts of net
operating loss carryforwards principally in the U.S., which management
believes are realizable through a combination of anticipated tax planning
strategies and forecasted future taxable income. The Company intends to
implement the necessary tax planning strategies to realize the benefit of such
deferred tax assets. However, failure to achieve forecasted future taxable
income might affect the ultimate realization of recorded net deferred tax
assets.
As of March 31, 1996, the Company has not provided for withholding or U.S.
federal income taxes on undistributed earnings of foreign subsidiaries since
such earnings are expected to be reinvested indefinitely.
F-20
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
11. RECEIVABLES SALE AGREEMENT:
The Company entered into a Receivables Sale Agreement with certain banks
(the "Purchasers"), and under this agreement, the Purchasers have committed to
purchase, with limited recourse, all right, title and interest in selected
accounts receivable of the Company, up to a maximum net investment of $75,000
(increased from $40,000 effective December 20, 1995 after being reduced from
$50,000 effective February 17, 1994). As of March 31, 1995 and 1996, gross
uncollected receivables sold under the Receivables Sale Agreement were $43,880
and $112,109, respectively. Losses on receivables sold under this agreement
for the fiscal years ended March 31, 1994, 1995 and 1996, were $1,593, $1,616
and $2,554, respectively, and are included in Other Expense, net in the
Consolidated Statement of Operations.
12. RELATED-PARTY TRANSACTIONS:
The Company is party to an agreement with Yuasa-Exide, Inc., a 13.5%-owned
affiliate, whereby the Company provides facilities and certain administrative
support to Yuasa-Exide, Inc. During fiscal 1994, 1995 and 1996, the Company
received payments under this agreement of $694, $174 and $124, respectively.
In connection with the secondary offering in March 1994, the Company paid
the offering expenses with respect to shares sold by Messrs. Hawkins, Pearson
and Rankin and WSI (except their underwriters' discount) as required by an
agreement pursuant to which WSI and certain current and past members of
management had certain rights requiring the Company to register their shares
for sale.
13. ENVIRONMENTAL MATTERS:
The Company, particularly as a result of its manufacturing and secondary
lead smelting operations, is subject to numerous environmental laws and
regulations and is exposed to liabilities and compliance costs arising from
its past and current handling, processing, recycling, storing and disposing of
hazardous substances and hazardous wastes. The Company's operations are also
subject to occupational safety and health laws and regulations, particularly
relating to the monitoring of employee health in North America and, to a
lesser extent, in Europe. Except as disclosed herein, the Company believes
that it is in substantial compliance with all material environmental, health
and safety requirements.
North America
The Company has been advised by the U.S. Environmental Protection Agency
("EPA") that it is a "Potentially Responsible Party" ("PRP") under the
Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") or similar state laws at 53 federally defined Superfund or state
equivalent sites. At 23 of these sites, the Company has either paid or is in
the process of paying its share of liability. In most instances, the Company's
obligations are not expected to be significant because its portion of any
potential liability appears to be minor to insignificant in relation to the
total liability of all PRPs that have been identified and which are viable.
The Company's share of the anticipated remediation costs associated with all
of the Superfund sites where it has been named a PRP, based on the Company's
estimated volumetric contribution to each site, is included in the
environmental remediation reserves discussed below. Because the Company's
liability under such statutes may, as a technical matter, be imposed on a
joint and several basis, the Company's liability may not necessarily be based
on volumetric allocations and could be greater than the Company's estimates.
Management believes, however, that its PRP status at these Superfund sites
will not have a material adverse effect on the Company's business or financial
condition because, based on the Company's experience, it is reasonable to
expect that liability will be roughly proportionate to its volumetric
contribution of waste to the sites.
The Company is the primary PRP at three Superfund sites. Other than these
three sites, the Company's volumetric allocation exceeds 5% at only seven such
Superfund sites (with respect to two of which the
F-21
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
Company's share of liability has been paid) and its volumetric allocation at
the five sites where the Company's liability has not yet been fully paid
averages 14.5%.
The Company is the primary PRP at the Brown's Battery site located in
Pennsylvania. The site was operated by third-party owners in the 1960s and
early 1970s. The EPA issued a final Record of Decision ("ROD") adopting an
innovative technology developed by the Company which, though not yet used for
lead remediation on a production volume basis, is lower in cost than other
prevailing options and offers to the Company and EPA additional significant
potential enhancements for remediation of other similar sites. The incremental
cost of remediation for this approach is estimated to be approximately
$16,000, a substantial portion of the total remedial costs constitute capital
improvements. If the innovative technology is not commercially feasible, the
alternative remediation plan, which entails relocation of the contaminated
soil, would be employed at a cost (estimated by EPA) of approximately $30,000.
The Company has tested and is actively developing the innovative technology.
The Company has established its reserves based upon the innovative technology
remediation plan, net of amounts to be capitalized and not considering
potential insurance recovery.
The Company is also the primary PRP at the Wortham Lead Salvage State
Superfund Site located in Texas, another site that was owned and operated by
third parties. Remediation of the Wortham Site is expected to have a cost of
$770, which has been reserved.
The Company is also the primary PRP at the Jones Tire & Battery Superfund
Site in Alabama. Like other sites listed above, the Company never owned or
operated this site. Accordingly, the Company's volumetric share of the waste
found at this site was fairly small (less than 2%). Because of the large
number of nonpaying PRPs, however, the Company has paid the largest single
share of the expenses to date. The paying PRPs have collectively paid nearly
$4,000 at this site, of which the Company has paid approximately $1,430. The
EPA issued a letter in August 1995 stating no further remedial or
investigative action is needed at this site; however, the EPA has referred the
site to the Alabama Department of Environmental Management for final closure.
The Company has commenced litigation against those PRPs who have declined to
fund their share of the cleanup and currently believes that much of the
additional funds that it has been forced to expend on this matter may be
recovered through that litigation.
The Company is also involved in the assessment and remediation of various
other properties, including certain Company-owned or -operated facilities.
Such assessment and remedial work is being conducted pursuant to a number of
state and federal environmental laws and with varying degrees of involvement
by state and federal authorities. Where reasonably estimable, the costs of
such projects have been accrued in reserves established by the Company, as
discussed further below. In addition, several environmental matters concerning
the Company are pending in federal and state courts or with regulatory
agencies.
In fiscal 1993, the Company agreed with one of the former holders of its
preferred stock to provide certain environmental management services and to
indemnify such holder for certain potential environmental liabilities. The
Company established an additional environmental reserve of $6,000 with respect
to this liability, which the Company believes will be adequate.
While the ultimate outcome of the foregoing environmental matters is
uncertain, after consultation with legal counsel, management does not believe
the resolution of these matters will have a material adverse effect on the
Company's business, cash flows, financial condition or results of operations.
The Company's policy is to accrue for environmental costs when it is probable
that a liability has been incurred and the amount of such liability is
reasonably estimable. While the Company believes its current estimates of
future remediation costs are reasonable, future findings or changes in
estimates could have a material effect on the recorded reserves.
F-22
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Company has established reserves for on-site and off-site environmental
remediation costs and believes that such reserves are adequate. As of March
31, 1996, the amount of such reserves on the Company's balance sheet was
$28,854. Of this total amount, $22,448 was included in "Other Noncurrent
Liabilities." Because environmental liabilities are not accrued until a
liability is determined to be probable and reasonably estimable, not all
potential future environmental liabilities have been included in the Company's
environmental reserves and, therefore, additional earnings charges are
possible.
In 1993, the CNA Insurance Companies ("CNA") filed a declaratory judgment
lawsuit in Delaware state court. CNA seeks to have the court determine that
CNA owes no duty to the Company for costs of defending environmental actions
and for response costs, property damage and bodily injury claims stemming from
environmental conditions. The Company seeks to have the court determine that
CNA and other insurance companies owe the Company a duty to defend and to
reimburse the Company for certain property damage and bodily injury arising
from environmental conditions that the Company allegedly caused, suffered or
allowed. The Company intends to vigorously defend the suit and vigorously
pursue recovery under its insurance policies. The Company is negotiating with
several of the carriers to affect settlement of this matter. Based upon the
current status of these negotiations, during the fourth quarter of fiscal
1996, after consultation with legal counsel, the Company recorded a $7,000
receivable and a corresponding reduction of operating expenses. Legal counsel
and management believe such recovery is probable and expect the ultimate
recovery may be higher.
Europe
The Company is subject to numerous environmental, health and safety
requirements and is exposed to differing degrees of liabilities and compliance
costs arising from its past and current manufacturing and recycling activities
in various European countries. The laws and regulations applicable to such
activities differ from country to country and also substantially differ from
U.S. laws and regulations. Except as disclosed herein, the Company believes,
based upon reports from its foreign subsidiaries and/or independent qualified
opinions, that it is in substantial compliance with all material
environmental, health and safety requirements in each country, except as noted
below.
Certain facilities in France, Germany and Spain are not in compliance with
certain limits contained in air and wastewater treatment discharge permits. In
every case, the Company is working cooperatively with appropriate authorities
to come into compliance. It is possible that the Company could be subject to
fines or penalties with regard to these violations, although management
believes any such fines/penalties will not be material. The cost to upgrade
the facilities to attain compliance is not expected to be material. The
subject violations are not expected to interfere with continued operations at
the subject facilities.
The Company expects that its European operations will continue to incur
capital and operating expenses in order to maintain compliance with evolving
environmental, health and safety requirements or more stringent enforcement of
existing requirements in each country.
As a result of the Company's plans to consolidate its European manufacturing
operations, it is probable that certain environmental costs will be incurred.
An estimate of the probable liability has been included in the Tudor and CEAc
purchase price allocations.
14. FAIR VALUE OF FINANCIAL INSTRUMENTS:
The estimated fair value of financial instruments has been determined by the
Company using available market information and appropriate methodologies;
however, considerable judgment is required in interpreting market data to
develop the estimates for fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts that the Company could
realize in a current market exchange. Certain of
F-23
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
these financial instruments are with major financial institutions and expose
the Company to market and credit risks and may at times be concentrated with
certain counterparties or groups of counterparties. The creditworthiness of
counterparties is continually reviewed, and full performance is anticipated.
The methods and assumptions used to estimate the fair value of each class of
financial instruments are set forth below:
. Cash and cash equivalents, accounts receivable and accounts payable--the
carrying amounts of these items are a reasonable estimate of their fair
values at March 31, 1996.
. Investments in affiliates--the estimated fair value of these items could
not be obtained without incurring excessive costs as these investments
have no quoted market price.
. Long-term receivables--the carrying amounts of these items are a
reasonable estimate of their fair value.
. Short-term borrowings--Borrowings under the line of credit arrangements
have variable rates that reflect currently available terms and
conditions for similar debt. The carrying amount of this debt is a
reasonable estimate of its fair value.
. Long-term debt--
. Borrowings under the U.S. and European Facilities credit agreement have
variable rates that reflect currently available terms and conditions for
similar debt. The carrying amount of this debt is a reasonable estimate
of its fair value.
. Senior notes and senior subordinated debentures are traded occasionally
in public markets.
. Interest rate protection agreements have no carrying value; however, if
the Company were to terminate these agreements at March 31, 1996, the
Company would be obligated to pay $2,881, based on quotes from financial
institutions.
. Lead forward and futures contracts--the estimated fair value of the
outstanding contracts at March 31, 1996, exceed the contract value by
$14,493, based on quotes from brokers.
The carrying values and estimated fair values of the Company's long-term
debt for which the amounts differ are as follows at March 31, 1996:
<TABLE>
<CAPTION>
CARRYING ESTIMATED
VALUE FAIR VALUE
-------- ----------
<S> <C> <C>
10% Senior Notes...................................... $300,000 $306,870
10.75% Senior Notes................................... 150,000 154.410
12.25% Senior Subordinated Debentures................. 89,856 91,949
2.9% Convertible Senior Subordinated Notes............ 290,124 236,253
</TABLE>
15. COMMITMENTS AND CONTINGENCIES:
A patent infringement suit was filed in the U.S. District Court in Oregon
against the Company in January 1995 by Tekmax, Inc. The suit claims
infringement of three Tekmax patents dealing with a device to insert battery
plates into battery separators and processes for doing so. The complaint seeks
damages in excess of the jurisdictional requirement of $50 (although plaintiff
requested $6,000 before the suit was filed). In the course of trial
preparation, plaintiff voluntarily dismissed the claims related to the
infringement of one of the patents and the Company obtained summary judgment
as to the claims of one other patent. The trial of the claims related to the
single patent now in controversy is scheduled to begin in July 1996.
Management, after consultation with legal counsel, does not believe the
ultimate resolution of this matter will have a material adverse effect on the
Company's financial condition or results of operations.
F-24
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
The Company is now or recently has been involved in several related lawsuits
pending in state and federal courts in Alabama and North Carolina. These
actions are related because they contain allegations that the Company sold
used batteries as new. The only one of these actions which was certified as a
class action by the trial court was subsequently decertified by action of the
Appellate Court and was subsequently dismissed on June 12, 1996. The remaining
actions seek unspecified compensatory and punitive damages and injunctive
relief. The federal court action is a wrongful termination suit by a former
branch manager of Exide who claims he was terminated for refusing to sell used
batteries as new. The Company is seeking summary dismissal of this action. The
Company disputes all material allegations of these matters and intends to
vigorously defend itself.
The Company is involved in various other claims and litigation incidental to
the conduct of its business. Based on consultation with legal counsel,
management does not believe that any claims or litigation to which the Company
is a party will have a material adverse effect on the Company's financial
condition or results of operations. In the fourth quarter of fiscal 1996, the
Company paid $5,548 as a result of an unfavorable verdict from the U.S. Court
of Appeals in a patent infringement matter. Such amount was recorded as Other
Expense.
Future minimum lease payments under operating and capital leases that have
initial or remaining noncancelable lease terms in excess of one year at March
31, 1996, are:
<TABLE>
<CAPTION>
FISCAL YEAR OPERATING CAPITAL
----------- --------- -------
<S> <C> <C>
1997..................................................... $ 35,436 $ 3,064
1998..................................................... 27,460 3,068
1999..................................................... 18,279 2,776
2000..................................................... 10,740 2,658
2001..................................................... 5,331 2,561
Thereafter............................................... 14,484 24,692
-------- -------
Total minimum payments................................... $111,730 38,819
--------
Less interest on capital leases.......................... (14,869)
-------
Total principal payable on capital leases................ $23,950
=======
</TABLE>
Rent expense amounted to $14,322, $21,994 and $37,468 for the fiscal years
ended March 31, 1994, 1995 and 1996, respectively.
The Company has various purchase commitments for materials, supplies and
items of permanent investment incident to the ordinary conduct of business. In
the aggregate, such commitments are not at prices in excess of current market.
F-25
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
16. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED):
The following is a summary of the Company's unaudited quarterly consolidated
results of operations for the fiscal years ended March 31, 1995 and 1996:
<TABLE>
<CAPTION>
FISCAL QUARTER ENDED
-------------------------------------------
JULY 3, OCTOBER 2, JANUARY 1, MARCH 31,
1994 1994 1995 1995
-------- ---------- ------------ ---------
<S> <C> <C> <C> <C>
Net sales....................... $165,067 $233,142 $436,796 $363,541
Gross profit.................... 40,617 56,007 98,530 70,526
Income (loss) before
extraordinary loss............. (41) 10,038 10,453 (15,959)
Net income (loss)............... (41) 6,441 10,453 (15,959)
Per share:
Income (loss) before
extraordinary loss........... $ -- $ 0.68 $ 0.69 $ (0.80)
Extraordinary loss............ -- (0.24) -- --
-------- -------- -------- --------
Net income (loss)............. $ -- $ 0.44 $ 0.69 $ (0.80)
======== ======== ======== ========
<CAPTION>
FISCAL QUARTER ENDED
-------------------------------------------
JULY 2, OCTOBER 1, DECEMBER 31, MARCH 31,
1995 1995 1995 1996
-------- ---------- ------------ ---------
<S> <C> <C> <C> <C>
Net sales....................... $432,320 $628,907 $719,929 $561,460
Gross profit.................... 89,094 145,558 184,370 135,363
Income (loss) before
extraordinary loss............. (14,678) 10,286 22,583 (17,252)
Net income (loss)............... (14,678) 10,286 12,995 (17,264)
Per share:
Income (loss) before
extraordinary loss........... $ (0.74) $ 0.51 $ 1.10 $ (0.83)
Extraordinary loss............ -- -- (0.47) --
-------- -------- -------- --------
Net income (loss)............. $ (0.74) $ 0.51 $ 0.63 $ (0.83)
======== ======== ======== ========
</TABLE>
F-26
<PAGE>
EXIDE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(CONTINUED)
17. BUSINESS SEGMENT AND GEOGRAPHIC INFORMATION:
The Company is primarily engaged in one industry segment, namely, the
manufacture, distribution and sale of lead acid batteries and related
accessories. Financial information, summarized by geographic area, is as
follows:
<TABLE>
<CAPTION>
NORTH
AMERICA EUROPE OTHER CONSOLIDATED
-------- ---------- -------- ------------
<S> <C> <C> <C> <C>
Year ended March 31, 1995:
Sales to unaffiliated customers.. $825,133 $ 373,413 $ -- $1,198,546
-------- ---------- -------- ----------
Income (loss) before income
taxes, minority interest and
extraordinary loss.............. $ (5,318) $ 16,041 $ -- $ 10,723
-------- ---------- -------- ----------
Identifiable assets.............. $691,391 $ 772,740 $173,458 $1,637,589
-------- ---------- -------- ----------
<CAPTION>
NORTH
AMERICA EUROPE OTHER CONSOLIDATED
-------- ---------- -------- ------------
<S> <C> <C> <C> <C>
Year ended March 31, 1996:
Sales to unaffiliated customers.. $926,543 $1,416,073 $ -- $2,342,616
-------- ---------- -------- ----------
Income (loss) before income
taxes, minority interest and
extraordinary loss.............. $(64,822) $ 71,552 $ -- $ 6,730
-------- ---------- -------- ----------
Identifiable assets.............. $691,832 $1,827,061 $192,536 $2,711,429
======== ========== ======== ==========
</TABLE>
Other includes cash and cash equivalents, deferred tax assets, investments
and deferred financing costs.
F-27
<PAGE>
SCHEDULE II
EXIDE CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT ADDITIONS BALANCE AT
BEGINNING CHARGED TO WRITE- END
OF PERIOD EXPENSE OFFS OTHER OF PERIOD
---------- ---------- -------- ------- ----------
<S> <C> <C> <C> <C> <C>
Year Ended March 31,
1996:
Allowance for doubtful
accounts.............. $23,274 $4,016 $ (7,423) $25,483(1) $45,350
======= ====== ======== ======= =======
Year Ended March 31,
1995:
Allowance for doubtful
accounts.............. $ 4,846 $3,238 $(12,508) $27,698(1) $23,274
======= ====== ======== ======= =======
Year Ended March 31,
1994:
Allowance for doubtful
accounts.............. $ 4,771 $ 379 $ (1,725) $ 1,421(1) $ 4,846
======= ====== ======== ======= =======
</TABLE>
- --------
(1) Acquisitions of certain businesses.
F-28
<PAGE>
EXHIBITS:
---------
2.1 Agreement of Merger between EC Acquisition, Inc. ("ECA") and the
Registrant, incorporated by reference to Exhibit 2.1 of the
Registrant's Registration Statement on Form S-1 (No. 33-68016), as
amended (the "1993 Registration Statement").
3.1 Restated Certificate of Incorporation of the Registrant,
incorporated by reference to Exhibit of same number of the 1993
Registration Statement.
3.2 Restated Bylaws of the Registrant, incorporated by reference to
Exhibit of same number to the 1993 Registration Statement.
4.1 Form of Senior Note Indenture (including form of Senior Note),
incorporated by reference to Exhibit 4.1 of the Registrant's
Registration Statement on Form S-2 (No. 33-53666), as amended (the
"S-2 Registration Statement").
4.2 Form of Senior Subordinated Deferred Coupon Debenture Indenture
(including form of Senior Subordinated Debenture), incorporated by
reference to Exhibit 4.2 of the S-2 Registration Statement.
4.3 Agreement dated as of December 7, 1992, between the Registrant and
Inco United States, Inc., relating to the assumption of certain
liabilities, incorporated by reference to Exhibit 10.30 to the S-2
Registration Statement.
4.4 Registration Rights Agreement among the Registrant, Wilmington
Securities, Inc. and certain other holders of the Registrant's
Common Stock, incorporated by reference to Exhibit 4.14 to the 1993
Registration Statement.
4.5 Registration Rights Agreement dated as of December 15, 1995 among
the Registrant and the placement agents for the Notes issued under
the Indenture filed as Exhibit 4.7.
4.6 Indenture dated as of April 28, 1995, between the Registrant and The
Bank of New York, as trustee, incorporated by reference to Exhibit
99.3 of the Registrant's Form 8-K dated June 2, 1995 (the "CEAc 8-
K").
4.7 Indenture dated as of December 15, 1995 between the Registrant and
The Bank of New York, as trustee.
10.1 Receivables Purchase Agreement dated as of February 17, 1994, among
the Registrant and Three Rivers Funding Corporation, incorporated by
reference to Exhibit 10.1 to the 1994 Registration Statement.
10.2 Employment Agreement dated June 15, 1985 between the Registrant and
Arthur M. Hawkins, incorporated by reference to Exhibit 10.4 of the
Registrant's Registration Statement on Form S-1 (No. 33-13632), as
amended (the "S-1 Registration Statement").
10.3 Amendment dated June 7, 1988 to Employment Agreement between the
Registrant and Arthur M. Hawkins, incorporated by reference to
Exhibit 10.1 to the Registrant's Form 10-Q for the quarter ended
October 2, 1988.
10.4 Employment Agreement dated June 15, 1985 between the Registrant and
Douglas N. Pearson, incorporated by reference to Exhibit 10.5 to the
S-1 Registration Statement.
10.5 Employment Agreement dated June 1, 1987 between the Registrant and
William J. Rankin.
10.6 Amendment dated July 7, 1988 to Employment Agreement between the
Registrant and Douglas N. Pearson, incorporated by reference to
Exhibit 10.2 to the Registrant's Form 10-Q for the quarter ended
October 2, 1988.
10.7 Stock Purchase Agreement dated May 27, 1987 among the Registration,
Fruit of the Loom, Inc. and Northwest Industries Leasing Company,
incorporated by reference to Exhibit 2 to the S-1 Registration
Statement.
10.8 Lease Agreement dated July 1, 1988 between the Registrant and an
officer of the Registrant pertaining to Chippewa Trail Lodge,
incorporated by reference to Exhibit 10.28 to the 1989 10-K.
<PAGE>
EXHIBITS:
---------
10.9 Amendment to Lease Agreement dated October 24, 1988 between the
Registrant and Chippewa Trail Lodge, Inc., incorporated by reference
to Exhibit 10.29 to the 1989 10-K.
10.10 Assignment of Lease dated July 1, 1988 between an officer of the
Registrant and Chippewa Trail Lodge, Inc., incorporated by reference
to Exhibit 10.30 to the 1989 10-K.
10.11 Assignment and Assumption of Lease dated October 24, 1988 between an
officer of the Registrant and Chippewa Trail Lodge, Inc.,
incorporated by reference to Exhibit 10.31 to the 1989 10-K.
10.12 Lease Agreement dated August 1, 1978 pertaining to the Reading,
Pennsylvania administrative office facilities, amended as of April
1, 1979, incorporated by reference to Exhibit 10.20 to the S-1
Registration Statement.
10.13 Lease Agreement dated February 1, 1974 pertaining to the Manchester,
Iowa manufacturing facilities, incorporated by reference to Exhibit
10.21 to the S-1 Registration Statement.
10.14 Lease Agreements (Series A and Series B) dated September 1, 1976
pertaining to the Salina, Kansas manufacturing facilities,
incorporated by reference to Exhibit 10.22 to the S-1 Registration
Statement.
10.15 Lease Agreement dated August 1, 1978, pertaining to the Reading,
Pennsylvania engineering facilities, incorporated by reference to
Exhibit 10.23 to the S-1 Registration Statement.
10.16 Lease Agreement dated January 5, 1978, pertaining to the City of
Industry, California distribution facilities, incorporated by
reference to Exhibit 10.24 to the S-1 Registration Statement.
10.17 Lease Agreement dated August 11, 1986, pertaining to the Sumner,
Washington Distribution facilities, incorporated by reference to
Exhibit 10.27 to the S-1 Registration Statement.
10.18 Lease Agreement beginning December 1, 1987, pertaining to the
Travelers Rest, South Carolina distribution facilities, incorporated
by reference to Exhibit 10.27 to the Registrant's Form 10-K for the
fiscal year ended March 31, 1988.
10.19 Asset Purchase Agreement, dated as of June 10, 1991, between the
Registrant and Yuasa Battery (America), Inc., incorporated by
reference to Exhibit 1 to the Registrant's Form 8-K dated June 25,
1991.
10.20 EC Acquisition, Inc. 1993 Stock Award Plan, incorporated by
reference to Exhibit 10.23 to the 1993 Registration Statement.
10.21 Battronics Purchase Agreement, incorporated by reference to Exhibit
10.24 to the 1993 Registration Statement.
10.22 Exide 1993 Long Term Incentive Plan, incorporated by reference to
Exhibit 10.25 to the 1993 Registration Statement.
10.23 Agreement dated September 30, 1994, among Gemala (Isle of Man)
Limited, PT Sapta Panji Manggala, and B.I.G. Batteries Group
Limited. Deed dated September 30, 1994, among Euro Exide Corporation
Limited, Gemala (Isle of Man) Limited and B.I.G. Batteries Group
Limited. Master Agreement dated September 30, 1994 among Euro Exide
Corporation Limited, Gemala (Isle of Man) Limited, B.I.G. Batteries
Group Limited and PT Sapta Panji Manggala, incorporated by reference
to Exhibit 10.24 of the December 1994 Registration Statement.
10.24 Stock Purchase Agreement and Warranty Agreement dated March 17,
1995, between the Registrant and Fiat SpA and one of its affiliates,
incorporated by reference to Exhibit 2.2 of the CEAc 8-K.
10.25 Composite copy of Credit Agreement (the "Credit Agreement") dated as
of August 30, 1994, as amended, among the Registrant, various
financial institutions, Bankers Trust Company, Bank of America
National Trust and Savings Association and Bank of Montreal, as
Agents, and Bankers Trust Company, as Administrative Agent.
<PAGE>
<TABLE>
<CAPTION>
EXHIBITS:
---------
<C> <S>
10.26 Facilities Agreement dated November 30, 1995, as amended, among
certain of the Registrant's subsidiaries, the banks listed for the
Credit Agreement, Citibank International plc and other lenders.
10.27 Lease Agreement dated February 7, 1994, pertaining to the Bristol,
Tennessee manufacturing facility and related amendment dated May
1995.
11.1 Statement re computation of per-share earnings.
21.1 Subsidiaries of the Registrant.
27.0 Financial data schedule
</TABLE>
<PAGE>
Exhibit 4.5
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of December 15, 1995 by and among Exide Corporation, a Delaware
corporation (the "Company"), and Morgan Stanley & Co. Incorporated, Salomon
Brothers Inc and BT Securities Corporation (the "Placement Agents") pursuant to
the Placement Agreement, dated as of December 11, 1995 (the "Placement
Agreement"), between the Company and the Placement Agents. In order to induce
the Placement Agents to enter into the Placement Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Placement
Agreement.
The Company agrees with the Placement Agents, (i) for their benefit as
Placement Agents and (ii) for the benefit of the holders from time to time of
the Notes (including the Placement Agents) and the holders from time to time of
the Common Stock issued upon conversion of the Notes (each of the foregoing a
"Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition
-----------
shall have their respective meanings set forth in the Placement Agreement. As
used in this Agreement, the following terms shall have the following meanings:
Affiliate: "Affiliate" means, with respect to any specified person,
---------
(i) any other person directly or indirectly controlling or controlled by,
or under direct or indirect common control with, such specified person or
(ii) any officer or director of such other person. For purposes of this
definition, the term "control" (including the terms "controlling,"
"controlled by" and "under common control with") of a person means the
possession, direct or indirect, of the power (whether or not exercised) to
direct or cause the direction of the management and policies of a person,
whether through the ownership of voting securities, by contract, or
otherwise.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday
------------
that is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
Common Stock: The shares of common stock, $.01 par value per share,
------------
of the Company and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, in each case, as issuable or
issued upon conversion of the Notes.
<PAGE>
2
Damages Accrual Period: See Section 2(e) hereof.
----------------------
Deferral Period: See Section 2(d) hereof.
---------------
Effectiveness Period: The period commencing with the date hereof and
--------------------
ending on the earlier of the expiration of the time period referred to in
Rule 144(k) (taking into account the provisions of Rule 144(d) under the
Securities Act) and the date that all Registrable Securities have ceased to
be Registrable Securities.
Event: See Section 2(e) hereof.
-----
Event Date: See Section 2(e) hereof.
----------
Exchange Act: The Securities Exchange Act of 1934, as amended, and
------------
the rules and regulations of the SEC promulgated thereunder.
Filing Date: See Section 2(a) hereof.
-----------
Holder: See the second paragraph of this Agreement.
------
Indenture: The Indenture, dated as of December 15, 1995, between the
---------
Company and The Bank of New York, as trustee, pursuant to which the Notes
are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Initial Shelf Registration: See Section 2(a) hereof.
--------------------------
Managing Underwriters: The investment banking firm or firms that
---------------------
shall manage or co-manage an Underwritten Offering.
Notes: The 2.90% Convertible Senior Subordinated Notes due 2005 of
-----
the Company being issued and sold pursuant to the Placement Agreement and
the Indenture.
Notice Holder: See the second paragraph of Section 2(d)(i) hereof.
-------------
Placement Agents: Morgan Stanley & Co. Incorporated, Salomon Brothers
----------------
Inc and BT Securities Corporation.
Placement Agreement: See the first paragraph of this Agreement.
-------------------
<PAGE>
3
Prospectus: The prospectus included in any Registration Statement
----------
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any amendment or prospectus
supplement, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such
Prospectus.
Registrable Securities: The Common Stock of the Company into which
----------------------
the Notes are convertible or converted, whether or not such Notes have been
converted, and at all times subsequent thereto, and any Common Stock issued
with respect thereto upon any stock dividend, split or similar event until,
in the case of any such Common Stock, (i) it is effectively registered
under the Securities Act and disposed of in accordance with the
Registration Statement covering it, (ii) it is saleable by the holder
thereof pursuant to Rule 144(k) or (iii) it is sold to the public pursuant
to Rule 144, and, as a result of the event or circumstance described in
either of the foregoing clauses (i) through (iii), the legends with respect
to transfer restrictions required under the Indenture are removed or
removable in accordance with the terms of the Indenture.
Registration Expenses: See Section 5 hereof.
---------------------
Registration Statement: Any registration statement of the Company
----------------------
which covers any of the Registrable Securities pursuant to the provisions
of this Agreement, including the Prospectus, amendments, and supplements to
such registration statement, including post-effective amendments, all
exhibits, and all material incorporated by reference or deemed to be
incorporated by reference in such registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
--------
amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
Rule 144(k): Rule 144(k) under the Securities Act, as such Rule may
-----------
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
---------
amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
SEC: The Securities and Exchange Commission.
---
<PAGE>
4
Securities Act: The Securities Act of 1933, as amended, and the rules
--------------
and regulations promulgated by the SEC thereunder.
Selling Period: See the second paragraph of Section 2(d)(i) hereof.
--------------
Shelf Registration: See Section 2(a) hereof.
------------------
shelf registration statement: A registration statement for an
----------------------------
offering to be made on a continuous basis pursuant to Rule 415 under the
Securities Act registering the resale from time to time by the holders
thereof of all of the Registrable Securities upon and following conversion
of the Notes.
Subsequent Shelf Registration: See Section 2(b) hereof.
-----------------------------
TIA: The Trust Indenture Act of 1939, as amended.
---
Trustee: The Trustee under the Indenture.
-------
Underwritten Registration or Underwritten Offering: A registration in
--------------------------------------------------
which Registrable Securities are sold to an underwriter for reoffering to
the public.
2. Shelf Registration.
------------------
(a) Shelf Registration. The Company shall prepare and file with the
------------------
SEC, as soon as practicable but in any event on or prior to the date sixty (60)
days following the latest date of original issuance of the Notes (the "Filing
Date"), a shelf registration statement (the "Initial Shelf Registration"). The
Initial Shelf Registration shall be on Form S-3 or another appropriate form
permitting registration of the Registrable Securities for resale by the Holders
in one or more Underwritten Offerings, privately negotiated transactions, sales
on the New York Stock Exchange, sales to brokers or dealers or otherwise. The
Company shall use reasonable efforts to cause the Initial Shelf Registration to
be declared effective under the Securities Act as soon as practicable and to
keep the Initial Shelf Registration continuously effective under the Securities
Act until the earlier of the expiration of the Effectiveness Period or the date
a Subsequent Shelf Registration (as defined below) covering all of the
Registrable Securities has been declared effective under the Securities Act.
The Initial Shelf Registration and all Subsequent Shelf Registrations shall be
referred to herein collectively as the "Shelf Registration".
(b) If the Initial Shelf Registration or any Subsequent Shelf
Registration ceases to be effective for any reason at any time during the
Effective Period (other than because all Registrable Securities registered
thereunder shall have been sold or shall have ceased to be Registrable
Securities), the Company shall use reasonable efforts to obtain the
<PAGE>
5
prompt withdrawal of any order suspending the effectiveness thereof, and in any
event shall within thirty (30) days of such cessation of effectiveness amend
such Shelf Registration in a manner reasonably expected to obtain the withdrawal
of the order suspending the effectiveness thereof, or file an additional shelf
registration statement covering all of the Registrable Securities (a "Subsequent
Shelf Registration") unless an amendment or Subsequent Shelf Registration could
not reasonably be expected to remedy such lapse. If a Subsequent Shelf
Registration is filed, the Company shall use reasonable efforts to cause such
Subsequent Shelf Registration to be declared effective as soon as practicable
after such filing and to keep such Registration Statement continuously effective
until the end of the Effectiveness Period.
(c) The Company shall supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable to the
registration form under the Securities Act used by the Company for such Shelf
Registration, if required by the Securities Act or if reasonably requested by
the Placement Agents or by the Trustee on behalf of the Holders of the
Registrable Securities covered by such Registration Statement or by the Managing
Underwriters of such Registrable Securities; provided that the party or parties
making such request shall have furnished to the Company with such request a
written description of such request and reasonable legal grounds therefor.
(d) Each Holder of Registrable Securities agrees that if such Holder
wishes to distribute its Registrable Securities pursuant to a Shelf Registration
and related Prospectus, it will do so only in accordance with this Section 2(d).
Each Holder of Registrable Securities agrees to give written notice to the
Company prior to any intended distribution of Registrable Securities under the
Shelf Registration, which notice shall specify the date on which such Holder
intends to begin such distribution. By giving such notice, the Holder consents
and agrees to the terms and conditions of this Agreement and accepts both the
rights and duties set forth herein. Within five Business Days after receipt of
such notice, the Company shall either:
(i) (A) If necessary, prepare and file with the Commission a post-
effective amendment to the Shelf Registration or a supplement to the
related Prospectus or a supplement or amendment to any document
incorporated therein by reference or file any other required document so
that such Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and so
that, as thereafter delivered to purchasers of the Registrable Securities
being sold thereunder, such Prospectus will not contain an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; (B) provide the
Holders of the Registrable Securities who gave such notice copies of any
documents filed pursuant to Section 2(d)(i)(A); and (C) inform each such
Holder
<PAGE>
6
that the Company has complied with its obligations in Section 2(d)(i)(A) or
that it is not necessary for the Company to take any of the actions
described in Section 2(d)(i)(A) (or that, if the Company has filed a post-
effective amendment to the Shelf Registration which has not yet been
declared effective, the Company will notify each such Holder to that
effect, will use reasonable efforts to secure the effectiveness of such
post-effective amendment as promptly as practicable and will immediately
notify each such Holder when the amendment has become effective).
Each Holder who has given notice of intention to distribute such
Holder's Registrable Securities in accordance with this Section 2(d) (a
"Notice Holder") shall distribute all or any such Registrable Securities
pursuant to the Shelf Registration and related Prospectus only upon notice
by the Company that the Registration Statement and Prospectus may be used
for such purpose pursuant to clause 2(d)(i)(C) above and only during the
45-day period commencing with the date on which the Company gives such
notice (such 45-day period is referred to as a "Selling Period"). The
Notice Holders will not distribute any Registrable Securities pursuant to
such Registration Statement or Prospectus after such Selling Period without
giving a new notice of intention to distribute pursuant to Section 2(d)
hereof and receiving a further notice from the Company pursuant to Section
2(d)(i)(C) hereof.
(ii) In the event of the happening of any event (A) of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), or 3(c)(vi)
hereof or (B) that the Company believes in good faith makes it advisable to
suspend use of the Prospectus for a discrete period of time due to pending
material corporate developments or similar material events that have not
yet been publicly disclosed and as to which the Company believes in good
faith that public disclosure will be disadvantageous to the Company and/or
its stockholders, the Company shall deliver a certificate in writing,
signed by its Chief Executive Officer, Chief Financial Officer, General
Counsel or Treasurer, to the Notice Holders, and the Managing Underwriters,
if any, to the effect of the foregoing and, upon receipt of such
certificate, each such Notice Holder's Selling Period will not commence or
shall be suspended until such Notice Holder's receipt of copies of the
supplemented or amended Prospectus provided for in Section 2(d)(i)(A)
hereof, or until it is advised in writing by the Company that the
Prospectus may be used, and it has received copies of any additional or
supplemental filings that are incorporated or deemed incorporated by
reference in such Prospectus. The Company will use reasonable efforts to
ensure that the use of the Prospectus may be resumed, and the Selling
Period will commence or recommence, as soon as practicable and, in the case
of a pending development or event referred to in Section 2(d)(ii)(B)
hereof, as soon as the earlier of (x) public disclosure of such pending
material corporate development or similar material event or (y) the date
upon which in the judgment of the Company, public disclosure of such
material corporate development or similar material event would not be
disadvantageous to the Company
<PAGE>
7
and/or its stockholders. Notwithstanding the foregoing, the Company shall
not under any circumstances be entitled to exercise its right under this
Section 2(d)(ii) to defer the commencement or recommencement of Selling
Periods more than one (1) time in any three (3) month period or two (2)
times in any twelve (12) month period, and each such period in which
Selling Periods are suspended shall not exceed thirty-five (35) days (a
"Deferral Period").
(e) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
has not been filed on or prior to the Filing Date, (ii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending the
effectiveness of the Shelf Registration, (iii) the aggregate number of days in
any one Deferral Period exceeds the periods permitted pursuant to Section
2(d)(ii) hereof or (iv) the number of Deferral Periods exceeds the number
permitted pursuant to Section 2(d)(ii) hereof (each of the events of a type
described in any of the foregoing clauses (i) through (iv) are individually
referred to herein as an "Event," and the Filing Date in the case of clause (i),
the date on which the effectiveness of the Shelf Registration has been suspended
or proceedings with respect to the Shelf Registration under Section 8(d) or 8(e)
of the Securities Act have been commenced in the case of clause (ii), the date
on which the duration of a Deferral Period exceeds the periods permitted by
Section 2(d)(ii) hereof in the case of clause (iii), and the date of the
commencement of a Deferral Period that causes the limit on the number of
Deferral Periods under Section 2(d)(ii) hereof to be exceeded in the case of
clause (iv), being referred to herein as an "Event Date"). Events shall be
deemed to continue until the "Event Termination," which shall be the following
dates with respect to the respective types of Events: the date the Initial
Registration Statement is filed in the case of an Event of the type described in
clause (i), the date that all stop orders suspending effectiveness of the Shelf
Registration have been removed, in the case of Events of the types described in
clause (ii), termination of the Deferral Period which caused the periods
permitted by Section 2(d)(ii) to be exceeded in the case of the commencement of
an Event of the type described in clause (iii), and termination of the Deferral
Period the commencement of which caused the number of Deferral Periods permitted
by Section 2(d)(ii) to be exceeded in the case of Events of the type described
in clause (iv).
Accordingly, upon the occurrence of any Event and until such time as
there are no Events which have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages Amount"): (A)(i) to each holder
of a Note that is a Notice Holder, accruing at a rate equal to one-half of one
percent per annum (50 basis points) on the aggregate principal amount at
maturity of Notes held by such Notice Holder and (ii) to each holder of Common
Stock that is a Notice Holder, accruing at a rate equal to one-half of one
percent per annum (50 basis points) calculated on an amount equal to the
aggregate principal
<PAGE>
8
amount at maturity of the Notes that were converted into such Common Stock; and
(B) if the Damages Accrual Period continues for in excess of thirty (30) days,
from and after the end of such thirty (30) day period until the end of the
applicable Damages Accrual Period, (i) to each holder of a Note (whether or not
a Notice Holder), accruing at a rate equal to one-half of one percent per annum
(50 basis points) on the aggregate principal amount at maturity of Notes held by
such holder and (ii) to each holder of Common Stock (whether or not a Notice
Holder), accruing at a rate equal to one-half of one percent per annum (50 basis
points) calculated on an amount equal to the aggregate principal amount at
maturity of the Notes that were converted into such Common Stock.
Notwithstanding the foregoing, no Liquidated Damages Amounts shall accrue under
clause (A) of the preceding sentence during any period for which Liquidated
Damages Amounts accrue under Clause (B) of the foregoing sentence or as to any
Registrable Securities from and after the earlier of (x) the date such
securities are no longer Registrable Securities, and (y) expiration of the
Effectiveness Period. The rate of accrual of the Liquidated Damages Amount with
respect to any period shall not exceed the rate provided for in this paragraph
notwithstanding the occurrence of multiple concurrent Events.
The Company shall pay the liquidated damages due on any Notes or
Common Stock by depositing with the Trustee under the Indenture (with respect to
payments to be made to holders of Notes) or with the Registrar of the Common
Stock (with respect to payments to be made to holders of Common Stock), in
trust, for the benefit of the holders of Notes or Common Stock or Notice
Holders, as the case may be, entitled thereto, at least one Business Day prior
to the applicable payment date, sums sufficient to pay the liquidated damages
accrued or accruing since the last preceding payment date through such payment
date. For these purposes, subject to the proviso set forth in the next
sentence, payment dates will be the same dates as the interest payment dates
with respect to the Notes under the Indenture. The Liquidated Damages Amount
due shall be payable to the holder of Notes or Common Stock entitled thereto on
such payment date to the holders of record thereof on the applicable record date
(corresponding to the record dates for interest payments on the Notes), provided
that accrued and unpaid Liquidated Damages Amounts shall be paid on the
applicable redemption date upon the redemption of any Note (to the extent
accrued with respect to such Note) and, in the event of redemption of all Notes,
shall also be paid on such redemption date to the holders of Common Stock (to
the extent accrued with respect to such Common Stock). The Trustee or Registrar
of Common Stock, as applicable, shall be entitled, on behalf of the holders of
the Notes, Common Stock and Notice Holders, to seek any available remedy for the
enforcement of this Agreement, including for the payment of such liquidated
damages. Nothing shall preclude a Notice Holder or holder of Registrable
Securities from pursuing or obtaining specific performance or other equitable
relief with respect to this Agreement, in addition to the payment of the
Liquidated Damages Amount.
All of the Company's obligations set forth in this Section 2(e) which
are outstanding with respect to any Registrable Securities at the time such
security ceases to be a
<PAGE>
9
Registrable Security shall survive until such time as all such obligations with
respect to such security have been satisfied in full (notwithstanding
termination of this Agreement pursuant to Section 8(o)).
The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by holders of Registrable Securities by reason of the failure of the
Shelf Registration to be filed or declared effective or unavailable (absolutely
or as a practical matter) for effecting resales of Registrable Securities, as
the case may be, in accordance with the provisions hereof.
3. Registration Procedures. In connection with the Company's
-----------------------
registration obligations under Section 2 hereof, the Company shall effect such
registration to permit the sale of the Registrable Securities, and pursuant
thereto the Company shall as expeditiously as possible:
(a) As described in Section 2(a), prepare and file with the SEC a
Registration Statement or Registration Statements on any appropriate form
under the Securities Act available for the sale of the Registrable
Securities by the Holders thereof, and use reasonable efforts to cause each
such Registration Statement to become effective and remain effective as
provided herein; provided that before filing any such Registration
--------
Statement or Prospectus or any amendments or supplements thereto (other
than documents that would be incorporated or deemed to be incorporated
therein by reference and that the Company is required by applicable
securities laws or stock exchange requirements to file) the Company shall
furnish to the Placement Agents and the Managing Underwriters of such
offering, if any, copies of all such documents proposed to be filed, and
the Company shall not file any such Registration Statement or amendment
thereto or any Prospectus or any supplement thereto (other than such
documents which, upon filing, would be incorporated or deemed to be
incorporated by reference therein and that the Company is required by
applicable securities laws or stock exchange requirements to file) to which
the Holders of a majority of the Registrable Securities covered by such
Registration Statement, the Placement Agents, any Managing Underwriters or
their counsel shall reasonably object in writing within two full Business
Days of receipt thereof; provided that the party or parties objecting shall
have furnished to the Company with such objection a written description of
such objection and reasonable legal grounds therefor.
(b) Subject to Section 3(a), prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as
may be necessary to keep such Registration Statement continuously effective
throughout the Effectiveness Period; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be filed pursuant to Rule 424 (or any similar provisions then in force)
under the Securities Act; and comply with the provisions of
<PAGE>
10
the Securities Act with respect to the disposition of all securities
covered by such Registration Statement and Prospectus.
(c) Notify the selling Holders, the Placement Agents, and the Managing
Underwriters, if any, promptly, and (if requested by any such person)
confirm such notice in writing, (i) when a Prospectus, any Prospectus
supplement, a Registration Statement or a post-effective amendment to a
Registration Statement has been filed with the SEC, and, with respect to a
Registration Statement or any post-effective amendment, when the same has
become effective, (ii) of any request by the SEC or any other federal or
state governmental authority for amendments or supplements to a
Registration Statement or related Prospectus or for additional information,
(iii) of the issuance by the SEC or any other federal or state governmental
authority of any stop order suspending the effectiveness of a Registration
Statement or the initiation or threatening of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from
qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the existence of any fact or happening of any event which
makes any statement of a material fact in such Registration Statement or
related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue or which would require the making
of any changes in the Registration Statement or Prospectus in order that,
in the case of the Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any material fact or
omit to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and (vi) of the Company's
determination that a post-effective amendment to a Registration Statement
would be appropriate.
(d) Use reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of
any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the
earliest possible moment.
(e) If reasonably requested by the Placement Agents or the Managing
Underwriters, if any, or the Holders of a majority of the Registrable
Securities being sold, (i) promptly incorporate in a Prospectus supplement
or post-effective amendment to a Registration Statement such information as
the Placement Agents or their counsel, the Managing Underwriters, if any,
or their counsel or such Holders, in connection with any offering of
Registrable Securities, believe should be included therein as required by
applicable law, provided that the party or parties making such a
<PAGE>
11
request shall have furnished to the Company with such request a written
description of such request and reasonable legal grounds therefor, and (ii)
make all required filings of such Prospectus supplement or such post-
effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus
supplement or post-effective amendment; provided that the Company shall not
--------
be required to take any actions under this Section 3(e) that are not, in
the reasonable opinion of counsel for the Company, in compliance with
applicable law.
(f) Furnish to each Notice Holder, and the Placement Agents and their
counsel, and each Managing Underwriter, if any, and their counsel without
charge, at least one conformed copy of the Registration Statement or
Statements and any amendment thereto, including financial statements but
excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (unless requested in
writing by such holder, counsel, Placement Agents or underwriter).
(g) Deliver to each Notice Holder, and the Placement Agents and their
counsel and each Managing Underwriter, if any, and their counsel in
connection with any offering of Registrable Securities, without charge, as
many copies of the Prospectus or Prospectuses relating to such Registrable
Securities (including each preliminary prospectus) and any amendment or
supplement thereto as such persons may reasonably request (such request to
include the address and other information to which such documents are to be
delivered); and the Company hereby consents to the use of such Prospectus
or each amendment or supplement thereto by each of the Notice Holders and
the Underwriters, if any, in connection with any offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or
supplement thereto.
(h) Solely to facilitate the resale of Registrable Securities under a
Registration Statement, prior to any public offering of Registrable
Securities, to register or qualify such Registrable Securities for offer
and sale under the securities or Blue Sky laws of the states of the United
States; keep each such registration or qualification (or exemption
therefrom) effective during the period such Registration Statement is
required to be kept effective and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of
the Registrable Securities covered by the applicable Registration
Statement; provided, that the Company shall not be required to (A) qualify
as a foreign corporation or as a dealer in securities in any jurisdiction
where it would not otherwise be required to qualify but for this Section
3(h), (B) file any general consent to service of process or (C) subject
itself to taxation in any such jurisdiction if it is not so subject.
<PAGE>
12
(i) Solely to facilitate the resale of Registrable Securities under a
Registration Statement, cause the Registrable Securities covered by the
applicable Registration Statement to be registered with or approved by such
other governmental agencies or authorities within the United States, except
as may be required solely as a consequence of the nature of such selling
Holder, in which case the Company will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such
approvals, as may be necessary to enable the selling Holder or Holders
thereof or the Managing Underwriters, if any, to consummate the disposition
of such Registrable Securities.
(j) During any Selling Period (other than during a Deferral Period),
immediately upon the existence of any fact or the occurrence of any event
as a result of which a Registration Statement shall contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, or a Prospectus shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, promptly prepare
and file (subject to the proviso in Section 3(a)) a post-effective
amendment to each Registration Statement or a supplement to the related
Prospectus or any document incorporated therein by reference or file any
other required document (such as a Current Report on Form 8-K) that would
be incorporated by reference into the Registration Statement so that the
Registration Statement shall not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and so that the
Prospectus will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, as thereafter delivered to the purchasers
of the Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, use reasonable
efforts to cause it to become effective as soon as practicable.
(k) Enter into such agreements (including, in the event of an
Underwritten Offering, an underwriting agreement in form, scope and
substance as is customary in underwritten offerings) and take all such
other reasonably necessary actions in connection therewith (including, in
the event of an underwritten offering, those reasonably requested by the
Managing Underwriters, if any, or the Holders of a majority of the
Registrable Securities being sold) in order to expedite or facilitate the
disposition of such Registrable Securities and in such connection, whether
or not an underwriting agreement is entered into, and if the registration
is an underwritten registration, (i) make such representations and
warranties to the Holders of such Registrable Securities and the
underwriters with respect to the business of the
<PAGE>
13
Company and its subsidiaries, the Registration Statement, Prospectus and
documents incorporated by reference or deemed incorporated by reference, if
any, in each case, in form, substance and scope as are customarily made by
issuers similar to the Company to underwriters in underwritten offerings
and confirm the same if and when requested; (ii) use reasonable efforts to
obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters and their counsel and the Holders
of a majority of the Registrable Securities being sold) addressed to each
of the underwriters or, if there are no underwriters, to the selling
holders covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably
requested by such Managing Underwriters and their counsel or the selling
holders, as the case may be; (iii) use reasonable efforts to obtain "cold
comfort" letters and updates thereof from the independent certified public
accountants of the Company (and, if necessary, any other certified public
accountants of any subsidiary of the Company or any business acquired or to
be acquired by the Company for which financial statements and financial
data are, or are required to be, included in the Registration Statement),
addressed to the selling Holders as a group and each of the Managing
Underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings; and (iv) deliver such documents and certificates as
may be reasonably requested by the holders of a majority of the Registrable
Securities being sold, the Managing Underwriters and their counsel to
evidence the continued validity of the representations and warranties of
the Company and its subsidiaries made pursuant to clause (i) above and to
evidence compliance with any customary conditions contained in the
underwriting agreement entered into by the Company. The form, scope and
substance of the underwriting agreement entered into by the Company in
connection with its public offering of common stock in December 1994 are
deemed reasonable for purposes of this Section. The above shall be done at
each closing under such underwriting or similar agreement as and to the
extent required thereunder.
(l) If requested in connection with a disposition of Registrable
Securities pursuant to a Registration Statement, make available for
inspection, during regular business hours and after reasonable advance
notice, by a representative of the Holders of Registrable Securities being
sold, any Managing Underwriter participating in any disposition of
Registrable Securities, if any, and any attorney or accountant retained by
such selling holders or underwriter, financial and other records, pertinent
corporate documents and properties of the Company and its subsidiaries as
reasonably requested, and cause the executive officers, directors and
employees of the Company and its subsidiaries to supply all information
reasonably requested by any such representative, Managing Underwriter,
attorney or accountant in connection with such disposition; subject to
reasonable assurances by each such person that such
<PAGE>
14
information will only be used in connection with matters relating to such
Registration Statement.
(m) Comply with all applicable rules and regulations of the SEC and
make generally available to its security holders earning statements (which
need not be audited) satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule promulgated
under the Securities Act) no later than 45 days after the end of any 12-
month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) (i) commencing at the end of any fiscal quarter in
which Registrable Securities are sold to underwriters in a firm commitment
or best efforts underwritten offering, and (ii) if not sold to underwriters
in such an offering, commencing on the first day of the first fiscal
quarter of the Company commencing after the effective date of a
Registration Statement, which statements shall cover said 12-month periods.
(n) Cooperate with the selling holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends;
and enable such Registrable Securities to be in such denominations and
registered in such names as the holders may request.
(o) Provide a CUSIP number for all Registrable Securities not later
than the effective date of the Registration Statement and provide the
Trustee under the Indenture and the transfer agent for the Common Stock
with printed certificates for the Registrable Securities which are in a
form eligible for deposit with The Depository Trust Company.
(p) Cause all Registrable Securities covered by the Registration
Statement to be listed on the New York Stock Exchange and each securities
exchange or quotation system on which the Company's Common Stock is then
listed no later than the date the Registration Statement is declared
effective.
(q) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.
4. Holder's Obligations. Each Holder agrees, by acquisition of the
--------------------
Notes and Registrable Securities, that no Holder of Registrable Securities shall
be entitled to sell any of such Registrable Securities pursuant to a
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with the notice required pursuant to Section
2(d) hereof and, promptly after the Company's request, such other information
regarding such Holder and the distribution of such Registrable Securities as may
be required to be included in the Registration or the Prospectus or the Company
may
<PAGE>
15
from time to time reasonably request. The Company may exclude from such
registration the Registrable Securities of any Holder who does not furnish such
information provided above for so long as such information is not so furnished.
Each Holder of Registrable Securities as to which any Registration Statement is
being effected agrees promptly to furnish to the Company all information
required to be disclosed in order to make the information previously furnished
to the Company by such Holder not misleading. Any sale of any Registrable
Securities by any Holder shall constitute a representation and warranty by such
Holder that the information relating to such Holder and its plan of distribution
is as set forth in the Prospectus delivered by such Holder in connection with
such disposition, that such Prospectus does not as of the time of such sale
contain any untrue statement of a material fact relating to such Holder or its
plan of distribution and that such Prospectus does not as of the time of such
sale omit to state any material fact relating to such Holder or its plan of
distribution necessary to make the statements in such Prospectus, in light of
the circumstances under which they were made, not misleading.
5. Registration Expenses. All fees and expenses incident to the
---------------------
Company's performance of or compliance with this Agreement shall be borne by the
Company whether or not any of the Registration Statements become effective.
Such fees and expenses shall include, without limitation, (i) all registration
and filing fees (including, without limitation, fees and expenses (x) with
respect to filings required to be made with the SEC, the National Association of
Securities Dealers, Inc. and any securities exchange on which the Company's
Common Stock is then listed and (y) relating to compliance with federal
securities or Blue Sky laws (including, without limitation, fees and
disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Securities under the laws of such jurisdiction as may be required
under Section 3(h) hereof)), (ii) all expenses incurred in connection with the
preparation, word processing, printing and distribution of any Registration
Statement, any Prospectus, any amendments or supplements thereto, any
underwriting agreements, certificates for Registrable Securities in a form
eligible for deposit with The Depository Trust Company, securities sales
agreements and other documents relating to the performance of and compliance
with this Agreement, (iii) the reasonable fees and disbursements of the Trustee
and its counsel and of the registrar and transfer agent for the Common Stock,
(iv) messenger, telephone and delivery expenses relating to the performance of
the Company's obligations hereunder, (v) fees and disbursements of counsel for
the Company and the reasonable fees and disbursements of counsel for the Holders
in connection with the Shelf Registration (provided, that the Company shall not
--------
be liable for the fees and expenses of more than one separate firm for all
parties participating in any transaction hereunder), (vi) fees and disbursements
of all independent certified public accountants referred to in Section 3(k)(iii)
hereof (including the expenses of any special audit and "cold comfort" letters
required by or incident to such performance) and (vii) Securities Act liability
insurance obtained by the Company in its sole discretion. In addition, the
Company shall pay its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of
<PAGE>
16
any annual audit, the fees and expenses incurred in connection with the listing
of the securities to be registered on any securities exchange on which similar
securities issued by the Company are then listed and the fees and expenses of
any person, including special experts, retained by the Company. Notwithstanding
the provisions of this Section 5, each seller of Registrable Securities shall
pay all selling expenses and all registration expenses, to the extent that the
Company is prohibited by applicable Blue Sky laws from paying for such expenses
or on behalf of such seller of Registrable Securities.
6. Indemnification.
---------------
(a) The Company agrees to indemnify and hold harmless the Placement
Agents, each Holder and each person, if any, who controls the Placement Agents
or any Holder within the meaning of either Section 15 of the Securities Act or
Section 20(a) of the Exchange Act, or is under common control with, or is
controlled by, the Placement Agents or any Holder, from and against all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred by the Placement Agents, any Holder or any
such controlling or affiliated person in connection with defending or
investigating any such action or claim) caused by any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement (or any amendment thereto) pursuant to which Registrable Securities
were registered under the Securities Act, including all documents incorporated
therein by reference, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or caused by any untrue statement or alleged
untrue statement of a material fact contained in any Prospectus (as amended or
supplemented), or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made not misleading, except insofar as such
losses, claims, damages or liabilities are caused by any such untrue statement
or omission or alleged untrue statement or omission based upon information
relating to the Placement Agents or any Holder furnished to the Company in
writing by the Placement Agents or any selling Holder expressly for use therein
or by such Holder's failure to deliver a copy of the Prospectus or any
amendments or supplements thereto after the Company has furnished such Holder
with a sufficient number of copies of the same.
(b) Each Holder agrees, and such agreement shall be evidenced by the
Holder delivering to the Company the notice described in Section 2(d) hereof,
severally and not jointly, to indemnify and hold harmless the Company, the
Placement Agents and the other selling Holders, and each of their respective
directors, officers who sign the Registration Statement and each person, if any,
who controls the Company, the Placement Agents and any other selling Holder
within the meaning of either Section 15 of the Securities Act or Section 20(a)
of the Exchange Act to the same extent as the foregoing indemnity from the
Company to the Placement Agents and the Holders, but only with reference to
<PAGE>
17
information relating to such Holder furnished to the Company in writing by such
Holder expressly for use in any Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement thereto) or by or on
behalf of such Holder's failure to deliver a copy of the Prospectus or any
amendments or supplements thereto after the Company has furnished such Holder
with a sufficient number of copies of the same.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either paragraph (a) or paragraph (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Placement Agents and all
persons, if any, who control the Placement Agents within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act, (b) the fees
and expenses of more than one separate firm (in addition to any local counsel)
for the Company, its directors, its officers who sign the Registration Statement
and each person, if any, who controls the Company within the meaning of either
such Section and (c) the fees and expenses of more than one separate firm (in
addition to any local counsel) for all Holders and all persons, if any, who
control any Holders within the meaning of either such Section, and that all such
fees and expenses shall be reimbursed as they are incurred. In such case
involving the Placement Agents and persons who control the Placement Agents,
such firm shall be designated in writing by Morgan Stanley & Co. Incorporated.
In such case involving the Holders and such persons who control Holders, such
firm shall be designated in writing by the holders of the majority of
Registrable Securities sold pursuant to the Registration Statement. In all
other cases, such firm shall be designated by the Company. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but, if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of
<PAGE>
18
counsel as contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such indemnifying party of the
aforesaid request and (ii) such indemnifying party shall not have reimbursed the
indemnified party for such fees and expenses of counsel in accordance with such
request prior to the date of such settlement. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which such
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
(d) If the indemnification provided for in paragraph (a) or paragraph
(b) of this Section 6 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities, then each indemnifying
party under such paragraph, in lieu of indemnifying such indemnified party
thereunder, shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received by the
indemnifying party or parties on the one hand and the indemnified party or
parties on the other hand from the distribution of Registrable Securities
pursuant to a Registration Statement or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party or parties on the
one hand and of the indemnified party or parties on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the initial placement (before deducting expenses) of the Notes
pursuant to the Placement Agreement. Benefits received by the Placement Agents
shall be deemed to be equal to the total purchase discounts and commissions
received by them pursuant to the Placement Agreement and benefits received by
any other Holders shall be deemed to be equal to the value of having the sale of
shares of Common Stock by such Holders registered under the Securities Act and
Blue Sky laws. Benefits received by any underwriter shall be deemed to be equal
to the total underwriting discounts and commissions, as set forth on the cover
page of the Prospectus forming a part of the Registration Statement which
resulted in such losses. The relative fault of the Company and the Holders
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Company or by
the Holders and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Holders'
respective obligations to contribute pursuant to this Section 6(d) are several
in proportion to the respective number of Registrable Securities of such Holder
that were registered pursuant to a Registration Statement, and not joint.
<PAGE>
19
(e) The Company and each Holder agree that it would not be just or
equitable if contribution pursuant to this Section 6 were determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph (d) above. The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages and liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, no Holder shall be required to indemnify or contribute any amount in
excess of the amount by which the total price at which Registrable Securities
were sold by such Holder exceeds the amount of any damages that such Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 6
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
the Placement Agents, any Holder or any person controlling the Placement Agents
or any Holder, or by or on behalf of the Company, its officers or directors or
any person controlling the Company, (iii) acceptance of any of the Registrable
Securities and (iv) any sale of Registrable Securities pursuant to a
Registration Statement.
The indemnity, contribution and expense reimbursement obligations of
the Company hereunder shall be in addition to any liability the Company may
otherwise have hereunder, under the Placement Agreement or otherwise. The
provisions of this Section 6 shall survive so long as Registrable Securities
remain outstanding, notwithstanding any transfer of the Registrable Securities
by any holder or any termination of this Agreement.
7. Information Requirements.
------------------------
(a) The Company shall file the reports required to be filed by it
under the Securities Act and the Exchange Act, and if at any time the Company is
not required to file such reports, it will, upon the request of any holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. Upon the request of any holder of Registrable Securities, the
Company shall deliver to such holder a written statement as to whether it has
complied with such filing requirements. The Company further covenants that it
will cooperate with any holder of Registrable Securities and take such further
reasonable action as any holder of Registrable Securities may reasonably request
(including, without limitation,
<PAGE>
20
making such reasonable representations as any such holder may reasonably
request), all to the extent required from time to time to enable such holder to
sell Registrable Securities pursuant to Rule 144 or Rule 144A under the
Securities Act. Notwithstanding the foregoing, nothing in this Section 7 shall
be deemed to require the Company to register any of its securities under any
section of the Exchange Act.
(b) The Company shall file the reports required to be filed by it
under the Exchange Act and shall comply with all other requirements set forth in
the instructions to Form S-3 in order to allow the Company to continue to be
eligible to file registration statements on Form S-3 during the Effectiveness
Period.
8. Miscellaneous.
-------------
(a) Remedies. In the event of a breach by the Company of its
--------
obligations under this Agreement, each holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement. The Company agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall waive
the defense that a remedy at law would be adequate.
(b) No Conflicting Agreements. The Company has not, as of the date
-------------------------
hereof, and shall not, on or after the date of this Agreement, enter into any
agreement with respect to its securities which conflicts with the rights granted
to the holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the holders of Registrable
Securities hereunder do not in any way conflict with the rights granted to the
holders of the Company's securities under any other agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of holders
of a majority of the then outstanding Common Stock constituting Registrable
Securities (with holders of Notes deemed to be the holders, for purposes of this
Section, of the number of outstanding shares of Common Stock into which such
Notes are convertible). Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of holders of Registrable Securities whose securities
are being sold pursuant to a Registration Statement and that does not directly
or indirectly affect the rights of other holders of Registrable Securities may
be given by holders of at least a majority of the Registrable Securities being
sold by such holders; provided that the provisions of this
--------
<PAGE>
21
sentence may not be amended, modified, or supplemented except in accordance with
the provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, registered first-
class mail, telex, telecopier, or any courier guaranteeing overnight delivery
(i) if to a Holder, at the most current address given by such Holder to the
Company by means of a written notice given in accordance with the provisions of
this Section 8(d), which address initially is, with respect to the Placement
Agents, the address set forth in the Placement Agreement; and (ii) if to the
Company, initially at the Company's address set forth in the Placement Agreement
and thereafter at such other address, notice of which is given in accordance
with the provisions of this Section 8(d).
All such notices and communications shall be deemed to have been duly
given at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next business day if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the person giving the same to the Trustee and the
Registrar for the Common Stock.
Each Managing Underwriter shall provide notice to the Company of its
service in such capacity and such notice shall contain information as to where
communications to such Managing Underwriter should be directed.
(e) Approval of Holders. Whenever the consent or approval of holders
-------------------
of a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its Affiliates (other than the
Placement Agents or subsequent holders of Registrable Securities if such
subsequent holders are deemed to be such Affiliates solely by reason of their
holdings of such Registrable Securities) shall not be counted in determining
whether such consent or approval was given by the holders of such required
percentage.
(f) Successors and Assigns. Any person who purchases any Registerable
----------------------
Securities shall be deemed, for purposes of this Agreement, to be an assignee of
such Placement Agent. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties and shall inure
to the benefit of and be binding upon each holder of any Registrable Securities.
<PAGE>
22
(g) Third Party Beneficiary. The Holders shall be third party
-----------------------
beneficiaries to the agreements made in this Agreement and each of the Holders
shall have the right to enforce such agreements directly to the extent it deems
such enforcement necessary or advisable to protect its rights or the rights.
(h) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
-------------
THE STATE OF NEW YORK.
(k) Severability. If any term, provision, covenant or restriction of
------------
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such which may be hereafter declared
invalid, illegal, void or unenforceable.
(l) Entire Agreement. This Agreement is intended by the parties as a
----------------
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Common Stock of the Company into
which Notes are convertible. Except as provided or disclosed in the Placement
Agreement, including the exhibits and schedules thereto, there are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein, with respect to the registration rights granted by the
Company with respect to the Common Stock of the Company into which the Notes are
convertible. This Agreement supersedes all prior agreements and understandings
among the parties with respect to such registration rights.
(m) Attorneys' Fees. In any action or proceeding brought to enforce
---------------
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
<PAGE>
23
(n) Further Assurances. Each of the parties hereto shall use all
------------------
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.
(o) Termination. This Agreement and the obligations of the parties
-----------
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Sections 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
their terms.
<PAGE>
Exhibit 4.7
EXIDE CORPORATION,
as Issuer,
and
THE BANK OF NEW YORK,
as Trustee
____________________
INDENTURE
Dated as of December 15, 1995
____________________
2.90% Convertible Senior Subordinated Notes
Due 2005
<PAGE>
TABLE OF CONTENTS/S/
<TABLE>
<CAPTION>
Page
----
<S> <C>
INDENTURE.................................................... 1
TRUSTEE'S CERTIFICATE OF AUTHENTICATION...................... 6
CONVERSION NOTICE............................................ 13
ASSIGNMENT................................................... 15
OPTION TO ELECT REDEMPTION UPON A FUNDAMENTAL CHANGE......... 17
Schedule A: Changes to Principal Amount of Global Security.. 18
</TABLE>
ARTICLE ONE
<TABLE>
<CAPTION>
DEFINITIONS
<S> <C> <C>
SECTION 1.01. Definitions................................... 19
SECTION 1.02. Rules of Construction......................... 31
</TABLE>
<TABLE>
<CAPTION>
ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION,
REGISTRATION AND EXCHANGE OF NOTES
<S> <C> <C>
SECTION 2.01. Form, Date and Denomination of Notes........... 32
SECTION 2.02. Payments of Interest........................... 33
SECTION 2.03. Restrictive Legends............................ 34
SECTION 2.04. Execution and Authentication................... 38
SECTION 2.05. Registrar and Paying Agent..................... 39
SECTION 2.06. Paying Agent to Hold Money in Trust............ 39
SECTION 2.07. Transfer and Exchange.......................... 40
SECTION 2.08. Book-Entry Provisions for Global Notes......... 41
SECTION 2.09. Special Transfer Provisions.................... 43
SECTION 2.10. Mutilated, Destroyed, Lost or Stolen Notes..... 46
SECTION 2.11. Temporary Notes................................ 46
SECTION 2.12. Cancellation of Notes Paid, Etc................ 47
SECTION 2.13. CUSIP Numbers.................................. 47
</TABLE>
- ---------------------------
/S/ This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
<PAGE>
ii Page
----
ARTICLE THREE
<TABLE>
<CAPTION>
REDEMPTION OF NOTES
<S> <C> <C>
SECTION 3.01. Redemption Prices.......................................... 47
SECTION 3.02. Notice to Trustee.......................................... 48
SECTION 3.03. Notice of Redemption; Selection of Notes................... 48
SECTION 3.04. Payment of Notes Called for Redemption..................... 49
SECTION 3.05. No Sinking Fund............................................ 50
SECTION 3.06. Conversion Arrangement on Call for Redemption.............. 50
</TABLE>
ARTICLE FOUR
<TABLE>
<CAPTION>
SUBORDINATION OF NOTES
<S> <C> <C>
SECTION 4.01. Securities Subordinated to Senior Indebtedness............. 51
SECTION 4.02. No Payment on Notes in Certain Circumstances............... 51
SECTION 4.03. Payment over of Proceeds upon Dissolution, Etc............. 52
SECTION 4.04. Subrogation................................................ 54
SECTION 4.05. Obligations of Company Unconditional....................... 54
SECTION 4.06. Notice to Trustee.......................................... 55
SECTION 4.07. Reliance on Judicial Order or Certificate of Liquidating
Agent..................................................... 56
SECTION 4.08. Trustee's Relation to Senior Indebtedness.................. 56
SECTION 4.09. Subordination Rights Not Impaired by Acts or Omissions of
the Company or Holders of the Senior Indebtedness......... 56
SECTION 4.10. Noteholders Authorize Trustee to Effectuate Subordination
of Notes.................................................. 56
SECTION 4.11. Not to Prevent Event of Default............................ 57
SECTION 4.12. Trustee's Compensation Not Prejudiced...................... 57
SECTION 4.13. No Waiver of Subordination................................. 57
SECTION 4.14. Payments May Be Paid Prior to Dissolution.................. 57
SECTION 4.15. Consent of Holders of Senior Indebtedness Under the
U.S. Credit Agreement..................................... 58
</TABLE>
ARTICLE FIVE
<TABLE>
<CAPTION>
PARTICULAR COVENANTS OF THE COMPANY
<S> <C> <C>
SECTION 5.01. Payment of Principal, Premium and Interest................. 58
SECTION 5.02. Offices for Notices and Payments, Etc...................... 58
SECTION 5.03. Appointments to Fill Vacancies in Trustee's Office......... 59
</TABLE>
<PAGE>
iii Page
----
<TABLE>
<S> <C> <C>
SECTION 5.04. Provision as to Paying Agent........................ 59
SECTION 5.05. Limitation on Senior Subordinated Indebtedness...... 60
SECTION 5.06. Calculation of Original Issue Discount.............. 61
SECTION 5.07. Notice of Defaults.................................. 61
SECTION 5.08. Compliance Certificates............................. 61
</TABLE>
ARTICLE SIX
<TABLE>
<CAPTION>
NOTEHOLDERS' LISTS AND
REPORTS BY THE COMPANY AND THE TRUSTEE
<S> <C> <C>
SECTION 6.01. Noteholders' Lists.................................. 61
SECTION 6.02. Preservation of Lists............................... 61
</TABLE>
ARTICLE SEVEN
<TABLE>
<CAPTION>
REMEDIES OF THE TRUSTEE AND
NOTEHOLDERS IN THE EVENT OF DEFAULT
<S> <C> <C>
SECTION 7.01. Events of Default................................... 62
SECTION 7.02. Payment of Notes on Default; Suit Therefor.......... 64
SECTION 7.03. Application of Monies Collected by Trustee.......... 66
SECTION 7.04. Proceedings by Noteholder........................... 67
SECTION 7.05. Proceedings by Trustee.............................. 68
SECTION 7.06. Remedies Cumulative and Continuing.................. 68
SECTION 7.07. Direction of Proceedings and Waiver of Defaults by
Majority Noteholders............................... 69
SECTION 7.08. Notice of Defaults.................................. 69
SECTION 7.09. Undertaking to Pay Costs............................ 70
</TABLE>
ARTICLE EIGHT
<TABLE>
<CAPTION>
CONCERNING THE TRUSTEE
<S> <C> <C>
SECTION 8.01. Duties and Responsibilities of Trustee.............. 70
SECTION 8.02. Reliance on Documents, Opinions, Etc................ 72
SECTION 8.03. No Responsibility for Recitals, Etc................. 73
SECTION 8.04. Trustee, Paying Agents, Conversion Agents or
Registrar May Own Notes............................. 73
SECTION 8.05. Monies to Be Held in Trust.......................... 73
SECTION 8.06. Compensation and Expenses of Truste................. 73
</TABLE>
<PAGE>
iv Page
----
<TABLE>
<S> <C> <C>
SECTION 8.07. Officers' Certificate as Evidence....................... 74
SECTION 8.08. Eligibility of Trustee.................................. 74
SECTION 8.09. Resignation or Removal of Trustee....................... 74
SECTION 8.10. Acceptance by Successor Trustee......................... 76
SECTION 8.11. Succession by Merger, Etc............................... 76
</TABLE>
ARTICLE NINE
<TABLE>
<CAPTION>
CONCERNING THE NOTEHOLDERS
<S> <C> <C>
SECTION 9.01. Action by Noteholders................................... 77
SECTION 9.02. Proof of Execution by Noteholders....................... 77
SECTION 9.03. Persons Who Are Deemed Absolute Owners.................. 78
SECTION 9.04. Company-Owned Notes Disregarded......................... 78
SECTION 9.05. Revocation of Consents; Future Holders Bound............ 78
</TABLE>
ARTICLE TEN
<TABLE>
<CAPTION>
NOTEHOLDERS' MEETINGS
<S> <C> <C>
SECTION 10.01. Purposes of Meetings................................... 79
SECTION 10.02. Call of Meetings by Trustee............................ 79
SECTION 10.03. Call of Meetings by Company or Noteholders............. 80
SECTION 10.04. Qualifications for Voting.............................. 80
SECTION 10.05. Regulations............................................ 80
SECTION 10.06. Voting................................................. 81
SECTION 10.07. No Delay of Rights by Meeting.......................... 81
</TABLE>
ARTICLE ELEVEN
<TABLE>
<CAPTION>
SUPPLEMENTAL INDENTURES
<S> <C> <C>
SECTION 11.01. Without Consent of Noteholders......................... 81
SECTION 11.02. With Consent of Noteholders............................ 82
SECTION 11.03. Revocation and Effect of Consent....................... 83
SECTION 11.04. Notation on or Exchange of Notes....................... 84
SECTION 11.05. Trustee to Sign Amendments, Etc........................ 84
</TABLE>
<PAGE>
v Page
----
ARTICLE TWELVE
<TABLE>
<CAPTION>
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
<S> <C> <C>
SECTION 12.01. Company May Consolidate, Etc., on Certain Terms........ 84
SECTION 12.02. Successor Corporation to Be Substituted................ 85
SECTION 12.03. Opinion of Counsel to Be Given Trustee................. 85
</TABLE>
ARTICLE THIRTEEN
<TABLE>
<CAPTION>
SATISFACTION AND DISCHARGE OF INDENTURE
<S> <C>
SECTION 13.01. Discharge of Indenture................................. 85
SECTION 13.02. Deposited Monies to Be Held in Trust by Trustee........ 86
SECTION 13.03. Paying Agent to Repay Monies Held...................... 86
SECTION 13.04. Return of Unclaimed Monies............................. 87
</TABLE>
ARTICLE FOURTEEN
<TABLE>
<CAPTION>
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
<S> <C> <C>
SECTION 14.01. Indenture and Notes Solely Corporate Obligations....... 87
</TABLE>
ARTICLE FIFTEEN
<TABLE>
<CAPTION>
CONVERSION OF NOTES
<S> <C> <C>
SECTION 15.01. Right to Convert....................................... 87
SECTION 15.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or
Dividends............................................. 88
SECTION 15.03. Cash Payments in Lieu of Fractional Shares............. 90
SECTION 15.04. Conversion Rate........................................ 90
SECTION 15.05. Adjustment of Conversion Rate.......................... 90
SECTION 15.06. Effect of Reclassification, Consolidation, Merger or
Sale 98 SECTION 15.07. Taxes on Shares Issued......... 98
SECTION 15.08. Reservation of Shares; Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of
Common Stock.......................................... 99
SECTION 15.09. Responsibility of Trustee.............................. 99
SECTION 15.10. Notice to Holders Prior to Certain Actions............. 100
SECTION 15.11. Simultaneous Adjustments............................... 101
</TABLE>
<PAGE>
INDENTURE dated as of December 15, 1995 between EXIDE CORPORATION, a
Delaware corporation (the "Company"), and THE BANK OF NEW YORK, a New York State
banking corporation, as trustee hereunder (the "Trustee").
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issue of its 2.90% Convertible Senior Subordinated Notes due 2005 (the
"Notes"), in an aggregate principal amount at maturity not to exceed
$397,900,000 and, to provide the terms and conditions upon which the Notes are
to be authenticated, issued and delivered, the Company has duly authorized the
execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, the form of conversion notice, the form of assignment, and the form of
option to elect redemption upon a Fundamental Change are to be substantially in
the following forms, respectively:
[FORM OF FACE OF NOTE]
FORM OF LEGEND FOR GLOBAL NOTE: UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.09 OF THE INDENTURE.
<PAGE>
2
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THIS NOTE BEARS ORIGINAL
ISSUE DISCOUNT. THE ISSUE PRICE WITH RESPECT TO EACH $1,000 OF PRINCIPAL
AMOUNT AT MATURITY OF THIS NOTE IS $__________, THE AMOUNT OF ORIGINAL
ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF PRINCIPAL AMOUNT AT MATURITY
OF THIS NOTE IS $__________, THE ISSUE DATE IS __________ AND THE YIELD TO
MATURITY BASED ON SEMIANNUAL COMPOUNDING IS 6.75%. THE NOTE EVIDENCED
HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES
LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES
OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER
THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS
NOT A U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
NOTE EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH
NOTE WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k) (TAKING INTO ACCOUNT
THE PROVISIONS OF RULE 144(d) IN THE CASE OF SUCH STOCK) EXCEPT (A) TO
EXIDE CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES
TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY AND SUCH COMMON STOCK
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN THE TIME PERIOD REFERRED TO IN
RULE 144(k), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
<PAGE>
3
ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE OR THE COMPANY, SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF SUCH TIME PERIOD.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Exide Corporation
2.90% CONVERTIBLE SENIOR SUBORDINATED NOTE DUE 2005
No. __ $__________
[CUSIP] [CINS] ______
Exide Corporation, a corporation duly organized and validly existing
under the laws of the State of Delaware (the "Company," which term includes any
successor corporation under the Indenture referred to on the reverse hereof),
for value received hereby promises to pay to _________ or registered assigns,
the principal sum of _______________ ($__________) on December 15, 2005 at the
office or agency of the Company maintained for that purpose in the Borough of
Manhattan, The City of New York, in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts, and to pay interest, semi-annually on June 15 and
December 15 of each year, commencing June 15, 1996 on said principal sum at said
office or agency, in like coin or currency, at the rate per annum of 2.90% of
the principal amount at maturity of this Note from the June 15 or the December
15, as the case may be, next preceding the date to which interest has been paid
or duly provided for, unless the date hereof is a date to which interest has
been paid or duly provided for, in which case from the date of this Note, or
unless no interest has been paid or duly provided for on the Notes, in which
case from __________ until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after any
June 1 or December 1, as the case may be, and before the following June 15 or
December 15, this Note shall bear interest from such June 15 or December 15;
provided, however, that if the Company shall default in the payment of interest
- -------- -------
due on such June 15 or December 15, then
<PAGE>
this Note shall bear interest from the next preceding June 15 or December 15 to
which interest has been paid or duly provided for or, if no interest has been
paid or duly provided for on the Notes, from __________. The interest so
payable on any June 15 or December 15 will be paid to the Person in whose name
this Note (or one or more Predecessor Notes) is registered at the close of
business on the record date, which shall be the June 1 or December 1 (whether or
not a Business Day, as defined in the Indenture) next preceding such June 15 or
December 15, provided that any such interest not punctually paid or duly
--------
provided for shall be payable as provided in the Indenture. Interest may, at
the option of the Company, be paid by check mailed to the registered address of
such Person, provided that a holder of Notes with an aggregate principal amount
at maturity in excess of $5 million will be paid by wire transfer in immediately
available funds, at the election of, and upon proper notification of wire
instructions by, such holder.
The aggregate principal amount of the Note in global form represented
hereby may from time to time be reduced or increased to reflect exchanges of a
part of this Note in global form for definitive Notes or exchanges of definitive
Notes for a part of this Note in global form or conversions or redemptions of a
part of this Note in global form or cancellations of a part of this Note in
global form or transfers of definitive Notes in return for a part of this Note
in global form or transfers of a part of this Note in global form effected by
delivery of definitive Notes, in each case, and in any such case, by means of
notations on Schedule A hereto of changes to principal amount. Notwithstanding
any provision of this Note to the contrary, (i) exchanges of a part of this Note
in global form for definitive Notes, (ii) exchanges of definitive Notes for a
part of this Note in global form, (iii) conversions or redemptions of a part of
this Note in global form, (iv) cancellations of a part of this Note in global
form, (v) transfers of definitive Notes in return for a part of this Note in
global form and (vi) transfers of a part of this Note in global form effected by
delivery of definitive Notes may be effected without the surrendering of this
Note in global form, provided that appropriate notations on Schedule A hereto
--------
(Changes to Principal Amount of the Global Security) are made by the Trustee, or
the Custodian at the direction of the Trustee, to reflect the appropriate
reduction or increase, as the case may be, in the aggregate principal amount of
this Note in global form resulting therefrom or as a consequence thereof.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price and interest in
respect of the Notes to the prior payment in full of all Senior Indebtedness as
defined in the Indenture and provisions giving the holder of this Note the right
to convert this Note into Common Stock of the Company on the terms and subject
to the limitations referred to on the reverse hereof and as more fully specified
in the Indenture. Such further provisions shall for all purposes have the same
effect as though fully set forth at this place.
<PAGE>
5
This Note shall be governed by the laws of the State of New York.
This Note shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee under the Indenture.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
EXIDE CORPORATION
By:
-----------------------------------------------
Title:
By:
-----------------------------------------------
Title:
<PAGE>
6
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 2.90% Convertible Senior Subordinated Notes
described in the within- mentioned Indenture.
Dated: ____________, ____ THE BANK OF NEW YORK, as Trustee
By:
-----------------------------------------
Authorized Signatory
<PAGE>
7
[FORM OF REVERSE OF NOTE]
EXIDE CORPORATION
2.90% Convertible Senior Subordinated Note
due 2005
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 2.90% Convertible Senior Subordinated Notes due 2005 (herein
called the "Notes"), limited to the aggregate principal amount at maturity of
$397,900,000 all issued under and pursuant to an Indenture dated as of December
15, 1995 (herein called the "Indenture"), between the Company and The Bank of
New York (herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the Issue Price, and accrued Original Issue Discount
and accrued interest, if any, through the date of declaration on all Notes may
be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount at maturity of the Notes at the time outstanding,
evidenced as in the Indenture provided, to execute supplemental indentures
adding any provisions to or changing in any manner or eliminating any of the
provisions of the Indenture or of any supplemental indenture or modifying in any
manner the rights of the holders of the Notes; provided, however, that, as
-------- -------
provided in the Indenture, no such supplemental indenture shall (i) affect
certain matters, without the consent of the holder of each Note so affected or
(ii) reduce the aforesaid percentage of Notes, the holders of which are required
to consent to any such supplemental indenture, without the consent of the
holders of all Notes then outstanding. It is also provided in the Indenture
that, prior to any declaration accelerating the maturity of the Notes, the
holders of a majority in aggregate principal amount at maturity of the Notes at
the time outstanding may on behalf of the holders of all of the Notes waive any
past default or Event of Default under the Indenture and its consequences except
a default in the payment of principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change Redemption Price
or interest in respect of any of the Notes or a failure by the Company to
convert any Notes into Common Stock of the Company. Any such consent or waiver
by the holder of this Note (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
<PAGE>
8
owners of this Note and any Notes which may be issued in exchange or
substitution herefor, irrespective of whether or not any notation thereof is
made upon this Note or such other Notes.
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company
as defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Note, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price and interest in respect of this Note at the place, at the
respective times, at the rate and in the coin or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year
of twelve 30-day months. Accrual of Original Issue Discount shall be calculated
on the basis of a 360-day year of twelve 30-day months, compounded semi-
annually.
The Notes are issuable in registered form without coupons in
denominations of $1,000 principal amount at maturity and any integral multiple
thereof. At the office or agency of the Company referred to on the face hereof,
and in the manner and subject to the limitations provided in the Indenture, but
without payment of any service charge (but with the payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed upon any
registration or exchange of Notes), Notes may be exchanged for a like aggregate
principal amount at maturity of Notes of other authorized denominations.
The Company may not redeem the Notes prior to December 15, 1998. On
or after that date, the Company may, at its option, redeem the Notes as a whole,
or from time to time in part, on any date prior to maturity, upon mailing a
notice of such redemption not less than thirty nor more than sixty days before
the date fixed for redemption to the holders of Notes at their last registered
addresses, all as provided in the Indenture, at the following Redemption Prices
per $1,000 principal amount at maturity (which prices reflect accrued Original
Issue Discount calculated to each such date), together in each case with accrued
interest to the date fixed for redemption. The Redemption Price of a Note
redeemed between
<PAGE>
9
such dates will include an additional amount reflecting the additional Original
Issue Discount accrued since the next preceding date in the table to the actual
Redemption Date.
<TABLE>
<CAPTION>
(1) (2) (3)
Note Accrued Original Redemption Price
Redemption Date Issue Price Issue Discount (1) + (2)
--------------- ----------- -------------- --------
<S> <C> <C> <C>
December 15, 1998 723.29 67.72 788.01
December 15, 1999 723.29 89.31 812.60
December 15, 2000 723.29 115.60 838.89
December 15, 2001 723.29 143.69 866.98
December 15, 2002 723.29 173.71 897.00
December 15, 2003 723.29 205.79 929.08
December 15, 2004 723.29 240.07 963.36
At stated maturity 723.29 276.71 1,000.00
</TABLE>
Notwithstanding the foregoing, if the date fixed for redemption is a June 15 or
December 15, then the interest payable on such date shall be paid to the holder
of record on the next preceding June 1 or December 1.
The Notes are not subject to redemption through the operation of any
sinking fund.
If a Fundamental Change (as defined in the Indenture) occurs at any
time prior to December 15, 2005, each holder of Notes shall have the right, at
such holder's option, to require the Company to redeem all or any part of such
holder's Notes on the date (the "Fundamental Change Redemption Date") (or if
such date is not a Business Day, the next succeeding Business Day) that is 45
days after the date of the Company's notice of such Fundamental Change. Such
redemption shall be made on the Fundamental Change Redemption Date at a price
(the "Fundamental Change Redemption Price") equal to the Issue Price plus
accrued Original Issue Discount to the Fundamental Change Redemption Date;
provided that, if the Applicable Price (as defined in the Indenture) is less
- --------
than the Reference Market Price (as defined in the Indenture), the Company shall
redeem such Notes at a price equal to the foregoing redemption price multiplied
by the fraction obtained by dividing the Applicable Price by the Reference
Market Price. In each case, the Company shall also pay accrued interest, if
any, on such Notes to the Fundamental Change Redemption Date; provided that if
--------
such Fundamental Change Redemption Date is a June 15 or December 15, then the
interest payable on such date shall be paid to the holder of record of the Note
on the next preceding June 1 or December 1. The Company shall mail to the
Trustee and to all
<PAGE>
10
holders of record of the Notes a notice of the occurrence of a Fundamental
Change and of the redemption right arising as a result thereof on or before the
tenth day after the occurrence of such Fundamental Change. For a Note to be so
repaid at the option of the holder, the Company must receive at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York such Note with the form entitled "Option to Elect
Redemption Upon a Fundamental Change" on the reverse thereof duly completed,
together with such Notes duly endorsed for transfer, on or before the 30th day
after the date of such notice (or if such 30th day is not a Business Day, the
immediately preceding Business Day). All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Note for
redemption shall be determined by the Company, whose determination shall be
final and binding.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after 60 days following the latest date of
original issuance of any of the Notes through the close of business on December
15, 2005, or, as to all or any portion hereof called for redemption, prior to
the close of business on the Business Day immediately preceding the date fixed
for redemption (unless the Company shall default in payment due upon redemption
thereof), to convert the principal hereof or any portion of such principal which
is $1,000 principal amount at maturity or an integral multiple thereof, into
that number of fully paid and nonassessable shares of the Company's Common
Stock, as said shares shall be constituted at the date of conversion, obtained
by dividing the principal amount at maturity of this Note or portion thereof to
be converted by $1,000 and multiplying the result so obtained by 12.5473 (the
"Conversion Rate") or such Conversion Rate as adjusted from time to time as
provided in the Indenture, upon surrender of this Note, together with a
conversion notice attached hereto, to the Company at the office or agency of the
Company maintained for that purpose in the Borough of Manhattan, The City of New
York, and, unless the shares issuable on conversion are to be issued in the same
name as this Note, duly endorsed by, or accompanied by instruments of transfer
in form satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney. No adjustments in respect of accrued Original Issue
Discount, interest or dividends will be made upon any conversion; provided,
--------
however, that if this Note shall be surrendered for conversion during the period
- -------
from the close of business on any record date for the payment of interest to the
opening of business on the following interest payment date, this Note (unless it
or the portion being converted shall have been called for redemption during the
period from the close of business on any record date for the payment of interest
to the close of business on the following interest payment date) must be
accompanied by an amount, in New York Clearing House funds, equal to the
interest payable on such interest payment date on the principal amount at
maturity being converted. A holder who would otherwise be entitled to a
fractional share of Common Stock shall, at the election of the Company, receive
either an additional share of Common Stock or cash equal to the then current
market value of such fractional share.
<PAGE>
11
Any Notes called for redemption, unless surrendered for conversion on
or before the close of business on the Business Day immediately preceding the
date fixed for redemption, may be deemed to be purchased from the holder of such
Notes at an amount equal to the applicable Redemption Price, together with
accrued interest to the date fixed for redemption, by one or more investment
bankers or other purchasers who may agree with the Company to purchase such
Notes from the holders thereof and convert them into Common Stock of the Company
and to make payment for such Notes as aforesaid to the Trustee in trust for such
holders in accordance with Section 3.06.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, a new Note or Notes of authorized denominations for an equal aggregate
principal amount at maturity will be issued to the transferee in exchange
herefor, subject to the limitations provided in the Indenture, without charge
except for any tax or other governmental charge imposed in connection therewith.
The Company, the Trustee, any Paying Agent, any conversion agent and
any Registrar may deem and treat the registered holder hereof as the absolute
owner of this Note (whether or not this Note shall be overdue and
notwithstanding any notation of ownership or other writing hereon made by anyone
other than the Company or any Registrar), for the purpose of receiving payment
hereof, or on account hereof, for the conversion hereof and for all other
purposes, and neither the Company nor the Trustee nor any other Paying Agent nor
any other conversion agent nor any Registrar shall be affected by any notice to
the contrary. All payments made to or upon the order of such registered holder
shall, to the extent of the sum or sums paid, satisfy and discharge liability
for monies payable on this Note.
No recourse for the payment of the principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price or interest in respect of this Note, or for any claim based
hereon or otherwise in respect hereof, and no recourse under or upon any
obligation, covenant or agreement of the Company in the Indenture or any
indenture supplemental thereto or in any Note, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation, either directly or through the Company
or any successor corporation, whether by virtue of any constitution, statute or
rule of law or by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
Unless otherwise defined herein, terms used in this Note have the
definitions ascribed to them in the Indenture. To the extent permitted by
applicable law, in the event of
<PAGE>
12
any inconsistency between the terms of this Note and the terms of the Indenture,
the terms of the Indenture shall control.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in UNIF GIFT MIN ACT --
common
TEN ENT -- as tenants by the ________________ Custodian
entireties (Cust)
JT TEN -- as joint tenants ___________________ under
with right of survivorship and (Minor)
not as tenants in common
Uniform Gifts to Minors Act
__________________(State)
Additional abbreviations may also be used
though not in the above list.
<PAGE>
13
CONVERSION NOTICE
To: Exide Corporation
The undersigned registered holder of this Note hereby irrevocably
exercises the option to convert this Note, or portion hereof (which is $1,000
principal amount at maturity or an integral multiple thereof) below designated,
into shares of Common Stock of Exide Corporation (or such other securities as
may be provided for in the Indenture) in accordance with the terms of the
Indenture referred to in this Note, and directs that the shares issuable and
deliverable upon the conversion, together with any check in payment for
fractional shares and any Notes representing any unconverted principal amount at
maturity hereof, be issued and delivered to the registered holder hereof unless
a different name has been indicated below. If shares or any portion of this
Note not converted are to be issued in the name of a Person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Note.
Sign exactly as name appears on the other
side of the Note:
Dated: ---------------------------------------------
---------------------------------------------
Signature(s)
<PAGE>
14
Fill in for registration of shares of
Common Stock and Notes to be
issued other than to and in the name of
the registered holder:
- ---------------------------
(Name)
- ---------------------------
(Street Address)
- ---------------------------
(City, State and Zip Code)
Please print name and address
Principal amount at maturity to be converted (if less
than all):
$_____,000
------------------------------
Social Security or Other
Taxpayer Identification Number
<PAGE>
15
ASSIGNMENT
For value received __________________________________ hereby sell(s), assign(s)
and transfer(s) unto ________________________________
(Please insert name and social security or other
taxpayer identification number of
assignee)
the within Note and hereby irrevocably constitutes and appoints _______________
attorney to transfer the said Note on the books of the Company, with full power
of substitution in the premises.
In connection with any transfer of the within Note occurring within the time
period referred to in Rule 144(k) under the Securities Act as it applies to such
transfer, the undersigned confirms that, without using any general solicitation
or general advertising, such Note is being transferred:
[ ] (A) To Exide Corporation or a subsidiary thereof; or
[ ] (B) Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
[ ] (C) To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended, and in compliance with
the provisions of Section 2.09(f) of the Indenture, and that a
certificate in the for of Exhibit C to the Indenture is being
furnished to the Trustee; or
[ ] (D) Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
[ ] (E) Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended.
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate"):
[ ] The transferee is an Affiliate of the Company.
<PAGE>
16
Dated:_____________________
____________________________
Signature(s)
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Note in every particular without alteration
or enlargement or any change whatever.
TO BE COMPLETED BY PURCHASER IF (B) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:___________________ _______________________________________________
NOTICE: To be executed by an executive officer
<PAGE>
17
OPTION TO ELECT REDEMPTION
UPON A FUNDAMENTAL CHANGE
To: Exide Corporation
The undersigned registered holder of this Note hereby irrevocably
acknowledges receipt of a notice from Exide Corporation (the "Company") as to
the occurrence of a Fundamental Change with respect to the Company and requests
and instructs the Company to redeem this Note, or portion hereof (which is
$1,000 principal amount at maturity or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Note, at the Fundamental Change Redemption Price together with accrued interest
to such date, to the registered holder hereof.
Principal amount at maturity to be redeemed (if
less than all):
$_____,000
Dated:______________________
_________________________________
_________________________________
Signature(s)
_________________________________
Social Security or Other
Taxpayer Identification Number
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Note in every particular without alteration
or enlargement or any change whatever.
<PAGE>
18
Schedule A
<TABLE>
<CAPTION>
Changes to Principal Amount of Global Security
Principal Amount of
Securities by Which This
Global Security Is to Be
Reduced or Increased, and
Reason for Reduction or Remaining Principal Amount Notation
Date Increase of This Global Security Made by
- --------- -------------------------- ---------------------------- ----------
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
- --------- -------------------------- ---------------------------- ----------
- --------------------------------------------------------------------------------
- --------- -------------------------- ---------------------------- ----------
- --------------------------------------------------------------------------------
- --------- -------------------------- ---------------------------- ----------
- --------------------------------------------------------------------------------
- --------- -------------------------- ---------------------------- ----------
- --------------------------------------------------------------------------------
- --------- -------------------------- ---------------------------- ----------
- --------------------------------------------------------------------------------
- --------- -------------------------- ---------------------------- ----------
- --------------------------------------------------------------------------------
- --------- -------------------------- ---------------------------- ----------
- --------------------------------------------------------------------------------
- --------- -------------------------- ---------------------------- ----------
- --------------------------------------------------------------------------------
================================================================================
</TABLE>
<PAGE>
19
AND WHEREAS, all acts and things necessary to make the Notes, when
executed by the Company and authenticated and delivered by the Trustee, as in
this Indenture provided, the valid, binding and legal obligations of the
Company, and to constitute these presents a valid agreement according to its
terms, have been done and performed, and the execution of this Indenture and the
issue hereunder of the Notes have in all respects been duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Definitions.
-----------
Affiliate: The term "Affiliate" with respect to any specified Person,
---------
means any other Person directly or indirectly controlling, controlled by or
under direct or indirect common control with, such specified Person. For the
purposes of this definition, "control" (including, with correlative meanings,
the terms "controlling," and "controlled by"), when used with respect to any
specified Person, means the power to direct or cause the direction of the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise.
Agent: The term "Agent" means any conversion agent, Registrar, Paying
-----
Agent, authenticating agent or co-Registrar.
Agent Members: The term "Agent Members" has the meaning provided in
-------------
Section 2.08.
Applicable Price: The term "Applicable Price" means (i) in the event
----------------
of a Fundamental Change in which the holders of the Common Stock receive only
cash, the amount of cash received by the holder of one share of Common Stock and
(ii) in the event of any other Fundamental Change, the average of the last
reported sale price for the Common Stock (determined as set forth in subsection
(f) of Section 15.05) during the ten Trading Days (as defined in subsection (f)
of Section 15.05) prior to the record date for the
<PAGE>
20
determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Fundamental Change,
or, if there is no such record date, the date upon which the holders of Common
Stock shall have the right to receive such cash, securities, property or other
assets in connection with the Fundamental Change.
Board of Directors: The term "Board of Directors" means the Board of
------------------
Directors of the Company or a committee of such Board duly authorized to act for
it hereunder.
Business Day: The term "Business Day" means a day, other than a
------------
Saturday, a Sunday or other day, on which commercial banks located in The City
of New York, or in the City of the Principal Office of the Trustee, are
authorized by law to close.
Commission: The term "Commission" means the Securities and Exchange
----------
Commission, as from time to time constituted, created under the Exchange Act or,
if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
Commodity Agreement: The term "Commodity Agreement" means any
-------------------
agreement or arrangement designed to protect the Company or any of its
subsidiaries against fluctuations in the prices of commodities used by the
Company or any of its subsidiaries in the ordinary course of its business and
entered into with any bank.
Common Stock: The term "Common Stock" means any stock of any class of
------------
the Company which has no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which is not subject to redemption by the Company.
Subject to the provisions of Section 15.06, however, shares issuable on
conversion of Notes shall include only shares of Common Stock, $.01 par value
per share (which is the class designated as Common Stock of the Company at the
date of this Indenture), or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
--------
shall be more than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion to which the total number
of shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
Company: The term "Company" means Exide Corporation, a Delaware
-------
corporation, and subject to the provisions of Article Twelve shall include its
successors and assigns.
<PAGE>
21
Conversion Rate: The term "Conversion Rate" has the meaning provided
---------------
in Section 15.04.
Conversion Shares: The term "Conversion Shares" means shares of
-----------------
Common Stock of the Company issuable upon conversion of a Note.
Currency Agreement: The term "Currency Agreement" means any foreign
------------------
exchange contract, currency swap agreement or other similar agreement or
arrangement designed to protect the Company or any of its subsidiaries against
fluctuations in currency values to or under which the Company or any of its
subsidiaries is a party or a beneficiary on the date of this Indenture or
becomes a party or a beneficiary hereafter.
Defaulted Interest: The term "Defaulted Interest" has the meaning
------------------
provided in Section 2.02.
Depositary: The term "Depositary" means The Depository Trust Company,
----------
its nominees and their respective successors.
Event of Default: The term "Event of Default" means any event
----------------
specified in Section 7.01, continued for the period of time, if any, and after
the giving of the notice, if any, therein designated.
Exchange Act: The term "Exchange Act" means the Securities Exchange
------------
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Expiration Time: The term "Expiration Time" has the meaning provided
---------------
for in Section 15.05(l).
Fundamental Change: The term "Fundamental Change" means the
------------------
occurrence of any transaction or event in connection with which all or
substantially all of the Common Stock shall be exchanged for, converted into,
acquired for or constitute the right to receive consideration (whether by means
of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) which is not all
or substantially all common stock listed (or, upon consummation of or
immediately following such transaction or event, which will be listed) on a
United States national securities exchange or approved for quotation on the
Nasdaq National Market or any similar United States system of automated
dissemination of quotations of securities prices.
Fundamental Change Redemption Date: The term "Fundamental Change
----------------------------------
Redemption Date" has the meaning provided in Section 16.01(a).
<PAGE>
22
Fundamental Change Redemption Notice: The term "Fundamental Change
------------------------------------
Redemption Notice" has the meaning provided in Section 16.01(b).
Fundamental Change Redemption Price: The term "Fundamental Change
-----------------------------------
Redemption Price" has the meaning provided in Section 16.01(a).
Global Notes: The term "Global Notes" has the meaning provided in
------------
Section 2.01.
Guarantee: The term "Guarantee" means any obligation, contingent or
---------
otherwise, of any Person directly or indirectly guaranteeing any Indebtedness or
other obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other obligation of such other Person (whether
arising by virtue of partnership arrangements, or by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for purposes
of assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment thereof or to protect such obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided that the term "Guarantee" shall not include endorsements for
--------
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
Incur: The term "Incur" means, with respect to any Indebtedness, to
-----
incur, create, issue, assume, Guarantee or otherwise become liable for or with
respect to, or become responsible for, the payment of, contingently or
otherwise, such Indebtedness; provided that neither the accrual of interest
--------
(whether such interest is payable in cash or kind) nor the accretion of original
issue discount shall be considered an Incurrence of Indebtedness.
Indebtedness: The term "Indebtedness" means, with respect to any
------------
Person at any date of determination (without duplication), (i) all indebtedness
of such Person for borrowed money, (ii) all obligations of such Person evidenced
by bonds, debentures, notes or other similar instruments, (iii) all obligations
of such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto), (iv) all obligations
of such Person to pay the deferred and unpaid purchase price of property or
services, which purchase price is due more than six months after the date of
placing such property in service or taking delivery and title thereto or the
completion of such services, except Trade Payables, (v) all obligations of such
Person as lessee under capitalized leases, (vi) all Indebtedness of other
Persons secured by a lien on any asset of such Person, whether or not such
Indebtedness is assumed by such Person; provided that the amount of such
--------
Indebtedness shall be the lesser of (A) the fair market value of such asset at
such date of determination and (B) the amount of such Indebtedness, (vii) all
Indebtedness of other
<PAGE>
23
Persons Guaranteed by such Person to the extent such Indebtedness is Guaranteed
by such Person, (viii) all obligations in respect of borrowed money under the
U.S. Credit Agreement and any Guarantees thereof and (ix) to the extent not
otherwise included in this definition, obligations under Currency Agreements,
Interest Rate Agreements and Commodity Agreements. The amount of Indebtedness
of any Person at any date shall be the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations at such date; provided that the amount outstanding at any time of
--------
any Indebtedness issued with original issue discount is the face amount of such
Indebtedness less the remaining unamortized portion of the original issue
discount of such Indebtedness at such time as determined in conformity with
generally accepted accounting principles.
Indenture: The term "Indenture" means this instrument as originally
---------
executed or, if amended or supplemented as herein provided, as so amended or
supplemented.
Institutional Accredited Investor: The term "Institutional Accredited
---------------------------------
Investor" means an institution that is an "accredited investor" as that term is
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities
Act.
Interest Rate Agreement: The term "Interest Rate Agreement" means any
-----------------------
interest rate protection agreement, interest rate future agreement, interest
rate option agreement, interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedge agreement or
other similar agreement or arrangement designed to protect the Company or any of
its subsidiaries against fluctuations in interest rates to or under which the
Company or any of its subsidiaries is a party or a beneficiary on the date of
this Indenture or becomes a party or a beneficiary hereafter.
Issue Price: The term "Issue Price" means with respect to any Note
-----------
(or any portion thereof), 72.329% of the principal amount at maturity of such
Note (or such portion thereof).
Legal Holiday: The term "Legal Holiday" has the meaning provided in
-------------
Section 17.06.
Nasdaq National Market: The term "Nasdaq National Market" means the
----------------------
electronic inter-dealer quotation system operated by Nasdaq, Inc., a subsidiary
of the National Association of Securities Dealers, Inc.
Non-U.S. Person: The term "Non-U.S. Person" means a person who is not
---------------
a U.S. Person under Regulation S.
<PAGE>
24
Note or Notes: The term "Note" or "Notes" means any Note or Notes, as
-------------
the case may be, authenticated and delivered under this Indenture.
Noteholder: The term "Noteholder" or "holder of Notes," or other
----------
similar terms, means any person in whose name at the time a particular Note is
registered on the books of the Company kept for that purpose in accordance with
the terms hereof.
Officers' Certificate: The term "Officers' Certificate," when used
---------------------
with respect to the Company, means a certificate signed both (a) by its Chairman
of the Board of Directors, or any Vice-Chairman of the Board of Directors, or
its President or any Vice President (whether or not designated by a number or
numbers or a word or words added before or after the title "Vice President") and
(b) by its Treasurer, or Controller, or Secretary or any Assistant Secretary.
Offshore Global Note: The term "Offshore Global Note" has the meaning
--------------------
provided in Section 2.01.
Offshore Physical Notes: The term "Offshore Physical Notes" has the
-----------------------
meaning provided in Section 2.01.
Opinion of Counsel: The term "Opinion of Counsel" means an opinion in
------------------
writing signed by legal counsel, who may be an employee of or counsel to the
Company or other counsel acceptable to the Trustee.
Original Issue Discount: The term "Original Issue Discount" of any
-----------------------
Note means the difference between the Issue Price and the principal amount at
maturity of the Note as set forth on the face of the Note. For purposes of this
Indenture and the Notes, accrual of Original Issue Discount shall be calculated
on the basis of a 360-day year of twelve 30-day months, on a semi-annual bond
equivalent basis.
outstanding: The term "outstanding," when used with reference to
-----------
Notes, subject to the provisions of Section 9.04, means, as of any particular
time, all Notes authenticated and delivered by the Trustee under this Indenture,
except
(a) Notes theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Notes, or portions thereof, for the payment or redemption of which
monies in the necessary amount shall have been deposited in trust with the
Trustee or with any Paying Agent (other than the Company) or shall have
been set aside and segregated in trust by the Company (if the Company shall
act as its own Paying Agent), provided that if such Notes are to be
--------
redeemed prior to the maturity thereof,
<PAGE>
25
notice of such redemption shall have been given as in Article Three or
Article Sixteen, as the case may be, provided, or provision satisfactory to
the Trustee shall have been made for giving such notice;
(c) Notes paid or Notes in lieu of or in substitution for which other
Notes shall have been authenticated and delivered pursuant to the terms of
Section 2.10 unless proof satisfactory to the Trustee is presented that any
such Notes are held by bona fide holders in due course; and
(d) Notes converted into Common Stock pursuant to Article Fifteen
hereof and Notes not deemed outstanding pursuant to Article Three.
Paying Agent: The term "Paying Agent" has the meaning provided in
------------
Section 2.05. The term "Paying Agent" includes any additional Paying Agent.
Person: The term "Person" means a corporation, an association, a
------
partnership, an organization, an individual, a joint venture, a joint stock
company, a trust, a government or a political subdivision thereof or a
governmental agency, and shall include any successor (by merger or otherwise) of
such entity.
Physical Notes: The term "Physical Notes" has the meaning provided in
--------------
Section 2.01.
PORTAL Market: The term "PORTAL Market" means the Private Offerings,
-------------
Resales and Trading through Automated Linkages Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
Predecessor Note: The term "Predecessor Note" of any particular Note
----------------
means every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purposes of this definition, any
Note authenticated and delivered under Section 2.10 in lieu of a lost, destroyed
or stolen Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note that it replaces.
Principal Office: The term "Principal Office" or "principal office of
----------------
the Trustee," or other similar term, means the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office is, at the date as of which this Indenture is dated,
located at 101 Barclay Street, Floor 21 West, New York, New York, Attn:
Corporate Trust Trustee Administration.
Private Placement Legend: The term "Private Placement Legend" means
------------------------
the legend provided for in Section 2.03(a).
<PAGE>
26
Purchase Shares: The term "Purchase Shares" has the meaning provided
---------------
for in Section 15.05(l).
QIB: The term "QIB" means a "qualified institutional buyer" as
---
defined in Rule 144A.
Receivables Sales Agreement: The term "Receivables Sales Agreement"
---------------------------
means (i) the Receivables Purchase Agreement, dated as of August 31, 1989, among
the Company, the financial institutions party thereto as purchasers and Chemical
Bank, as agent for such purchasers together with all other agreements,
instruments and documents executed or delivered pursuant thereto or in
connection therewith (including, without limitation, any Guarantees and security
documents), in each case, as such agreements, instruments and documents may be
amended (including, without limitation, any amendment and restatement thereof),
supplemented, extended, renewed, replaced or otherwise modified from time to
time, including, without limitation, any agreement increasing the amount of,
extending the maturity of, or otherwise restructuring (including, but not
limited to, by the inclusion of additional sellers thereunder that are
subsidiaries of the Company and whose obligations are Guaranteed by the Company
thereunder or by the requirement of additional credit enhancement to support the
obligations thereunder) all or any portion of the purchase commitments under
such agreement or any successor agreement or agreements and (ii) any other
agreement providing for the purchase, factoring or other disposition of accounts
receivable of the Company or any subsidiary at a discount from the face amount
thereof, whether or not there is any recourse against the Company of any
subsidiary with respect thereto.
Redeemable Stock: The term "Redeemable Stock" is defined to mean any
----------------
class or series of capital stock of any Person that by its terms or otherwise is
(i) required to be redeemed prior to the Stated Maturity of the Notes, (ii)
redeemable at the option of the holder of such class or series of capital stock
at any time prior to the Stated Maturity of the Notes or (iii) convertible into
or exchangeable for capital stock referred to in clause (i) or (ii) above or
Indebtedness having a scheduled maturity prior to the Stated Maturity of the
Notes.
Redemption Price: With respect to any Note, the term "Redemption
----------------
Price" means the applicable Redemption Price as set forth in such Note,
including any accrued Original Issue Discount referred to therein.
Reference Market Price: The term "Reference Market Price" shall
----------------------
initially mean $31.50 and in the event of any adjustment to the Conversion Rate
pursuant to Section 15.05, the Reference Market Price shall also be adjusted so
that the Reference Market Price after giving effect to any such adjustment shall
equal the Reference Market Price immediately prior to such adjustment multiplied
by a fraction, the numerator of which
<PAGE>
27
is the Conversion Rate immediately prior to such adjustment and the denominator
of which is the Conversion Rate after such adjustment.
Registrar: The term "Registrar" has the meaning provided in Section
---------
2.05.
Regulation S: The term "Regulation S" means Regulation S under the
------------
Securities Act.
Responsible Officer: The term "Responsible Officer," when used with
-------------------
respect to the Trustee, means any officer in the Principal Office of the Trustee
assigned by the Trustee to administer its corporate trust matters.
Restricted Note: The term "Restricted Note" means any Note that bears
---------------
or is required to bear the legend set forth in Section 2.03.
Rule 144A: The term "Rule 144A" means Rule 144A as promulgated under
---------
the Securities Act.
Securities Act: The term "Securities Act" means the Securities Act of
--------------
1933, as amended, and the rules and regulations promulgated thereunder.
Security Register: The term "Security Register" has the meaning
-----------------
provided in Section 2.05.
Senior Indebtedness: The term "Senior Indebtedness" means the
-------------------
following obligations of the Company, whether outstanding at the date hereof or
hereafter incurred or created:
(a) all Indebtedness and all other monetary obligations of the Company
under the U.S. Credit Agreement, any Interest Rate Agreement, Currency
Agreement or Commodity Agreement and the Company's guarantee of any
Indebtedness or monetary obligation of any of its subsidiaries under any
Interest Rate Agreement, Currency Agreement or Commodity Agreement,
(b) all monetary obligations of the Company under any Receivables Sale
Agreement,
(c) any principal of, premium, if any, and interest on the WSI
Agreement, the 10% Notes and the 10 3/4% Notes and all indebtedness of the
Company existing on the Closing Date secured by liens described in clause
(xiii) of the definition of Permitted Liens contained in the indenture with
respect to the 12 1/4% Debentures, including any refinancings thereof,
<PAGE>
28
(d) all other Indebtedness of the Company (other than the 12 1/4%
Debentures and the Notes), including principal and interest on such
Indebtedness, unless such Indebtedness, by its terms or by the terms of any
agreement or instrument pursuant to which such Indebtedness is issued, is
pari passu with, or subordinated in right of payment to, the Notes, and
---- -----
(e) all fees, expenses and indemnities payable in connection with the
U.S. Credit Agreement, the 10% Notes and the 10 3/4% Notes, any Receivable
Sales Agreement and Currency Agreements, Interest Rate Agreements and
Commodity Agreements;
provided that the term "Senior Indebtedness" shall not include
- --------
(i) any Indebtedness of the Company that, when Incurred and without
respect to any election under Section 1111(b) of the United States
Bankruptcy Code, was without recourse to the Company, or was incurred in
violation of the Indenture,
(ii) any Indebtedness of the Company to a subsidiary of the Company or
to a joint venture in which the Company has an interest,
(iii)any repurchase, redemption or other obligation in respect of
Redeemable Stock,
(iv) any Indebtedness to any employee of the Company or any of its
Subsidiaries,
(v) any liability for federal, state, local or other taxes owed or
owing by the Company, or
(vi) any Trade Payables.
Senior Indebtedness will also include interest accruing subsequent to events of
bankruptcy of the Company and its subsidiaries at the rate provided for in the
document governing such Senior Indebtedness, whether or not such interest is an
allowed claim enforceable against the debtor in a bankruptcy case under federal
bankruptcy law.
Senior Note Indentures: The term "Senior Note Indentures" means the
----------------------
Indenture, dated as of December 17, 1992, between the Company and Bank of
Montreal Trust Company, as trustee, relating to the 10 3/4 Notes, as it may be
amended or supplemented from time to time by one or more indentures supplemental
thereto entered into pursuant to the applicable provisions thereof, and the
Indenture, dated as of April 28, 1995, between the Company and The Bank of New
York, as trustee, relating to the 10% Notes, as
<PAGE>
29
it may be amended or supplemented from time to time by one or more indentures
supplemental thereto.
Senior Notes: The term "Senior Notes" means the 10% Notes and the 10
------------
3/4% Notes.
Senior Subordinated Obligations: The term "Senior Subordinated
-------------------------------
Obligations" means any principal of, premium, if any, or interest on the Notes
payable pursuant to the terms of the Notes or upon acceleration, including any
amounts received upon the exercise of rights of rescission or other rights of
action (including claims for damages) or otherwise, to the extent relating to
the purchase price of the Notes or amounts corresponding to such principal,
premium, if any, or interest on the Notes.
Stated Maturity: The term "Stated Maturity" means (i) with respect to
---------------
any debt security, the date specified in such debt security as the fixed date on
which the final installment of principal of such debt security is due and
payable and (ii) with respect to any scheduled installment of principal of or
interest on any debt security, the date specified in such debt security as the
fixed dated on which such installment is due and payable.
10% Notes: The term "10% Notes" means the 10% Senior Notes due 2005
---------
of the Company.
10 3/4% Notes: The term "10 3/4% Notes" means the 10 3/4% Senior
-------------
Notes due 2002 of the Company.
Trade Payables: The term "Trade Payables" means, with respect to any
--------------
Person, any accounts payable or any other indebtedness or monetary obligation to
trade creditors created, assumed or Guaranteed by such Person or any of its
subsidiaries arising in the ordinary course of business in connection with the
acquisition of goods or services.
Trading Day: The term "Trading Day" means a day during which trading
-----------
in securities generally occurs on the New York Stock Exchange or, if the
applicable security is not listed on the New York Stock Exchange, on the
principal other national or regional securities exchange on which the applicable
security is then listed or, if the applicable security is not listed on a
national or regional securities exchange, on the Nasdaq National Market or, if
the applicable security is not quoted on the Nasdaq National Market, on the
principal other market on which the applicable security is then traded.
Transfer Agent: The term "Transfer Agent" has the meaning provided in
--------------
Section 2.09(e).
<PAGE>
30
Trigger Event: The term "Trigger Event" has the meaning provided in
-------------
Section 15.05(h).
Trust Indenture Act: The term "Trust Indenture Act" means the Trust
-------------------
Indenture Act of 1939, as amended (15 U.S. Code (S)(S) 77aaa-77bbb), as in
effect on the date this Indenture was executed.
Trustee: The term "Trustee" means The Bank of New York and, subject
-------
to the provisions of Article Eight hereof, shall also include its successors and
assigns as Trustee hereunder.
12 1/4% Debentures: The term "12 1/4% Debentures" means the 12 1/4%
------------------
Senior Subordinated Deferred Coupon Debentures due 2004 of the Company.
U.S. Credit Agreement: The term "U.S. Credit Agreement" means the
---------------------
credit agreement, dated as of August 30, 1994, as amended, among the Company,
the Banks party thereto and the Bank Agents, together with all other agreements,
instruments and documents executed or delivered pursuant thereto or in
connection therewith (including, without limitation, any promissory notes,
Guarantees and security documents), in each case, as such agreements,
instruments and documents may be amended (including, without limitation, any
amendment and restatement thereof), supplemented, extended, renewed, replaced or
otherwise modified from time to time, including, without limitation, any
agreement increasing the amount of, extending the maturity of, refinancing or
otherwise restructuring (including, but not limited to, by the inclusion of
additional borrowers or Guarantors thereunder that are subsidiaries of the
Company and whose obligations are Guaranteed by the Company thereunder or by the
requirement of additional collateral or other credit enhancement to support the
obligations thereunder) all or any portion of the Indebtedness under such
agreement or any successor agreement or agreements; provided that, with respect
--------
to any agreement providing for the refinancing of Indebtedness under the U.S.
Credit Agreement, such agreement shall be the U.S. Credit Agreement under the
Indenture only if a notice to that effect is delivered by the Company to the
Trustee and there shall be at any time only one instrument that is the U.S.
Credit Agreement under the Indenture.
U.S. Global Note: The term "U.S. Global Note" has the meaning
----------------
provided in Section 2.01.
U.S. Person: The term "U.S. Person" has the meaning provided in Rule
-----------
902 under the Securities Act.
U.S. Physical Notes: The term "U.S. Physical Notes" has the meaning
-------------------
provided in Section 2.01.
<PAGE>
31
WSI Agreement: The term "WSI Agreement" means the Agreement, dated as
-------------
of May 21, 1990, between the Company and Wilmington Securities, Inc., a Delaware
corporation, together with all other agreements, instruments and documents
executed on or delivered pursuant thereto or in connection therewith (including,
without limitation, any promissory notes, Guarantees and security documents) in
each case, as such agreements, instruments and documents may be amended
(including, without limitation, any amendment and restatement thereof),
supplemented, extended, renewed, replaced or otherwise modified from time to
time, including, without limitation, any agreement increasing the amount of,
extending the maturity of, refinancing or otherwise restructuring (including,
but not limited to, by the inclusion of additional borrowers or guarantors
thereunder that are Subsidiaries of the Company and whose obligations are
Guaranteed by the Company thereunder or by the requirement of additional
collateral or other credit enhancement to support the obligations thereunder)
all or any portion of the Indebtedness under such agreement or any successor
agreement; provided that, with respect to any agreement providing for the
--------
refinancing of Indebtedness under the WSI Agreement, such agreement shall be the
WSI Agreement under this Indenture only if a notice to that effect is delivered
by the Company to the Trustee and there shall be at any time only one instrument
that is the WSI Agreement under this Indenture.
SECTION 1.02. Rules of Construction. Unless the context otherwise
---------------------
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and words in the plural
include the singular;
(v) provisions apply to successive events and transactions;
(vi) "herein," "hereof" and other words of similar import refer to
this Indenture as a whole and not to any particular Article, Section or
other subdivision; and
(vii) all references to Sections or Articles refer to Sections or
Articles of this Indenture unless otherwise indicated.
<PAGE>
32
ARTICLE TWO
ISSUE, DESCRIPTION, EXECUTION,
REGISTRATION AND EXCHANGE OF NOTES
SECTION 2.01. Form, Date and Denomination of Notes. The Notes and
------------------------------------
the Trustee's certificate of authentication shall be substantially in the form
recited above. The Notes may have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have letters, notations, legends or endorsements required by
law, stock exchange agreements to which the Company is subject or usage. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note. The Company shall
approve the form of the Notes and any notation, legend or endorsement on the
Notes.
The Notes shall be issuable in registered form without coupons in
denominations of $1,000 principal amount at maturity and any integral multiple
thereof. Every Note shall be dated the date of its authentication, shall bear
interest from the applicable date indicated therein and shall be payable on the
dates specified on the face of the form of Note recited above.
The terms and provisions contained in the form of the Notes recited
above shall constitute, and are hereby expressly made, a part of this Indenture.
Each of the Company and the Trustee, by its execution and delivery of this
Indenture, expressly agrees to the terms and provisions of the Notes applicable
to it and to be bound thereby.
Notes offered and sold in reliance on Rule 144A shall be issued in the
form of permanent global Note(s) in registered form, substantially in the form
recited above (the "U.S. Global Note"), deposited with the Trustee, as custodian
for the Depositary, duly executed by the Company and authenticated by the
Trustee as hereinafter provided. The aggregate principal amount at maturity of
the U.S. Global Note may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Notes offered and sold in offshore transactions in reliance on
Regulation S shall be issued in the form of permanent global Note(s) in
registered form substantially in the form recited above (the "Offshore Global
Note") deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount at maturity of the Offshore Global
Note may from time to time be increased or decreased by adjustments made in the
records of the Trustee, as custodian for the Depositary or its nominee, as
herein provided.
<PAGE>
33
Notes which are offered and sold to Institutional Accredited Investors
which are not QIBs (excluding Non-U.S. Persons) shall be issued in the form of
permanent certificated Notes in registered form in substantially the form
recited above (the "U.S. Physical Notes"). Notes issued pursuant to Section
2.08 in exchange for interests in the U.S. Global Note or the Offshore Global
Note shall be in the form of U.S. Physical Notes or in the form of permanent
certificated Notes in registered form substantially in the form recited above
(the "Offshore Physical Notes"), respectively.
The Offshore Physical Notes and U.S. Physical Notes are sometimes
collectively herein referred to as the "Physical Notes". The U.S. Global Note
and the Offshore Global Note are sometimes referred to as the "Global Notes."
The definitive Notes shall be typed, printed, lithographed or engraved
or produced by any combination of these methods or may be produced in any other
manner permitted by the rules of any securities exchange on which the Notes may
be listed, all as determined by the officers executing such Notes, as evidenced
by their execution of such Notes.
SECTION 2.02. Payments of Interest. The Person in whose name any
--------------------
Note (or its Predecessor Note) is registered at the close of business on any
record date with respect to any interest payment date shall be entitled to
receive the interest payable on such interest payment date notwithstanding the
cancellation of such Note upon any transfer or exchange subsequent to the record
date and prior to such interest payment date. Interest may, at the option of
the Company, be paid by check mailed to the address of such Person on the
registry kept for such purposes, provided that with respect to any holder of
--------
Notes with an aggregate principal amount at maturity equal to or in excess of $5
million, at the request of such holder on or prior to the record date in writing
(such writing to include appropriate wire instructions) the Company shall pay
interest on such holder's Notes by wire transfer in immediately available funds.
The term "record date" with respect to any interest payment date shall mean the
June 1 or December 1 preceding said June 15 or December 15, respectively.
Interest on the Notes shall be computed on the basis of a 360-day year of twelve
30-day months. Accrual of Original Issue Discount shall be calculated on the
basis of a 360-day year of twelve 30-day months, on a semi-annual bond
equivalent basis.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any said June 15 or December 15 (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Noteholder on
the relevant record date by virtue of its having been such Noteholder; and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in the paragraph below:
The Company may elect to make payment of any Defaulted Interest to the
Persons in whose names the Notes (or their respective Predecessor Notes) are
registered at
<PAGE>
34
the close of business on a special record date for the payment of such Defaulted
Interest, which date shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed to be
paid on each Note and the date of the proposed payment (which shall be not less
than 25 days after the receipt by the Trustee of such notice, unless the Trustee
shall consent to an earlier date), and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such special record date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to be
mailed, first-class postage prepaid to each Noteholder at his address as it
appears in the Note register, not less than 10 days prior to such special record
date. Notice of the proposed payment of such Defaulted Interest and the special
record date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Notes (or their respective Predecessor
Notes) are registered at the close of business on such special record date and
shall no longer be payable.
SECTION 2.03. Restrictive Legends. (a) (i) The U.S. Global Note and
-------------------
each U.S. Physical Note shall bear the legend set forth below on the face
thereof until the expiration of the time period referred to in Rule 144(k) under
the Securities Act, as in effect from time to time, with respect to such Note,
and (ii) the Offshore Physical Notes and the Offshore Global Note shall bear the
legend set forth below on the face thereof until at least 41 days after the
Closing Date and receipt by the Company and the Trustee of a certificate
substantially in the form of Exhibit A hereto:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
STATE SECURITIES LAWS, AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
<PAGE>
35
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE NOTE
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT
RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH NOTE WITHIN THE TIME PERIOD REFERRED TO
UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) IN THE
CASE OF SUCH STOCK) EXCEPT (A) TO EXIDE CORPORATION OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THE NOTE EVIDENCED HEREBY AND SUCH COMMON STOCK (THE FORM OF WHICH LETTER
CAN BE OBTAINED FROM THE TRUSTEE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THE NOTE EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE
EVIDENCED HEREBY WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k), THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE
TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE
OR THE COMPANY, SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL
BE REMOVED AFTER THE EXPIRATION OF SUCH TIME PERIOD. AS USED HEREIN, THE
TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
<PAGE>
37
(b) Unless a Conversion Share has been sold pursuant to a registration
statement, each stock certificate representing any Conversion Share shall bear
the legend set forth below:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE
UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT
AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES THAT
UNTIL THE EXPIRATION OF THE TIME PERIOD REFERRED TO IN RULE 144(k) (1) IT
WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED HEREBY
EXCEPT (A) TO EXIDE CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE THE
UNITED STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE TRANSFER AGENT A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM THE TRANSFER AGENT), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE (F) ABOVE), IT WILL FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO
EACH PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED (OTHER
THAN A TRANSFER PURSUANT TO CLAUSE (F) ABOVE) A NOTICE
<PAGE>
37
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY
PURSUANT TO CLAUSE (F) ABOVE) OR THE EXPIRATION OF THE TIME PERIOD REFERRED
TO ABOVE OR UPON THE EARLIER SATISFACTION OF EXIDE CORPORATION AND THE
TRANSFER AGENT THAT THE COMMON STOCK HAS BEEN OR IS BEING OFFERED AND SOLD
IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT. AS USED HEREIN, THE
TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
(c) Each Global Note shall also bear the following legend on the face
thereof:
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR
SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY
SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN SECTION 2.09 OF THE INDENTURE.
<PAGE>
38
SECTION 2.04. Execution and Authentication. Two Officers shall
----------------------------
execute the Notes for the Company by facsimile or manual signature in the name
and on behalf of the Company.
If an Officer whose signature is on a Note no longer holds that office
at the time the Trustee or authenticating agent authenticates the Note, the Note
shall be valid nevertheless.
A Note shall not be valid until the Trustee or authenticating agent
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.
The Trustee or an authenticating agent shall upon receipt of a Company
Order authenticate for original issue Notes in the aggregate principal amount at
maturity of up to $397,900,000; provided that the Trustee shall be entitled to
--------
receive an Officers' Certificate and an Opinion of Counsel of the Company in
connection with such authentication of Notes. The Opinion of Counsel shall, if
requested by the Trustee, be to the effect that:
(a) the form and terms of such Notes have been established by or
pursuant to a Board Resolution or an indenture supplemental hereto in
conformity with the provisions of this Indenture;
(b) such supplemental indenture, if any, when executed and delivered
by the Company and the Trustee, will constitute a valid and binding
obligation of the Company;
(c) such Notes, when authenticated and delivered by the Trustee and
issued by the Company in the manner and subject to any conditions specified
in such Opinion of Counsel, will constitute valid and binding obligations
of the Company in accordance with their terms and will be entitled to the
benefits of this Indenture, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general
equity principles; and
(d) that the Company has been duly incorporated in, and is a validly
existing corporation in good standing under the laws of, a state of the
United States.
Such Company Order shall specify the amount of Notes to be authenticated and the
date on which the original issue of Notes is to be authenticated. The aggregate
principal amount at maturity of Notes outstanding at any time may not exceed the
amount set forth above except for Notes authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Notes
pursuant to Section 2.07, 2.10 or 2.11.
<PAGE>
39
The Trustee may appoint an authenticating agent to authenticate Notes.
An authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such authenticating agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate of the Company.
SECTION 2.05. Registrar and Paying Agent. The Company shall maintain
--------------------------
an office or agency where Notes may be presented for registration of transfer or
for exchange (the "Registrar"), an office or agency where Notes may be presented
for payment (the "Paying Agent") and an office or agency where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served, which shall be in the Borough of Manhattan, The City of New York. The
Company shall cause the Registrar to keep a register of the Notes and of their
transfer and exchange (the "Security Register"). The Company may have one or
more co-Registrars and one or more additional Paying Agents.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall give
prompt written notice to the Trustee of the name and address of any such Agent
and any change in the address of such Agent. If the Company fails to maintain a
Registrar, Paying Agent and/or agent for service of notices and demands, the
Trustee shall act as such Registrar, Paying Agent and/or agent for service of
notices and demands for so long as such failure shall continue. The Company may
remove any Agent upon written notice to such Agent and the Trustee; provided
--------
that no such removal shall become effective until (i) the acceptance of an
appointment by a successor Agent to such Agent as evidenced by an appropriate
agency agreement entered into by the Company and such successor Agent and
delivered to the Trustee or (ii) notification to the Trustee that the Trustee
shall serve as such Agent until the appointment of a successor Agent in
accordance with clause (i) of this proviso. The Company, any Subsidiary of the
Company, or any Affiliate of any of them may act as Paying Agent, Registrar or
co-Registrar, and/or agent for service of notice and demands.
The Company initially appoints the Trustee as Registrar, Paying Agent,
authenticating agent and agent for service of notice and demands. If, at any
time, the Trustee is not the Registrar, the Registrar shall make available to
the Trustee on or before each Interest Payment Date and at such other times as
the Trustee may reasonably request, the names and addresses of the Noteholders
as they appear in the Security Register.
SECTION 2.06. Paying Agent to Hold Money in Trust. Not later than
-----------------------------------
each due date of the principal, premium, if any, and interest on any Notes, the
Company shall deposit with the Paying Agent money in immediately available funds
sufficient to pay such principal, premium, if any, and interest so becoming due.
The Company shall require each
<PAGE>
40
Paying Agent, if any, other than the Trustee to agree in writing that such
Paying Agent shall hold in trust for the benefit of the Noteholders or the
Trustee all money held by the Paying Agent for the payment of principal of,
premium, if any, and interest on the Notes (whether such money has been paid to
it by the Company or any other obligor on the Notes), and that such Paying Agent
shall promptly notify the Trustee of any default by the Company (or any other
obligor on the Notes) in making any such payment. The Company at any time may
require a Paying Agent to pay all money held by it to the Trustee and account
for any funds disbursed, and the Trustee may at any time during the continuance
of any payment default, upon written request to a Paying Agent, require such
Paying Agent to pay all money held by it to the Trustee and to account for any
funds disbursed. Upon doing so, the Paying Agent shall have no further
liability for the money so paid over to the Trustee. If the Company or any
subsidiary of the Company or any Affiliate of any of them acts as Paying Agent,
it will, on or before each due date of any principal of, premium, if any, or
interest on the Notes, segregate and hold in a separate trust fund for the
benefit of the Noteholders a sum of money sufficient to pay such principal,
premium, if any, or interest so becoming due until such sum of money shall be
paid to such Noteholders or otherwise disposed of as provided in this Indenture,
and will promptly notify the Trustee of its action or failure to act as required
by this Section 2.06. In addition, the Company may pay the principal of,
premium, if any, and interest on the Notes by its check payable in money of the
United States mailed to a Noteholders' registered address (as reflected in the
Security Register), provided that a holder of Notes with an aggregate principal
amount at maturity in excess of $5 million will be paid by wire transfer in
immediately available funds) at the election of such holder, as provided in
Section 2.02.
SECTION 2.07. Transfer and Exchange. The Notes are issuable only in
---------------------
registered form. A Noteholder may transfer a Note by written application to the
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Noteholder only upon,
registration of the transfer by the Registrar in the Security Register. Prior
to the registration of any transfer by a Noteholder as provided herein, the
Company, the Trustee, and any agent of the Company shall treat the Person in
whose name the Note is registered as the owner thereof for all purposes whether
or not the Note shall be overdue, and neither the Company, the Trustee, nor any
such agent shall be affected by notice to the contrary. Furthermore, any
Noteholder of or beneficial owner of an interest in a Global Note shall, by
acceptance of such Global Note, be deemed to have agreed that transfers of
beneficial interests in such Global Note may be effected only through a book-
entry system maintained by the Depositary (or its agent), and that ownership of
a beneficial interest in the Note shall be required to be reflected in a book
entry. When Notes are presented to the Registrar or a co-Registrar with a
request to register the transfer or to exchange them for an equal principal
amount at maturity of Notes of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested if its
requirements for such transactions are met. To permit registrations of
transfers and
<PAGE>
41
exchanges in accordance with the terms, conditions and restrictions hereof, the
Company shall execute and the Trustee shall authenticate Notes at the
Registrar's request. No service charge shall be made to any Noteholder for any
registration of transfer or exchange or redemption of the Notes, but the Company
may require payment by the Noteholder of a sum sufficient to cover any transfer
tax or similar governmental charge payable in connection therewith (other than
any such transfer taxes payable upon exchanges pursuant to Section 2.11).
The Registrar shall not be required (i) to issue, register the
transfer of or exchange any Note during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Notes selected for redemption under Section 3.03 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
SECTION 2.08. Book-Entry Provisions for Global Notes. (a) The U.S.
--------------------------------------
Global Note and Offshore Global Note initially shall (i) be registered in the
name of the Depositary for such Global Notes or the nominee of such Depositary,
(ii) be delivered to the Trustee as custodian for such Depositary and (iii) bear
legends as set forth in Section 2.03.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under any
Global Note, and the Depositary may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or impair, as between the Depositary
and its Agent Members, the operation of customary practices governing the
exercise of the rights of a beneficial owner of any Note.
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Note may
be transferred in accordance with the applicable rules and procedures of the
Depositary and the provisions of Section 2.09. In addition, U.S. Physical Notes
and Offshore Physical Notes shall be transferred to all beneficial owners in
exchange for their beneficial interests in the U.S. Global Note or the Offshore
Global Note, respectively, if (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for the U.S. Global Note or the
Offshore Global Note, as the case may be, and a successor depositary is not
appointed by the Company within 90 days of such notice or (ii) an Event of
Default has occurred and is
<PAGE>
42
continuing and the Registrar has received a request to the foregoing effect from
the Depositary.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a Person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) In connection with any transfer pursuant to paragraph (b) of this
Section 2.08 of a portion of the beneficial interests in the U.S. Global Note to
beneficial owners who are required to hold U.S. Physical Notes, the Registrar
shall reflect on its books and records the date and a decrease in the principal
amount at maturity of the U.S. Global Note in an amount equal to the principal
amount at maturity of the beneficial interest in the U.S. Global Note to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more U.S. Physical Notes of like tenor and amount.
(e) In connection with the transfer of the entire U.S. Global Note or
Offshore Global Note to beneficial owners pursuant to paragraph (b) of this
Section 2.08, the U.S. Global Note or Offshore Global Note, as the case may be,
shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depositary in exchange for its beneficial
interest in the U.S. Global Note or Offshore Global Note, as the case may be, an
equal aggregate principal amount at maturity of U.S. Physical Notes or Offshore
Physical Notes, as the case may be, of authorized denominations.
(f) Any U.S. Physical Note delivered in exchange for an interest in
the U.S. Global Note pursuant to paragraph (b) or (d) of this Section 2.08
shall, except as otherwise provided by paragraph (f)(i)(A) or paragraph (d) of
Section 2.09, bear the legend regarding transfer restrictions applicable to the
U.S. Physical Note set forth in Section 2.03.
(g) The registered holder of a Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Noteholder is
entitled to take under this Indenture or the Notes.
(h) QIBs that are beneficial owners of interests in a Global Note may
receive Physical Notes (which shall bear the Private Placement Legend if
required by Section 2.03) in accordance with the procedures of the Depositary.
In connection with the execution, authentication and delivery of such Physical
Notes, the Registrar shall reflect on its books and records a decrease in the
principal amount of the relevant Global Note equal to
<PAGE>
43
the principal amount of such Physical Notes and the Company shall execute and
the Trustee shall authenticate and deliver one or more Physical Notes having an
equal aggregate principal amount.
SECTION 2.09. Special Transfer Provisions. (a) Transfers to QIBs.
--------------------------- -----------------
The following provisions shall apply with respect to the registration of any
proposed transfer of a U.S. Physical Note or an interest in the U.S. Global Note
to a QIB (excluding Non-U.S. Persons):
(i) If the Note to be transferred consists of (A) U.S. Physical Notes,
the Registrar shall register the transfer if such transfer is being made by
a proposed transferor who has checked the box provided for on the form of
Note stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with the provisions of
Rule 144A to a transferee who has signed the certification provided for on
the form of Note stating, or has otherwise advised the Company and the
Registrar in writing, that it is purchasing the Note for its own account or
an account with respect to which it exercises sole investment discretion
and that it and any such account is a QIB within the meaning of Rule 144A,
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company as
it has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A or (B) an interest in the U.S. Global
Note, the transfer of such interest may be effected only through the book
entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the Note to be
transferred consists of U.S. Physical Notes, upon receipt by the Registrar
of the documents referred to in clause (i) and instructions given in
accordance with the Depositary's and the Registrar's procedures, the
Registrar shall reflect on its books and records the date and an increase
in the principal amount at maturity of the U.S. Global Note in an amount
equal to the principal amount at maturity of the U.S. Physical Notes to be
transferred, and the Trustee shall cancel the Physical Note so transferred.
(b) Transfers of Interests in the Offshore Global Note or Offshore
--------------------------------------------------------------
Physical Notes to U.S. Persons. The following provisions shall apply with
- ------------------------------
respect to any transfer of interests in the Offshore Global Note or Offshore
Physical Notes to U.S. Persons:
(i) prior to the removal of the Private Placement Legend from the
Offshore Global Note or Offshore Physical Notes pursuant to Section 2.03,
the Registrar shall refuse to register such transfer; and
<PAGE>
44
(ii) after such removal, the Registrar shall register the transfer of any
such Note without requiring any additional certification.
(c) Transfers to Non-U.S. Persons at Any Time. The following
-----------------------------------------
provisions shall apply with respect to any transfer of a Note to a Non-U.S.
Person:
(i) The Registrar shall register any proposed transfer to any Non-U.S.
Person if the Note to be transferred is a U.S. Physical Note or an interest
in the U.S. Global Note only upon receipt of a certificate substantially in
the form of Exhibit B from the proposed transferor.
(ii) (A) If the proposed transferor is an Agent Member holding a beneficial
interest in the U.S. Global Note, upon receipt by the Registrar of (1) the
documents required by paragraph (i) and (2) instructions in accordance with
the Depositary's and the Registrar's procedures, the Registrar shall reflect
on its books and records the date and a decrease in the principal amount at
maturity of the U.S. Global Note in an amount equal to the principal amount
at maturity of the beneficial interest in the U.S. Global Note to be
transferred, and (B) if the proposed transferee is an Agent Member, upon
receipt by the Registrar of instructions given in accordance with the
Depositary's and the Registrar's procedures, the Registrar shall reflect on
its books and records the date and an increase in the principal amount at
maturity of the Offshore Global Note in an amount equal to the principal
amount at maturity of the U.S. Physical Notes or the U.S. Global Note, as the
case may be, to be transferred, and the Trustee shall cancel the Physical
Note, if any, so transferred or decrease the amount of the U.S. Global Note.
(d) Private Placement Legend. Upon the transfer, exchange or
------------------------
replacement of Notes not bearing the Private Placement Legend, the Registrar
shall deliver Notes that do not bear the Private Placement Legend. Upon the
transfer, exchange or replacement of Notes bearing the Private Placement Legend,
the Registrar shall deliver only Notes that bear the Private Placement Legend
unless either (i) the Private Placement Legend is no longer required by Section
2.03 or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(e) General. By its acceptance of any Note bearing the Private
-------
Placement Legend or any Conversion Share bearing the legend set forth in Section
2.03(b), each Holder of or beneficial owner of an interest in such Note or
Conversion Share acknowledges the restrictions on transfer of such Note or
Conversion Shares set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note or Conversion Share only as
provided in this Indenture. The Registrar or transfer agent for the Company's
<PAGE>
45
Common Stock (the "Transfer Agent"), as applicable, shall not register a
transfer of any Note or Conversion Share unless such transfer complies with the
restrictions on transfer of such Note or Conversion Share set forth in this
Indenture. In connection with any transfer of Notes or Conversion Share to an
Institutional Accredited Investor, each such Noteholder or beneficial owner
agrees by its acceptance of the Notes or Conversion Shares to furnish the
Registrar or the Transfer Agent, as applicable, or the Company such
certifications, legal opinions or other information as such Person may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
--------
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
(f) Transfers to Non-QIB Institutional Accredited Investors. The
-------------------------------------------------------
following provisions shall apply with respect to the registration of any
proposed transfer of a Note to any Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons):
(i) The Registrar shall register the transfer of any Note, whether or
not such Note bears the Private Placement Legend, if (A) the requested
transfer is after the time period referred to in Rule 144(k) under the
Securities Act as in effect with respect to such transfer or (B) the
proposed transferee has delivered to the Registrar (1) a certificate
substantially in the form of Exhibit C hereto and (2) if requested by the
Company or the Trustee, an Opinion of Counsel acceptable to such Person
that such transfer is in compliance with the Securities Act.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the U.S. Global Note, upon receipt by the Registrar
of (A) the documents, if any, required by paragraph (i), (B) if requested
by the Company or the Trustee, an opinion of counsel acceptable to such
Person that such transfer is in compliance with the Securities Act and (C)
instructions given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the U.S. Global Note in an amount
equal to the principal amount of the beneficial interest in the U.S. Global
Note to be transferred, and the Company shall execute, and the Trustee
shall authenticate and deliver, one or more U.S. Physical Notes of like
tenor and amount.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.08 or this Section 2.09.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
<PAGE>
46
SECTION 2.10. Mutilated, Destroyed, Lost or Stolen Notes. In case
------------------------------------------
any temporary or definitive Note shall become mutilated or be apparently
destroyed, lost or stolen, the Company in its discretion may execute, and upon
its request the Trustee shall authenticate and deliver, a new Note, bearing a
number not contemporaneously outstanding, in exchange and substitution for the
mutilated Note, or in lieu of and in substitution for the Note so apparently
destroyed, lost or stolen. In every case the applicant for a substituted Note
shall furnish to the Company and to the Trustee such security or indemnity as
may be reasonably required by them to save each of them harmless, and, in every
case of destruction, loss or theft, the applicant shall also furnish to the
Company and to the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Note and of the ownership thereof.
The Trustee may authenticate any such substituted Note and deliver the
same upon the receipt of such security or indemnity as the Trustee and the
Company may require. Upon the issuance of any substituted Note, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature or has been
called for redemption or is about to be converted into Common Stock shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a
mutilated Note) if the applicant for such payment or conversion shall furnish to
the Company and to the Trustee such security or indemnity as may be reasonably
required by them to save each of them harmless and, in case of destruction, loss
or theft, evidence satisfactory to the Company and the Trustee of the
destruction, loss or theft of such Note and of the ownership thereof.
Every substituted Note issued pursuant to the provisions of this
Section 2.10 by virtue of the fact that any Note is destroyed, lost or stolen
shall constitute an additional contractual obligation of the Company, whether or
not the apparently destroyed, lost or stolen Note shall be found at any time,
and shall be entitled to all the benefits of (but shall be subject to all the
limitations set forth in) this Indenture equally and proportionately with any
and all other Notes duly issued hereunder. To the extent permitted by law, all
Notes shall be held and owned upon the express condition that the foregoing
provisions are exclusive with respect to the replacement or payment or
conversion of mutilated, destroyed, lost or stolen Notes and shall preclude any
and all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment or
conversion of negotiable instruments or other securities without their
surrender.
SECTION 2.11. Temporary Notes. Pending the preparation of definitive
---------------
Notes, the Company may execute and the Trustee shall authenticate and deliver
temporary Notes (printed or lithographed). Temporary Notes shall be issuable in
any authorized denomination, and substantially in the form of the definitive
Notes but with such omissions,
<PAGE>
47
insertions and variations as may be appropriate for temporary Notes, all as may
be determined by the Company. Every such temporary Note shall be executed by
the Company and authenticated by the Trustee upon the same conditions and in
substantially the same manner, and with the same effect, as the definitive
Notes. Without unreasonable delay the Company will execute and deliver to the
Trustee definitive Notes and thereupon any or all temporary Notes may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 5.02 and the Trustee shall authenticate and deliver
in exchange for such temporary Notes an equal aggregate principal amount at
maturity of definitive Notes. Such exchange shall be made by the Company at its
own expense and without any charge therefor. Until so exchanged, the temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as definitive Notes authenticated and delivered hereunder.
SECTION 2.12. Cancellation of Notes Paid, Etc. All Notes surrendered
-------------------------------
for the purpose of payment, redemption, conversion, exchange or registration of
transfer, shall, if surrendered to the Company or any Paying Agent or any
Registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall return such
canceled Notes to the Company. If the Company shall acquire any of the Notes,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Notes unless and until the same are delivered
to the Trustee for cancellation.
SECTION 2.13. CUSIP Numbers. The Company in issuing the Notes may
-------------
use "CUSIP", "CINS" or other identification numbers (if then generally in use),
and the Company, or the Trustee on behalf of the Company, shall use CUSIP
numbers, CINS or other identification numbers, as the case may be, in notices of
redemption or exchange as a convenience to Holders; provided that any such
--------
notice shall state that no representation is made as to the correctness of such
numbers either as printed on the Notes or as contained in any notice of
redemption or exchange and that reliance may be placed only on the other
identification numbers printed on the Notes; provided further that failure to us
-------- -------
CUSIP numbers, CINS or other identification numbers, as the case may be, in any
notice of redemption or exchange shall not affect the validity or sufficiency of
such notice.
ARTICLE THREE
REDEMPTION OF NOTES
SECTION 3.01. Redemption Prices. The Company may not redeem the
-----------------
Notes prior to December 15, 1998. On or after that date, the Company may, at
its option, redeem all or from time to time any part of the Notes on any date
prior to maturity, upon
<PAGE>
48
notice as set forth in Section 3.03, and at the applicable Redemption Price
together with accrued interest to, but excluding, the date fixed for redemption;
provided that any semi-annual payment of interest becoming due on the date fixed
- --------
for redemption shall be payable to the holders of such Notes registered on the
relevant record date.
SECTION 3.02. Notice to Trustee. If the Company elects to redeem
-----------------
Notes pursuant to Section 3.01, it shall notify the Trustee in writing of the
redemption date and the principal amount of Notes to be redeemed, as least 45
days before the redemption date (unless a shorter period shall be satisfactory
to the Trustee).
SECTION 3.03. Notice of Redemption; Selection of Notes. In case the
----------------------------------------
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.01 for redemption, it or, at its
request, the Trustee in the name of and at the expense of the Company, shall
mail or cause to be mailed a notice of such redemption at least 30 and not more
than 60 days prior to the date fixed for redemption to the holders of Notes so
to be redeemed as a whole or in part at their last addresses as the same appear
on the registry books of the Company. Such mailing shall be by first class
mail. The notice if mailed in the manner herein provided shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the holder of any Note designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Note.
Each such notice of redemption shall identify the Notes to be redeemed
(including CUSIP or CINS number), specify the principal amount at maturity of
each Note to be redeemed, the date fixed for redemption, the Redemption Price at
which Notes are to be redeemed, the place or places of payment, that payment
will be made upon presentation and surrender of such Notes, that interest and
Original Issue Discount accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest and Original
Issue Discount thereon or on the portions thereof to be redeemed will cease to
accrue, unless the Company defaults in the payment of the Redemption Price.
Such notice shall also state the current Conversion Rate and the date on which
the right to convert such Notes or portions thereof into Common Stock will
expire. If fewer than all the Notes are to be redeemed, the notice of
redemption shall identify the Notes to be redeemed. In case any Note is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount at maturity thereof to be redeemed and shall state that on and
after the date fixed for redemption, upon surrender of such Note, a new Note or
Notes in principal amount at maturity equal to the unredeemed portion thereof
will be issued.
No later than the Business Day prior to the redemption date specified
in the notice of redemption given as provided in this Section, the Company will
deposit with the Trustee or with one or more Paying Agents (or, if the Company
is acting as its own Paying
<PAGE>
49
Agent, set aside, segregate and hold in trust as provided in Section 5.04) an
amount of money sufficient to redeem on the redemption date all the Notes so
called for redemption (other than those theretofore surrendered for conversion
into Common Stock) at the appropriate Redemption Price, together with accrued
interest to the date fixed for redemption. If any Note called for redemption is
converted pursuant hereto, any money deposited with the Trustee or any Paying
Agent or so segregated and held in trust for the redemption of such Note shall
be paid to the Company upon its request, or, if then held by Company shall be
discharged from such trust.
If fewer than all the Notes are to be redeemed, the Trustee shall
select, by lot, pro rata or in such other manner as the Trustee shall deem
equitable and fair, the Notes or portions thereof (in integral multiples of
$1,000 principal amount at maturity) to be redeemed. If any Note selected for
partial redemption is converted in part after such selection, the converted
portion of such Note shall be deemed (so far as it may be) to be the portion to
be selected for redemption. The Notes (or portions thereof) so selected shall
be deemed duly selected for redemption for all purposes hereof, notwithstanding
that any such Note is converted as a whole or in part before the mailing of the
notice of redemption.
Upon any redemption of less than all Notes, the Company and the
Trustee may treat as outstanding any Notes surrendered for conversion during the
period of 15 days next preceding the mailing of a notice of redemption and need
not treat as outstanding any Note authenticated and delivered during such period
in exchange for the unconverted portion of any Note converted in part during
such period.
SECTION 3.04. Payment of Notes Called for Redemption. If notice of
--------------------------------------
redemption has been given as above provided, the Notes or portions of Notes with
respect to which such notice has been given shall, unless theretofore converted
into Common Stock pursuant to the terms hereof, become due and payable on the
date and at the place or places stated in such notice at the applicable
Redemption Price, together with interest accrued to the date fixed for
redemption, and on and after said date (unless the Company shall default in the
payment of such Notes at the Redemption Price, together with interest accrued to
said date) Original Issue Discount and interest on the Notes or portions of
Notes so called for redemption shall cease to accrue and such Notes shall cease
after the date fixed for redemption to be convertible into Common Stock and,
except as provided in Sections 8.05 and 13.04, to be entitled to any benefit or
security under this Indenture, and the holders thereof shall have no right in
respect of such Notes except the right to receive the Redemption Price thereof
and unpaid interest to the date fixed for redemption. On presentation and
surrender of such Notes at a place of payment in said notice specified, the said
Notes or the specified portions thereof shall be paid and redeemed by the
Company at the applicable Redemption Price, together with interest accrued
thereon to the date fixed for redemption; provided that any semi-annual payment
--------
of interest becoming due on the date
<PAGE>
50
fixed for redemption shall be payable to the holders of such Notes registered as
such on the relevant record date subject to the terms and provisions of Section
2.02 hereof.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations, in
principal amount at maturity equal to the unredeemed portion of the Note so
presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any notice of optional redemption during the continuance of a default in
payment of principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price or interest in
respect of the Notes or of any Event of Default. If any Note called for
redemption shall not be so paid upon surrender thereof for redemption, the
Redemption Price and, to the extent legally permitted, interest, if any, in
respect thereof shall, until paid or duly provided for, bear interest from the
date fixed for redemption at the rate borne by the Note (treating the accrual of
Original Issue Discount as if it were interest) and such Note shall remain
convertible into Common Stock until the Redemption Price shall have been paid or
duly provided for.
SECTION 3.05. No Sinking Fund. The Notes shall not be entitled to
---------------
the benefit of any sinking fund.
SECTION 3.06. Conversion Arrangement on Call for Redemption. In
---------------------------------------------
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more investment
bankers or other purchasers to purchase such Notes by paying to the Trustee in
trust for the Noteholders, on or before the close of business on the date fixed
for redemption, an amount not less than the applicable Redemption Price,
together with interest accrued to the date fixed for redemption, of such Notes.
Notwithstanding anything to the contrary contained in this Article Three, the
obligation of the Company to pay the Redemption Price of such Notes, together
with interest accrued to the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, a copy of which will be filed
with the Trustee prior to the date fixed for redemption, any Notes not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article Fifteen) surrendered by such purchasers for conversion, all
as of immediately prior to the close of business on the date fixed for
redemption, subject to payment of the above amount as aforesaid. At the
direction of the Company, the Trustee shall hold and dispose of any such amount
paid to it in the same manner as it would monies deposited with it by the
Company for the redemption of Notes. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers for the purchase
and conversion of any Notes
<PAGE>
51
shall increase or otherwise affect any of the powers, duties, responsibilities
or obligations of the Trustee as set forth in this Indenture, and the Company
agrees to indemnify the Trustee from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such arrangement
for the purchase and conversion of any Notes between the Company and such
purchasers to which the Trustee has not consented in writing, including the
costs and expenses incurred by the Trustee in the defense of any claim or
liability arising out of or in connection with the exercise or performance of
any of its powers, duties, responsibilities or obligations under this Indenture.
ARTICLE FOUR
SUBORDINATION OF NOTES
SECTION 4.01. Securities Subordinated to Senior Indebtedness. The
----------------------------------------------
Company and the Trustee each covenant and agree and each Holder, by its
acceptance of a Note, likewise covenants and agrees that all Securities shall be
issued subject to the provisions of this Article Four; and each Person holding
any Note, whether upon original issue or upon transfer, assignment or exchange
thereof, accepts and agrees that Senior Subordinated Obligations shall, to the
extent and in the manner set forth in this Article Four, be subordinated in
right of payment to the prior payment in full, in cash or cash equivalents, of
all amounts payable under Senior Indebtedness (including any interest accruing
subsequent to an event specified in Section 7.01(d) or 7.01(e) of this
Indenture, whether or not such interest is an allowed claim enforceable against
the debtor under the United States Bankruptcy Code).
SECTION 4.02. No Payment on Notes in Certain Circumstances. (a) No
--------------------------------------------
direct or indirect payment by or on behalf of the Company of Senior Subordinated
Obligations, whether pursuant to the terms of the Notes or upon acceleration or
otherwise, shall be made if, at the time of such payment, there exists a default
in the payment of all or any portion of the obligations on any Senior
Indebtedness, and such default shall not have been cured or waived or the
benefits of this sentence waived by or on behalf of the holders of such Senior
Indebtedness.
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Noteholder when such payment is
prohibited by Section 4.02(a) of this Indenture, the Trustee shall promptly
notify the holders of Senior Indebtedness of such prohibited payment and such
payment shall be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that, upon notice from the Trustee
to the holders of Senior Indebtedness
<PAGE>
52
that such prohibited payment has been made, the holders of the Senior
Indebtedness (or their representative or representatives or a trustee) within 30
days of receipt of such notice from the Trustee notify the Trustee of the
amounts then due and owing on the Senior Indebtedness, if any, and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
the Senior Indebtedness and any excess above such amounts due and owing on
Senior Indebtedness shall be paid to the Company.
SECTION 4.03. Payment over of Proceeds upon Dissolution, Etc.
----------------------------------------------
(a) Upon any payment or distribution of assets or securities of the
Company, as the case may be, of any kind or character, whether in cash, property
or securities, upon any dissolution or winding up or total or partial
liquidation or reorganization of the Company, whether voluntary or involuntary
or in bankruptcy, insolvency, receivership or other proceedings, all amounts due
or to become due upon all Senior Indebtedness (including any interest accruing
subsequent to an event specified in Section 7.01(d) or 7.01(e) of this
Indenture, whether or not such interest is an allowed claim enforceable against
the debtor under the United States Bankruptcy Code) shall first be paid in full,
in cash or cash equivalents, before the Noteholders or the Trustee on behalf of
the Noteholders shall be entitled to receive any payment of the Noteholders
shall be entitled to receive any payment by the Company on account of Senior
Subordinated Obligations, or any payment to acquire any of the Notes for cash,
property or securities, or any distribution with respect to the Notes of any
cash, property or securities. Before any payment may be made by, or on behalf
of, the Company of any Senior Subordinated Obligations upon any such
dissolution, winding up, liquidation or reorganization, any payment or
distribution of assets or securities of the Company of any kind or character,
whether in cash, property or securities, to which the Noteholders or the Trustee
on behalf of the Noteholders would be entitled, but for the provisions of this
Article Four, shall be made by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other similar Person making such
payment or distribution, or by the Noteholders or the Trustee if received by
them or it, directly to the holders of Senior Indebtedness (pro rata to such
--- ----
holders on the basis of the respective amounts of Senior Indebtedness held by
such holders) or their representatives, or to the trustee under the Senior Notes
Indenture, or to any trustee or trustees under any other indenture pursuant to
which any such Senior Indebtedness may have been issued, as their respective
interests appear, to the extent necessary to pay all such Senior Indebtedness in
full, in cash or cash equivalents after giving effect to any concurrent payment,
distribution or provision therefor to or for the holders of such Senior
Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether by or on
behalf of the Company, as proceeds of security or enforcement of any right of
setoff or otherwise) is declared to be fraudulent or preferential, set aside or
required to be paid to any receiver, trustee in bankruptcy, liquidating trustee,
agent or other similar Person under any bankruptcy, insolvency, receivership,
fraudulent conveyance or similar law, then if such payment is recovered by, or
paid over to, such receiver, trustee in bankruptcy, liquidating
<PAGE>
53
trustee, agent or other similar Person, the Senior Indebtedness or part thereof
originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred. To the extent the obligation
to repay any Senior Indebtedness is declared to be fraudulent, invalid, or
otherwise set aside under any bankruptcy, insolvency, receivership, fraudulent
conveyance or similar law, then the obligation so declared fraudulent, invalid
or otherwise set aside (and all other amounts that would come due with respect
thereto had such obligation not been so affected) shall be deemed to be
reinstated and outstanding as Senior Indebtedness for all purposes hereof as if
such declaration, invalidity or setting aside had not occurred.
(c) In the event that, notwithstanding the foregoing provision
prohibiting such payment or distribution, any payment or distribution of assets
or securities of the Company of any kind or character, whether in cash, property
or securities, shall be received by the Trustee or any Noteholder at a time when
such payment or distribution is prohibited by Section 4.03(a) of this Indenture
and before all obligations in respect of Senior Indebtedness are paid in full,
in cash or cash equivalents, such payment or distribution shall be received and
held in trust for the benefit of, and shall be paid over or delivered to, the
holders of Senior Indebtedness (pro rata to such holders on the basis of the
--- ----
respective amount of Senior Indebtedness held by such holders) or their
representatives, or to the trustees under the Senior Note Indentures, or to the
trustee or trustees under any other indenture pursuant to which any such Senior
Indebtedness may have been issued, as their respective interests appear, for
application to the payment of Senior Indebtedness remaining unpaid until all
such Senior Indebtedness has been paid in full, in cash or cash equivalents,
after giving effect to any concurrent payment, distribution or provision
therefor to or for the holders of such Senior Indebtedness.
(d) For purposes of this Section 4.03, the words "cash, property or
securities" shall not be deemed to include, so long as the effect of this clause
is not to cause the Securities to be treated in any case or proceeding or
similar event described in this Section 4.03 as part of the same class of claims
as the Senior Indebtedness or any class of claims pari passu with, or senior to,
---- -----
the Senior Indebtedness for any payment or distribution, securities of the
Company or any other corporation provided for by a plan of reorganization or
readjustment that are subordinated, at least to the extent that the Securities
are subordinated, to the payment of all Senior Indebtedness then outstanding;
provided that (1) if a new corporation results from such reorganization or
- --------
readjustment, such corporation assumes the Senior Indebtedness and (2) the
rights of the holders of the Senior Indebtedness are not, without the consent of
such holders, altered by such reorganization or readjustment. The consolidation
of the Company with, or the merger of the Company with or into, another
corporation or the liquidation or dissolution of the Company following the sale,
conveyance, transfer, lease or other disposition of all or substantially all of
its property and assets to another corporation upon the terms and conditions
provided in Article Twelve of this Indenture shall not be deemed a dissolution,
winding up, liquidation or reorganization for the
<PAGE>
54
purposes of this Section 4.03 if such other corporation shall, as a part of such
consolidation, merger, sale, conveyance, transfer, lease or other disposition,
comply with the conditions stated in Article Twelve of this Indenture.
SECTION 4.04. Subrogation. (a) Upon the payment in full of all
-----------
Senior Indebtedness in cash or cash equivalents, the Noteholders shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company made on
such Senior Indebtedness until the principal of, premium, if any, and interest
on the Notes shall be paid in full; and, for the purposes of such subrogation,
no payments or distributions to the holders of the Senior Indebtedness of any
cash, property or securities to which the Holders or the Trustee on their behalf
would be entitled except for the provisions of this Article Four, and no payment
pursuant to the provisions of this Article Four to the holders of Senior
Indebtedness by Noteholders or the Trustee on their behalf shall, as between the
Company, its creditors other than holders of Senior Indebtedness, and the
Noteholders, be deemed to be a payment by the Company to or on account of the
Senior Indebtedness. It is understood that the provisions of this Article Four
are intended solely for the purpose of defining the relative rights of the
Noteholders, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.
(b) If any payment or distribution to which the Noteholders would
otherwise have been entitled but for the provisions of this Article Four shall
have been applied, pursuant to the provisions of this Article Four, to the
payment of all amounts payable under Senior Indebtedness, then, and in such
case, the Noteholders shall be entitled to receive from the holders of such
Senior Indebtedness any payments or distributions received by such holders of
Senior Indebtedness in excess of the amount required to make payment in full, in
cash or cash equivalents, of such Senior Indebtedness of such holders.
SECTION 4.05. Obligations of Company Unconditional. (a) Nothing
------------------------------------
contained in this Article Four or elsewhere in this Indenture or in the Notes is
intended to or shall impair, as among the Company and the Noteholders, the
obligation of the Company, which is absolute and unconditional, to pay to the
Noteholders the principal of, premium, if any, and interest on the Notes as and
when the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Noteholders and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Noteholders or the Trustee on their
behalf from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
Four of the holders of the Senior Indebtedness.
(b) Without limiting the generality of the foregoing, nothing
contained in this Article Four will restrict the right of the Trustee or the
Noteholders to take any action to declare the Notes to be due and payable prior
to their Stated Maturity pursuant to
<PAGE>
55
Section 7.01 of this Indenture or to pursue any rights or remedies hereunder;
provided, however, that all Senior Indebtedness then due and payable or
- -------- -------
thereafter declared to be due and payable shall first be paid in full, in cash
or cash equivalents, before the Noteholders or the Trustee are entitled to
receive any direct or indirect payment from the Company of Senior Subordinated
Obligations.
SECTION 4.06. Notice to Trustee. The Company shall give prompt
-----------------
written notice to the Trustee of any fact known to the Company that would
prohibit the making of any payment to or by the Trustee in respect of the Notes
pursuant to the provisions of this Article Four. The Trustee shall not be
charged with knowledge of the existence of any default or event of default with
respect to any Senior Indebtedness or any other facts that would prohibit the
making of any payment to or by the Trustee unless and until the Trustee shall
have received notice in writing at its Principal Office to that effect signed by
an Officer of the Company, or by a holder of Senior Indebtedness, holder of
Senior Notes, or trustee or agent therefor; and prior to the receipt of any such
written notice, the Trustee shall, subject to Article Eight, be entitled to
assume that no such facts exist; provided that if the Trustee shall not have
--------
received the notice provided for in this Section 4.06 at least two Business Days
prior to the date upon which, by the terms of this Indenture, any monies shall
become payable for any purpose (including, without limitation, the payment of
the principal of, premium, if any, or interest on any Note), then,
notwithstanding anything herein to the contrary, the Trustee shall have full
power and authority to receive any monies from the Company and to apply the same
to the purpose for which they were received, and shall not be affected by any
notice to the contrary that may be received by it on or after such prior date
except for an acceleration of the Notes prior to such application. Nothing
contained in this Section 4.06 shall limit the right of the holders of Senior
Indebtedness to recover payments as contemplated by this Article Four. The
foregoing shall not apply if the Paying Agent is the Company. The Trustee shall
be entitled to rely on the delivery to it of a written notice by a Person
representing himself or itself to be a holder of any Senior Indebtedness (or a
trustee on behalf of, or other representative of, such holder) to establish that
such notice has been given by a holder of such Senior Indebtedness or a trustee
or representative on behalf of any such holder.
(b) In the event that the Trustee determines in good faith that any
evidence is required with respect to the right of any Person as a holder of
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article Four, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article Four and, if such evidence is not
furnished to the Trustee, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
<PAGE>
56
SECTION 4.07. Reliance on Judicial Order or Certificate of
--------------------------------------------
Liquidating Agent. Upon any payment or distribution of assets or securities
- -----------------
referred to in this Article Four, the Trustee and the Noteholders shall be
entitled to rely upon any order or decree may by any court of competent
jurisdiction in which bankruptcy, dissolution, winding up, liquidation or
reorganization proceedings are pending, or upon a certificate of the receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person making
such payment or distribution, delivered to the Trustee or to the Noteholders for
the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other Indebtedness of
the Company, the amount thereof payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
Four.
SECTION 4.08. Trustee's Relation to Senior Indebtedness. (a) The
-----------------------------------------
Trustee and any Paying Agent shall be entitled to all the rights set forth in
this Article Four with respect to any Senior Indebtedness that may at any time
be held by it in its individual or any other capacity to the same extent as any
other holder of Senior Indebtedness and nothing in this Indenture shall deprive
the Trustee or any Paying Agent of any of its rights as such holder.
(b) With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article Four, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness (except as provided in
Sections 4.02(c) and 4.03(c) of this Indenture) and shall not be liable to any
such holders if the Trustee shall in good faith mistakenly pay over or
distribute to Noteholders or to the Company or to any other Person cash,
property or securities to which any holders of Senior Indebtedness shall be
entitled by virtue of this Article Four or otherwise.
SECTION 4.09. Subordination Rights Not Impaired by Acts or Omissions
------------------------------------------------------
of the Company or Holders of the Senior Indebtedness. No right of any present
- ----------------------------------------------------
or future holders of any Senior Indebtedness to enforce subordination as
provided in this Article Four will at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms of this Indenture, regardless of any knowledge
thereof that any such holder may have or otherwise be charged with. The
provisions of this Article Four are intended to be for the benefit of, and shall
be enforceable directly by, the holders of Senior Indebtedness.
SECTION 4.10. Noteholders Authorize Trustee to Effectuate
-------------------------------------------
Subordination of Notes. Each Noteholder by his acceptance of any Notes
- ----------------------
authorizes and expressly directs the
<PAGE>
57
Trustee on its behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article Four, and appoints the
Trustee its attorney-in-fact for such purposes, including, in the event of
dissolution, winding up, liquidation or reorganization of the Company (whether
in bankruptcy, insolvency, receivership, reorganization or similar proceedings
or upon an assignment for the benefit of creditors or otherwise) tending towards
liquidation of the property and assets of the Company, the filing of a claim for
the unpaid balance of its Notes in the form required in those proceedings. If
the Trustee does not file a proper claim or proof of indebtedness in the form
required in such proceeding at least 30 days before the expiration of the time
to file such claim or claims, each holder of Senior Indebtedness is hereby
authorized to file an appropriate claim for and on behalf of the Noteholders.
SECTION 4.11. Not to Prevent Event of Default. The failure to make a
-------------------------------
payment on account of principal of, premium, if any, or interest on the
Securities by reason of any provision of this Article Four will not be construed
as preventing the occurrence of an Event of Default.
SECTION 4.12. Trustee's Compensation Not Prejudiced. Nothing in this
-------------------------------------
Article Four will apply to amounts due to the Trustee pursuant to other sections
of this Indenture.
SECTION 4.13. No Waiver of Subordination. Without in any way
--------------------------
limiting the generality of Section 4.09 of this Indenture, the holders of Senior
Indebtedness may, at any time and from time to time, without the consent of or
notice to the Trustee or the Noteholders, without incurring responsibility to
the Holders and without impairing or releasing the subordination provided in
this Article Four or the obligations hereunder of the Noteholders to the holders
of Senior Indebtedness, do any one or more of the following: (a) change the
manner, place or terms of payment or extent the time of payment of, or renew or
alter, Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding or secured; (b) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (c) release any Person liable in any
manner for the collection of Senior Indebtedness; and (d) exercise or refrain
from exercising any rights against the Company and any other Person.
SECTION 4.14. Payments May Be Paid Prior to Dissolution. Nothing
-----------------------------------------
contained in this Article Four or elsewhere in this Indenture shall prevent (i)
the Company, except under the conditions described in Section 4.02 or 4.03 of
this Indenture, from making payments of principal of, premium, if any, and
interest on the Notes, or from depositing with the Trustee any money for such
payments, or (ii) the application by the Trustee of any money deposited with it
for the purpose of making such payments of principal of, premium, if any, and
interest on the Notes to the holders entitled thereto unless, at least two
Business Days prior to the date upon which such payment becomes due and payable,
the Trustee shall
<PAGE>
58
have received the written notice provided for in Section 4.02(b) of this
Indenture (or there shall have been an acceleration of the Notes prior to such
application) or in Section 4.06 of this Indenture. The Company shall give
prompt written notice to the Trustee of any dissolution, winding up, liquidation
or reorganization of the Company.
SECTION 4.15. Consent of Holders of Senior Indebtedness Under the
---------------------------------------------------
U.S. Credit Agreement. The provisions of this Article Four (including the
- ---------------------
definitions contained in this Article and references to this Article contained
in this Indenture) shall not be amended in a manner that would adversely affect
the rights of the holders of Senior Indebtedness under the U.S. Credit
Agreement, and no such amendment shall become effective unless the holders of
Senior Indebtedness under the U.S. Credit Agreement shall have consented (in
accordance with the provisions of the U.S. Credit Agreement) to such amendment.
ARTICLE FIVE
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.01. Payment of Principal, Premium and Interest. The
------------------------------------------
Company covenants and agrees that it will duly and punctually pay or cause to be
paid the principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price, Fundamental Change Redemption Price and interest in
respect of each of the Notes at the places, at the respective times and in the
manner provided herein and in the Notes. Each installment of interest on the
Notes may be paid by mailing checks for the interest payable to or upon the
written order of the holders of Notes entitled thereto as they shall appear on
the registry books of the Company, provided that with respect to any holder of
--------
Notes with an aggregate principal amount at maturity equal to or in excess of $5
million, at the request of such holder on or prior to the record date in writing
(such writing to include appropriate wire instructions) the Company shall pay
interest on such holder's Notes by wire transfer in immediately available funds.
SECTION 5.02. Offices for Notices and Payments, Etc. So long as any
-------------------------------------
of the Notes remain outstanding, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where the Notes may be
presented for payment, and an office or agency where the Notes may be presented
for registration of transfer and for exchange and conversion as provided for in
this Indenture and an office or agency where notices and demands to or upon the
Company in respect of the Notes or of this Indenture may be served. The Company
will give to the Trustee written notice of the location of each such office or
agency and of any change of location thereof. If the Company shall fail to
maintain any such office or agency or shall fail to give such notice of the
location or of any change in the location thereof, presentations and demands may
be made and notices may be served at the principal office of the Trustee and the
Company hereby appoints the Trustee at
<PAGE>
59
the principal office of the Trustee as its agent to receive all such
presentations, demands and notices.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided
--------
that no such designation or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York, for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
The Company hereby initially designates the Trustee as Paying Agent,
Registrar and conversion agent and the Principal Office of the Trustee at 101
Barclay Street, New York, New York 10286, as one such office or agency of the
Company for each of the aforesaid purposes.
So long as the Trustee is the Registrar, the Trustee agrees to mail,
or cause to be mailed, if and when required, the notice set forth in Section
8.09(a).
SECTION 5.03. Appointments to Fill Vacancies in Trustee's Office.
--------------------------------------------------
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 8.09, a Trustee, so
that there shall at all times be a Trustee hereunder.
SECTION 5.04. Provision as to Paying Agent. (a) If the Company
----------------------------
shall appoint a Paying Agent other than the Trustee or an affiliate of the
Trustee, it will cause such Paying Agent to execute and deliver to the Trustee
an instrument in which such agent shall agree with the Trustee, subject to the
provisions of this Section 5.04:
(1) that it will hold all sums held by it as such agent for the
payment of the principal amount at maturity, Issue Price, accrued Original
Issue Discount, Redemption Price, Fundamental Change Redemption Price or
interest in respect of the Notes (whether such sums have been to it by the
Company or by any other obligor on the Notes) in trust for the benefit of
the holders of the Notes;
(2) that it will give the Trustee notice of any failure by the Company
(or by any other obligor on the Notes) to make any payment of the principal
amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price or interest in
respect of the Notes when the same shall be due and payable; and
<PAGE>
60
(3) that at any time during the continuance of an Event of Default,
upon request of the Trustee, it will forthwith pay to the Trustee all sums
so held in trust.
The Company shall, before each due date of the principal amount at
maturity, Issue Price, accrued Original Issue Discount, Redemption Price,
Fundamental Change Redemption Price or interest in respect of the Notes, deposit
with the Paying Agent a sum sufficient to pay such amounts so becoming due, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of any failure to take such action.
(b) If the Company shall act as its own Paying Agent, it will, on or
before each due date of the principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change Redemption Price
or interest in respect of the Notes, set aside, segregate and hold in trust for
the benefit of the holders of the Notes a sum sufficient to pay such amounts so
becoming due and will notify the Trustee of any failure to take such action and
of any failure by the Company (or by any other obligor under the Notes) to make
any payment of the principal amount at maturity, Issue Price, accrued Original
Issue Discount, Redemption Price, Fundamental Change Redemption Price or
interest in respect of the Notes when the same shall become due and payable.
(c) Anything in this Section 5.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose at obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any Paying Agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any Paying Agent
to the Trustee, the Company or such Paying Agent shall be released from all
further liability with respect to such money.
(d) Anything in this Section 5.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.04 is subject to
Sections 13.03 and 13.04.
SECTION 5.05. Limitation on Senior Subordinated Indebtedness. The
----------------------------------------------
Company will not Incur any Indebtedness, other than the Notes, that is expressly
made subordinate in right of payment to any Senior Indebtedness unless such
Indebtedness, by its terms or by the terms of any agreement or instrument
pursuant to which such Indebtedness is issued, is expressly made pari passu
---- -----
with, or subordinated in right of payment to, the Notes pursuant to provisions
substantially similar to those contained in Article Four of the Indenture;
provided, however, that the foregoing limitation shall not apply to distinctions
- -------- -------
between categories of Senior Indebtedness that exist by reason of any liens or
Guarantees arising or created in respect of some but not all Senior
Indebtedness. The Notes are hereby expressly made pari passu with the 12 1/4%
---- -----
Debentures.
<PAGE>
61
SECTION 5.06. Calculation of Original Issue Discount. The Company
--------------------------------------
shall file with the Trustee promptly at the end of each calendar year a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on outstanding Notes as of the end of such year.
SECTION 5.07. Notice of Defaults. In the event that the Company
------------------
becomes aware of any default or Event of Default the Company, promptly after it
becomes aware thereof, will give written notice thereof to the Trustee.
SECTION 5.08. Compliance Certificates. The Company shall deliver to
-----------------------
the Trustee, within 45 days after the end of each fiscal quarter (90 days after
the end of the last fiscal quarter of each year), an Officers' Certificate
stating whether or not the signers know of any default or Event of Default that
occurred during such fiscal quarter. In the case of the Officers' Certificate
delivered within 90 days of the end of the Company's fiscal year, such
certificate shall contain a certification from the principal executive officer,
principal financial officer or principal accounting officer that a review has
been conducted of the activities of the Company and its subsidiaries and the
Company's and its subsidiaries' performance under this Indenture and that the
Company has complied with all conditions and covenants under this Indenture.
For purposes of this Section 5.08, such compliance shall be determined without
regard to any period of grace or requirement of notice provided under this
Indenture. If they do know of such a default or Event of Default, the
certificate shall describe any such default or Event of Default and its status.
The first certificate to be delivered pursuant to this Section 5.08 shall be for
the first fiscal quarter beginning after the execution of this Indenture.
ARTICLE SIX
NOTEHOLDERS' LISTS AND
REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 6.01. Noteholders' Lists. The Company covenants and agrees
------------------
that it will furnish or cause to be furnished to the Trustee, semi-annually, not
more than 15 days after each May 15 and November 15 in each year beginning with
May 15, 1996, and at such other times as the Trustee may request in writing,
within thirty days after receipt by the Company of any such request, a list in
such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen days prior to the time
such information is furnished, except that no such list need be furnished so
long as the Trustee is acting as Registrar.
SECTION 6.02. Preservation of Lists. The Trustee shall preserve, in
---------------------
as current a form as is reasonably practicable, all information as to the names
and addresses of
<PAGE>
62
the holders of Notes contained in the most recent list furnished to it as
provided in Section 6.01 or maintained by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 6.01 upon receipt of a new list so furnished.
If the Trustee shall be required by law to disclose any information
contained in any list of Noteholders maintained by it, then each and every
holder of the Notes, by receiving and holding the same, agrees with the Company
and the Trustee that neither the Company nor the Trustee nor any Paying Agent
nor the Registrar shall be held accountable by reason of the disclosure of any
such information, regardless of the source from which such information was
derived.
ARTICLE SEVEN
REMEDIES OF THE TRUSTEE AND
---------------------------
NOTEHOLDERS IN THE EVENT OF DEFAULT
SECTION 7.01. Events of Default. In case one or more of the
-----------------
following Events of Default (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall have occurred and
be continuing:
(a) default in the payment of any installment of interest upon any of
the Notes as and when the same shall become due and payable, and
continuance of such default for a period of thirty days; or
(b) default in the payment of the principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, or Fundamental
Change Redemption Price in respect of any of the Notes as and when the same
shall become due and payable either at maturity, in connection with any
redemption pursuant to Article Three or Sixteen, by declaration or
otherwise; or
(c) failure on the part of the Company duly to observe or perform any
of the covenants or agreements on the part of the Company in the Notes or
in this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section specifically dealt
with) continued for a period of forty-five days after the date on which
written notice of such failure, requiring the Company to remedy the same,
shall have been given to the Company by the Trustee, or to the Company and
the Trustee by the holders of at least twenty-five
<PAGE>
63
percent in aggregate principal amount at maturity of the Notes at the time
outstanding; or
(d) the Company shall have commenced a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect
to itself or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official of it or any
substantial part of its property, or shall have consented to any such
relief or to the appointment of or taking possession by any such official
in an involuntary case or other proceeding commenced against it, or shall
make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or
(e) an involuntary case or other proceeding shall be commenced against
the Company seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of sixty
consecutive days;
then and in each and every such case (other than an Event of Default specified
in Section 7.01(d) or (e)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than twenty-five percent in aggregate principal amount at maturity of the Notes
then outstanding hereunder, by notice in writing to the Company (and to the
Trustee if given by Noteholders), may declare due and immediately payable the
sum of the Issue Price plus accrued Original Issue Discount from the date of
original issue of the Notes to the date of declaration and the interest accrued
thereon, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.01(d) or (e) occurs and is continuing, the Issue Price of the Notes
plus the Original Issue Discount accrued thereon to the occurrence of such Event
of Default shall be immediately due and payable. The acceleration referred to in
the preceding two sentences, however, is subject to the condition that if, at
any time after the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon all the Notes and principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, and Fundamental Change
Redemption Price in respect of any and all Notes which shall have become due
otherwise than by acceleration (with interest on overdue installments of
interest (to the extent that payment of such interest is enforceable under
applicable law) and on such
<PAGE>
64
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price and Fundamental Change Redemption Price at the rate borne by
the Notes (treating the accrual of Original Issue Discount as if it were
interest), to the date of such payment or deposit) and amounts due to the
Trustee pursuant to Section 8.06, and if any and all defaults under this
Indenture, other than the nonpayment of principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price and interest, in respect of the Notes which shall have become
due by acceleration, shall have been cured or waived pursuant to Section 7.07,
then and in every such case the holders of a majority in aggregate principal
amount at maturity of the Notes then outstanding, by written notice to the
Company and to the Trustee, may waive all defaults and Events of Default and
rescind and annul such declaration and its consequences; but no such waiver or
rescission and annulment shall extend to or shall affect any subsequent default
or Event of Default, or shall impair any right consequent thereon. The Trustee
shall not be charged with knowledge and shall not be deemed to have notice of
any default or Event of Default, except an Event of Default under Section
7.01(a) or (b) in cases where the Trustee is acting as Paying Agent, unless
written notice thereof stating that such notice is a "Notice of Default" shall
have been given to a Responsible Officer by the Company or a Noteholder or any
agent of a Noteholder; and, in the absence of such written notice, the Trustee
may conclusively assume that there is no default or Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such rescission or annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.
SECTION 7.02. Payment of Notes on Default; Suit Therefor. The
------------------------------------------
Company covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall become
due and payable, and such default shall have continued for a period of thirty
days, or (b) in case default shall be made in the payment of the principal
amount at maturity, Issue Price, accrued Original Issue Discount, Redemption
Price, or Fundamental Change Redemption Price in respect of any of the Notes as
and when the same shall have become due and payable, whether at maturity of the
Notes, in connection with any redemption of a Note pursuant to Article Three or
Sixteen, by declaration or otherwise, then, upon demand of the Trustee, the
Company will pay to the Trustee, for the benefit of the holders of the Notes,
the whole amount that then shall have become due and payable on all such Notes
for principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price, or interest, or both, as
the case may be, with interest upon the overdue principal amount at maturity,
Issue Price, accrued Original Issue Discount, Redemption Price and Fundamental
<PAGE>
65
Change Redemption Price and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest at
the rate borne by the Notes (treating the accrual of Original Issue Discount as
if it were interest); and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any expenses
or liabilities incurred by the Trustee hereunder other than through its
negligence or bad faith. Until such demand by the Trustee, the Company may pay
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price and interest in respect of
the Notes to the registered holders, whether or not the Notes are overdue.
In case the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the amounts adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company, the property of the Company or such other obligor, or
in the case of any other similar judicial proceedings relative to the Company or
other obligor upon the Notes, or to the creditors or property of the Company or
such other obligor, the Trustee, irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section 7.02, shall be entitled and
empowered, by intervention in such proceedings or otherwise, to file and prove a
claim or claims for the whole amount of principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price and interest owing and unpaid in respect of the Notes, and, in
case of any judicial proceedings, to file such proofs of claim and other papers
or documents as may be necessary or advisable in order to have the claims of the
Trustee and of the Noteholders allowed in such judicial proceedings relative to
the Company or any other obligor on the Notes, its or their creditors, or its or
their property, and to collect and receive any monies or other property payable
or deliverable on any such claims, and to distribute the same after the
deduction of any amounts due the Trustee under Section 8.06; and any receiver,
assignee or trustee in bankruptcy or reorganization liquidator, custodian or
similar official is hereby authorized by each of the Noteholders to make such
payments to the
<PAGE>
66
Trustee, and, if the Trustee shall consent to the making of such payments
directly to the Noteholders, to pay to the Trustee any amount due it for
compensation, expenses, advances and disbursements including counsel fees and
expenses incurred by it up to the date of such distribution. To the extent that
such payment of reasonable compensation, expenses, advances and disbursements
out of the estate in any such proceedings shall be denied for any reason,
payment of the same shall be secured by a lien on, and shall be paid out of, any
and all distributions, dividends, monies, securities and other property which
the holders of the Notes may be entitled to receive in such proceedings, whether
in liquidation or under any plan of reorganization or arrangement or otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or adopt on behalf of any Noteholder any plan of
reorganization or arrangement, affecting the Notes or the rights of any
Noteholder, or to authorize the Trustee to vote in respect of the claim of any
Noteholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof in any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel, be
for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.
SECTION 7.03. Application of Monies Collected by Trustee. Any monies
------------------------------------------
collected by the Trustee pursuant to this Article Seven shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection and
reasonable compensation to the Trustee, its agents, attorneys and counsel,
and of all other expenses and liabilities incurred, and all advances made,
by the Trustee except as a result of its negligence or bad faith;
Second: Subject to the provisions of Article Four, in case the
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price or Fundamental Change Redemption Price in respect of the
outstanding Notes shall
<PAGE>
67
not have become due and be unpaid, to the payment of interest on the Notes
in default in the order of the maturity of the installments of such
interest, with interest (to the extent that such interest has been
collected by the Trustee) upon the overdue installments of interest at the
rate borne by the Notes (treating the accrual of Original Issue Discount as
if it were interest), such payments to be made ratably to the Persons
entitled thereto;
Third: Subject to the provisions of Article Four, in case the
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price or Fundamental Change Redemption Price in respect of the
outstanding Notes shall have become due, by declaration or otherwise, and
be unpaid, to the payment of the whole amount then owing and unpaid upon
the Notes for principal amount at maturity, Issue Price, accrued Original
Issue Discount, Redemption Price, Fundamental Change Redemption Price and
interest with interest on the overdue principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price and Fundamental
Change Redemption Price, and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest at the rate
borne by the Notes (treating the accrual of Original Issue Discount as if
it were interest); and in case such monies shall be insufficient to pay in
full the whole amounts so due and unpaid upon the Notes, then to the
principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price and interest without
preference or priority of principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price or Fundamental Change
Redemption Price over interest, or of interest over principal amount at
maturity, Issue Price, accrued Original Issue Discount, Redemption Price or
Fundamental Change Redemption Price or of any installment of interest over
any other installment of interest, or of any Note over any other Note,
ratably to the aggregate of such principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price and accrued and unpaid interest;
Fourth: Subject to the provisions of Article Four, to the payment of
the remainder, if any, to the Company or any other Person lawfully entitled
thereto.
SECTION 7.04. Proceedings by Noteholder. No holder of any Note shall
-------------------------
have any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of default and of the continuance thereof, as hereinbefore provided, and
unless also the holders of not less than twenty-five percent in aggregate
principal amount at maturity of the Notes then outstanding shall have made
written request upon the Trustee to
<PAGE>
68
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Trustee for sixty days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding and no direction inconsistent with such written
request shall have been given to the Trustee pursuant to Section 7.07; it being
understood and intended, and being expressly covenanted by the taker and holder
of every Note with every other taker and holder of a Note and the Trustee, that
no one or more holders of Notes shall have any right in any manner whatever by
virtue of or by availing of any provision of this Indenture to affect, disturb
or prejudice the rights of any other holder of Notes, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of outstanding Notes (except as
otherwise provided herein). For the protection and enforcement of this Section
7.04, each and every Noteholder and the Trustee shall be entitled to all such
relief as can be given either at law or in equity.
Notwithstanding any other provisions of this Indenture and any
provision of any Note, however, the right of any holder of any Note to receive
payment of the principal amount at maturity, Issue Price, accrued Original Issue
Discount, Redemption Price or Fundamental Change Redemption Price with respect
to such Note, on or after the respective due dates expressed in such Note, or to
institute suit for the enforcement of any such payment on or after such
respective dates against the Company shall not be impaired or affected without
the consent of such holder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in his own behalf and for his own
benefit may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
SECTION 7.05. Proceedings by Trustee. In case of an Event of Default
----------------------
hereunder the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
SECTION 7.06. Remedies Cumulative and Continuing. Except as provided
----------------------------------
in Section 2.10, all powers and remedies given by this Article Seven to the
Trustee or to the Noteholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of
<PAGE>
69
the Notes, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture, and no
delay or omission of the Trustee or of any holder of any of the Notes to
exercise any right or power accruing upon any default or Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 7.04, every power and remedy
given by this Article Seven or by law to the Trustee or to the Noteholders may
be exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Noteholders.
SECTION 7.07. Direction of Proceedings and Waiver of Defaults by
--------------------------------------------------
Majority Noteholders. The holders of a majority in aggregate principal amount
- --------------------
at maturity of the Notes at the time outstanding determined in accordance with
Section 9.04 shall have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee; provided, however, (a) such
-------- -------
direction shall not be in conflict with any rule of law or with this Indenture
and (b) that (subject to the provisions of Section 8.01) the Trustee shall have
the right to decline to follow any such direction if the Trustee shall be
advised by counsel that the action or proceeding so directed may not lawfully be
taken or if the Trustee in good faith by its board of directors or executive
committee, or a trust committee of directors and/or Responsible Officers shall
determine that the action or proceedings so directed could involve the Trustee
in personal liability. Prior to any declaration accelerating the maturity of
the Notes, the holders of a majority in aggregate principal amount at maturity
of the Notes at the time outstanding may on behalf of the holders of all of the
Notes waive any past default or Event of Default hereunder and its consequences
except (i) a default in the payment of principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price or interest in respect of the Notes, (ii) a failure by the
Company to convert any Notes into Common Stock or (iii) a default in respect of
a covenant or provision hereof which under Article Eleven cannot be modified or
amended without the consent of the holders of all Notes then outstanding. Upon
any such waiver the Company, the Trustee and the holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon. Whenever any default or Event of
Default hereunder shall have been waived as permitted by this Section 7.07, said
default or Event of Default shall for all purposes of the Notes and this
Indenture be deemed to have been cured and to be not continuing; but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 7.08. Notice of Defaults. The Trustee shall, within ninety
------------------
days after the occurrence of a default, mail to all Noteholders, as the names
and addresses of such holders appear upon the registry books of the Company,
notice of all defaults known to the Trustee, unless such defaults shall have
been cured or waived before the giving of such
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70
notice (the term "defaults," with respect to the Notes and the Indentures being
hereby defined to be an event or condition that, after the giving of notice or
the passage of time or both would become an Event of Default; and provided that,
--------
except in the case of default in the payment of the principal amount at
maturity, Issue Price, accrued Original Issue Discount, Redemption Price,
Fundamental Change Redemption Price or interest in respect of any of the Notes,
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Noteholders.
SECTION 7.09. Undertaking to Pay Costs. All parties to this
------------------------
Indenture agree, and each holder of any Note by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken or omitted by it as Trustee, the filing
by any party litigant in such suit of an undertaking to pay the costs of such
suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section 7.09 shall not
--------
apply to any suit instituted by the Trustee, to any suit instituted by any
Noteholder, or group of Noteholders, holding in the aggregate more than ten
percent in principal amount at maturity of the Notes outstanding, or to any suit
instituted by any Noteholder for the enforcement of the payment of the principal
amount at maturity, Issue Price, accrued Original Issue Discount, Redemption
Price, Fundamental Change Redemption Price and interest in respect of any Note
on or after the due date expressed in such Note or to any suit for the
enforcement of the right to convert any Note in accordance with the provisions
of Article Fifteen.
ARTICLE EIGHT
CONCERNING THE TRUSTEE
SECTION 8.01. Duties and Responsibilities of Trustee. The Trustee,
--------------------------------------
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived) the Trustee
shall exercise such of the rights and powers vested in it by this Indenture,
using the same degree of care and skill in their exercise as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
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71
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Indenture, and the Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless it
shall be proved that the Trustee was negligent in ascertaining the
pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount at maturity
of the Notes at the time outstanding determined as provided in Section 9.04
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture; and
(d) whether or not therein provided, every provision of this Indenture
relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this
Section.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
redemption of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
<PAGE>
72
SECTION 8.02. Reliance on Documents, Opinions, Etc. Except as
------------------------------------
otherwise provided in Section 8.01,
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, coupon or other paper or document
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless
other evidence in respect thereof be herein specifically prescribed); and
any resolution of the Board of Directors may be evidenced to the Trustee by
a copy thereof certified by the Secretary or an Assistant Secretary of the
Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in
good faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred by the Trustee therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, debenture, coupon or other paper
or document unless requested in writing to do so by the holders of not less
than a majority in principal amount at maturity of the Notes then
outstanding; provided, however, that if the payment within a reasonable
-------- -------
time to the Trustee of the costs, expenses or liabilities likely to be
incurred by it in the making of such investigation is, in the opinion of
the Trustee, not reasonably assured to the Trustee by the security afforded
to it by the terms of this Indenture, the Trustee may require reasonable
indemnity against such expense or liability as a condition to so
proceeding; the reasonable expenses of every such examination shall
<PAGE>
73
be paid by the Company or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due
care hereunder.
SECTION 8.03. No Responsibility for Recitals, Etc. The recitals
-----------------------------------
contained herein and in the Notes (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
SECTION 8.04. Trustee, Paying Agents, Conversion Agents or Registrar
------------------------------------------------------
May Own Notes. The Trustee, any Paying Agent, any conversion agent or
- -------------
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
Paying Agent, conversion agent or Registrar.
SECTION 8.05. Monies to Be Held in Trust. Subject to the provisions
--------------------------
of Section 13.04, all monies received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except to the extent otherwise agreed in writing by the Company and the Trustee.
SECTION 8.06. Compensation and Expenses of Trustee. The Company
------------------------------------
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation as shall be agreed upon in writing for
all services rendered by it hereunder in any capacity (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), and the Company will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify each of the Trustee and any predecessor
trustee for, and to hold it harmless against, any and all loss, damage, claim,
liability or expense, including taxes (other than taxes based on the income of
the Trustee or such predecessor trustee) incurred without negligence or bad
faith
<PAGE>
74
on the part of the Trustee or such predecessor trustee and arising out of or in
connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim of liability in the
premises. The obligations of the Company under this Section 8.06 to compensate
or indemnify the Trustee or such predecessor trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall be secured by a lien
prior to that of the Notes upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the holders of
particular Notes. The obligation of the Company under this Section shall
survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 7.01(d) or Section 7.01(e), the
expenses and the compensation for the services are intended to constitute
expenses of administration under Title 11 of the United States Bankruptcy Code
or any applicable federal or state law for the relief of debtors.
SECTION 8.07. Officers' Certificate as Evidence. Except as otherwise
---------------------------------
provided in Section 8.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee, and such Certificate, in the absence of
negligence or bad faith on the part of the Trustee, shall be full warrant to the
Trustee for any action taken or omitted by it under the provisions of this
Indenture upon the faith thereof.
SECTION 8.08. Eligibility of Trustee. The Trustee hereunder shall at
----------------------
all times be a corporation organized and doing business under the laws of the
United States or any State or Territory thereof or of the District of Columbia
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least fifty million dollars, subject to supervision or
examination by Federal, State, Territorial or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 8.08, the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 8.08, the Trustee shall resign immediately in the
manner and with the effect specified in Section 8.09.
SECTION 8.09. Resignation or Removal of Trustee. (a) The Trustee
---------------------------------
may at any time resign by giving written notice of such resignation to the
Company and by mailing notice thereof to the holders of Notes at their addresses
as they shall appear on the books of
<PAGE>
75
the Company. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee by written instrument, in duplicate,
executed by order of the Board of Directors, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor Trustee. If
no successor trustee shall have been so appointed and have accepted appointment
within sixty days after the mailing of such notice of resignation to the
Noteholders, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee, or any Noteholder who
has been a bona fide holder of a Note or Notes for at least six months may,
subject to the provisions of Section 7.09, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall cease to be eligible in accordance with the
provisions of Section 8.08 and shall fail to resign after written request
therefor by the Company or by any such Noteholder, or
(2) the Trustee shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its property
shall be appointed, or any public officer shall take charge or control of
the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee. If no successor
Trustee shall have been so appointed and have accepted appointment within sixty
days after the mailing of such notice of removal to the Noteholders, the Trustee
so removed may petition any court of competent jurisdiction for the appointment
of a successor Trustee, or any Noteholder who has been a bona fide holder of a
Note or Notes for at least six months may, subject to the provisions of Section
7.09, any Noteholder who has been a bona fide holder of a Note or Notes for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount at
maturity of the Notes at the time outstanding may at any time remove the Trustee
and nominate a successor trustee which shall be deemed appointed as successor
trustee unless within ten days after notice to the Company of such nomination
the Company objects thereto, in which case the Trustee so removed or any
Noteholder, upon the terms and conditions and otherwise as
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76
in subsection (a) of this Section 8.09 provided, may petition any court of
competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee to any of the provisions of this Section 8.09 shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.10.
SECTION 8.10. Acceptance by Successor Trustee. Any successor trustee
-------------------------------
appointed as provided in Section 8.09 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
8.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property or funds held or collected by such
trustee to secure any amounts then due it pursuant to the provisions of Section
8.06.
No successor trustee shall accept appointment as provided in this
Section 8.10 unless at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.08.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.10, the Trustee shall mail notice of its succession hereunder to
the holders of Notes at their addresses as they shall appear on the books of the
Company, at the expense of the Company.
SECTION 8.11. Succession by Merger, Etc. Any corporation into which
-------------------------
the Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor to the Trustee hereunder, provided such corporation shall be eligible
under the provisions of Section 8.08, without the execution or filing of any
paper or any further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been authenticated
but not delivered,
<PAGE>
77
any such successor to the Trustee may adopt the certificate of authentication of
any predecessor Trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
the Trustee appointed by such successor Trustee may authenticate such Notes
either in the name of any predecessor hereunder or in the name of the successor
trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Notes or in this Indenture provided that the certificate
of the Trustee shall have; provided, however, that the right to adopt the
-------- -------
certificate of authentication of any predecessor Trustee or authenticate Notes
in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
ARTICLE NINE
CONCERNING THE NOTEHOLDERS
SECTION 9.01. Action by Noteholders. Whenever in this Indenture it
---------------------
is provided that the holders of a specified percentage in aggregate principal
amount at maturity of the Notes may take any action (including the making of any
demand or request, the giving of any notice, consent or waiver or the taking of
any other action), the fact that at the time of taking any such action the
holders of such specified percentage have joined therein may be evidenced (a) by
any instrument or any number of instruments executed by Noteholders in Person or
by agent or proxy appointed in writing, or (b) by the record of the holders of
Notes voting in favor thereof at any meeting of Noteholders duly called and held
in accordance with the provisions of Article Ten, or (c) by a combination of
such instrument or instruments and any such record of such a meeting of
Noteholders. Whenever the Company or the Trustee solicits the taking of any
action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than 15 days
prior to the date of commencement of solicitation of such action.
SECTION 9.02. Proof of Execution by Noteholders. Subject to the
---------------------------------
provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of any
instrument by a Noteholder or his agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Registrar.
The records of any Noteholders' meeting shall be proved in the manner
provided in Section 10.06.
<PAGE>
78
SECTION 9.03. Persons Who Are Deemed Absolute Owners. The Company,
--------------------------------------
the Trustee, any Paying Agent, any conversion agent and any Registrar may deem
the Person in whose name such Note shall be registered upon the books of the
Company to be, and may treat him as, the absolute owner of such Note (whether or
not such Note shall be overdue and notwithstanding any notation of ownership or
other writing thereon) for the purpose of receiving payment of or on account of
the principal amount at maturity, Issue Price, accrued Original Issue Discount,
Redemption Price, Fundamental Change Redemption Price and interest in respect of
such Note, for conversion of such Note and for all other purposes; and neither
the Company nor the Trustee nor any Paying Agent nor any conversion agent nor
any Registrar shall be affected by any notice to the contrary. All such
payments so made to any holder for the time being, or upon his order, shall be
valid, and, to the extent of the sum or sums so paid, effectual to satisfy and
discharge the liability for monies payable upon any such Note.
SECTION 9.04. Company-Owned Notes Disregarded. In determining
-------------------------------
whether the holders of the requisite aggregate principal amount at maturity of
Notes have concurred in any direction, consent, waiver or other action under
this Indenture, Notes which are owned by the Company or any other obligor on the
Notes or by any Affiliate of any such Person shall be disregarded and deemed not
to be outstanding for the purpose of any such determination; provided that for
--------
the purposes of determining whether the Trustee shall be protected in relying on
any such direction, consent, waiver or other action only Notes which a
Responsible Officer actually knows are so owned shall be so disregarded. Notes
so owned which have been pledged in good faith may be regarded as outstanding
for the purposes of this Section 9.04 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right to vote such Notes and that the
pledgee is not the Company, any other obligor on the Notes or any Affiliate of
the Company or any such other obligor. In the case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Notes, if any, known by the Company to be owned or held by or for the
account of any of the above described Persons; and, subject to Section 8.01, the
Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Notes not
listed therein are outstanding for the purpose of any such determinations.
SECTION 9.05. Revocation of Consents; Future Holders Bound. At any
--------------------------------------------
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 9.01, of the taking of any action by the holders of the percentage in
aggregate principal amount at maturity of the Notes specified in this Indenture
in connection with such action, any holder of a Note which is shown by the
evidence to be included in the Notes the holders of which have consented to such
action may, by filing written notice with the Trustee at its Principal Office
and upon proof of holding as provided in Section 9.02, revoke such action so far
as concerns such Note. Except as aforesaid any such action taken by the holder
of any Note
<PAGE>
79
shall be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
ARTICLE TEN
NOTEHOLDERS' MEETINGS
SECTION 10.01. Purposes of Meetings. A meeting of Noteholders may be
--------------------
called at any time and from time to time pursuant to the provisions of this
Article Ten for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or to give any
directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized to
be taken by Noteholders pursuant to any of the provisions of Article Seven;
(2) to remove the Trustee and nominate a successor trustee pursuant to
the provisions of Article Eight;
(3) to consent to the execution of an indenture or indentures
supplemental hereto pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to be taken by or on behalf of
the holders of any specified aggregate principal amount at maturity of the
Notes under any other provision of this Indenture or under applicable law.
SECTION 10.02. Call of Meetings by Trustee. The Trustee may at any
---------------------------
time call a meeting of Noteholders to take any action specified in Section
10.01, to be held at such time and at such place as the Trustee shall determine.
Notice of every meeting of the Noteholders, setting forth the time and the place
of such meeting and in general terms the action proposed to be taken at such
meeting and the establishment of any record date pursuant to Section 9.01, shall
be mailed to holders of Notes at their addresses as they shall appear on the
registry books of the Company. Such notice shall also be mailed to the Company.
Such notices shall be mailed not less than ten nor more than ninety days prior
to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the
holders of all Notes then outstanding are present in person or by proxy or if
notice is waived before or after the meeting by the holders of all Notes
outstanding, and if the Company and the
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80
Trustee are either present by duly authorized representatives or have, before or
after the meeting, waived notice.
SECTION 10.03. Call of Meetings by Company or Noteholders. In case
------------------------------------------
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least ten percent in aggregate principal amount at maturity of
the Notes then outstanding, shall have requested the Trustee to call a meeting
of Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within ten days after receipt of such request, then the
Company or such Noteholders may determine the time and the place for such
meeting and may call such meeting to take any action authorized in Section
10.01, by mailing notice thereof as provided in Section 10.02.
SECTION 10.04. Qualifications for Voting. Subject to Section 9.04,
-------------------------
to be entitled to vote at any meeting of Noteholders a Person shall (a) be a
holder of one or more Notes on the record date pertaining to such meeting or (b)
be a Person appointed by an instrument in writing as proxy by such a holder of
one or more Notes. The only Persons who shall be entitled to be present or to
speak at any meeting of Noteholders shall be the Persons entitled to vote at
such meeting and their counsel and any representatives of the Trustee and its
counsel and any representatives of the Company and its counsel.
SECTION 10.05. Regulations. Notwithstanding any other provisions of
-----------
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders of a majority
in principal amount at maturity of the Notes represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 9.04, at any meeting each
Noteholder or proxy holder shall be entitled to one vote for each $1,000
principal amount at maturity of Notes held or represented by it; provided,
--------
however, that no vote shall be cast or counted at any meeting in respect of any
- -------
Note challenged as not outstanding and ruled by the chairman of the meeting to
be not outstanding. The chairman of the meeting shall have no right to vote
other than by virtue of Notes held by him or instruments in writing as aforesaid
duly
<PAGE>
81
designating him as the Person to vote on behalf of other Noteholders. Any
meeting of Noteholders duly called pursuant to the provisions of Section 10.02
or 10.03 may be adjourned from time to time by a majority of the aggregate
principal amount of Notes represented at the meeting, whether or not
constituting a quorum, and the meeting may be held as so adjourned without
further notice.
SECTION 10.06. Voting. The vote upon any resolution submitted to any
------
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the principal amount at maturity of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more Persons having knowledge of the facts and showing that
said notice was mailed as provided in Section 10.02 and attaching a copy of such
notice thereto. The record shall show the principal amount at maturity of the
Notes voting in favor of or against any resolution. The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.07. No Delay of Rights by Meeting. Nothing in this
-----------------------------
Article Ten contained shall be deemed or construed to authorize or permit, by
reason of any call of a meeting of Noteholders or any rights expressly or
impliedly conferred hereunder to make such call, any hindrance or delay in the
exercise of any right or rights conferred upon or reserved to the Trustee or to
the Noteholders under any of the provisions of this Indenture or of the Notes.
ARTICLE ELEVEN
SUPPLEMENTAL INDENTURES
-----------------------
SECTION 11.01. Without Consent of Noteholders. The Company, when
------------------------------
authorized by a resolution of its Board of Directors, and the Trustee may amend
or supplement this Indenture or the Notes without notice to or the consent of
any Noteholder:
<PAGE>
82
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Article Twelve of this Indenture;
(3) to comply with any requirements of the Commission in connection
with the qualification of this Indenture under the Trust Indenture Act;
(4) to make provision with respect to the conversion rights of
Noteholders pursuant to the requirements of Section 15.06;
(5) to provide for uncertificated Notes in addition to or in place of
certificated Notes; or
(6) to make any change that does not adversely affect the rights of
any Holder.
SECTION 11.02. With Consent of Noteholders. Subject to Sections 7.04
---------------------------
and 7.07 of this Indenture and without prior notice to the Noteholders, the
Company, when authorized by its Board of Directors (as evidenced by a Board
Resolution), and the Trustee may amend this Indenture and the Notes with the
written consent of the Noteholders of not less than a majority in principal
amount at maturity of the Notes then outstanding, and the Noteholders of not
less than a majority in principal amount of the Notes then outstanding by
written notice to the Trustee may waive future compliance by the Company with
any provision of this Indenture or the Notes.
Notwithstanding the provisions of this Section 11.02, without the
consent of each Noteholder affected, an amendment or waiver, including a waiver
pursuant to Section 7.07, may not:
(i) change the Stated Maturity of the principal of, or any installment
of interest on, any Note, or reduce the principal amount thereof or the
rate of interest thereon or any premium payable upon the redemption
thereof, or adversely affect any right of repayment at the option of any
Noteholder or change any place of payment where, or the currency in which,
any Note or any premium or the interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date);
(ii) reduce the percentage in principal amount of outstanding Notes
required for any such supplemental indenture, for any waiver of compliance
with certain provisions of this Indenture or certain defaults and their
consequences provided for in this Indenture;
<PAGE>
83
(iii) waive a default in the payment of principal of, premium, if any,
or interest on, any Note;
(iv) modify any of the provisions of this Section 11.02, except to
increase any such percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the consent of the
Noteholder of each outstanding Note affected thereby; or
(v) modify any of the provisions of Article Four in a manner adverse
to the Noteholders.
It shall not be necessary for the consent of the Noteholders under
this Section 11.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 11.02
becomes effective, the Company shall mail to the Noteholders affected thereby a
notice briefly describing the amendment, supplement or waiver. The Company will
mail supplemental indentures to Noteholders upon request. Any failure of the
Company to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture or waiver.
SECTION 11.03. Revocation and Effect of Consent. Until an amendment
--------------------------------
or waiver becomes effective, a consent to it by a Noteholder is a continuing
consent by the Noteholder and every subsequent Noteholder of a Note or portion
of a Note that evidences the same debt as the Note of the consenting Noteholder,
even if notation of the consent is not made on any Note. However, any such
Noteholder or subsequent Noteholder may revoke the consent as to its Note or
portion of its Note. Such revocation shall be effective only if the Trustee
receives the notice of revocation before the date the amendment, supplement or
waiver becomes effective. An amendment, supplement or waiver shall become
effective on receipt by the Trustee of written consents from the Noteholders of
the requisite percentage, if any, in principal amount of the outstanding Notes
and, in the case of amendments and supplements, the execution thereof by the
Company and the Trustee.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Noteholders entitled to consent to any amendment,
supplement or waiver. If a record date is fixed, then, notwithstanding the last
two sentences of the immediately preceding paragraph, those Persons who are
Noteholders on such record date (or their duly designated proxies) and only
those Persons shall be entitled to consent to such amendment, supplement or
waiver or to revoke any consent previously given, whether or not such Persons
continue to be Noteholders after such record date. No such consent shall be
valid or effective for more than 90 days after such record date.
<PAGE>
84
After an amendment, supplement or waiver becomes effective, it shall
bind every Noteholder unless it is of the type described in any of clauses (i)
through (v) of Section 11.02. In case of an amendment or waiver of the type
described in clauses (i) through (v) of Section 11.02, the amendment or waiver
shall bind each Noteholder who has consented to it and every subsequent
Noteholder of a Note that evidences the same indebtedness as the Note of the
consenting Noteholder.
SECTION 11.04. Notation on or Exchange of Notes. If an amendment,
--------------------------------
supplement or waiver changes the terms of a Note, the Trustee may require the
Noteholder to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Note about the changed terms and return it to the Noteholder and
the Trustee may place an appropriate notation on any Note thereafter
authenticated. Alternatively, if the Company or the Trustee so determines, the
Company in exchange for the Note shall issue and the Trustee shall authenticate
a new Note that reflects the changed terms.
SECTION 11.05. Trustee to Sign Amendments, Etc. The Trustee shall be
-------------------------------
entitled to receive, and shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of any amendment, supplement or waiver
authorized pursuant to this Article Eleven is authorized or permitted by this
Indenture. Subject to the preceding sentence, the Trustee shall sign such
amendment, supplement or waiver if the same does not adversely affect the rights
of the Trustee. The Trustee may, but shall not be obligated to, execute any
such amendment, supplement or waiver that affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise.
ARTICLE TWELVE
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.01. Company May Consolidate, Etc., on Certain Terms.
-----------------------------------------------
Subject to the provisions of Section 12.02, nothing contained in this Indenture
or in any of the Notes shall prevent any consolidation or merger of the Company
with or into any other corporation or corporations (whether or not affiliated
with the Company), or successive consolidations or mergers in which the Company
or its successor or successors shall be a party or parties, or shall prevent any
sale, conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company, to any other corporation
(whether or not affiliated with the Company) authorized to acquire and operate
the same and which shall be organized under the laws of a State of the United
States or the District of Columbia; provided, however, and the Company hereby
-------- -------
covenants and agrees, that upon any such consolidation, merger, sale, conveyance
or lease, the due and punctual payment of the principal amount at maturity,
Issue Price, accrued Original Issue Discount, Redemption Price, Fundamental
Change Redemption Price and interest in respect
<PAGE>
85
of all of the Notes, according to their tenor, and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Company, shall be expressly assumed by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the corporation (if other than the Company) formed
by such consolidation, or into which the Company shall have been merged, or by
the corporation which shall have acquired or leased such property, and such
supplemental indenture shall provide for the applicable conversion rights set
forth in Section 15.06.
SECTION 12.02. Successor Corporation to Be Substituted. In case of
---------------------------------------
any such consolidation, merger, sale, conveyance or lease and upon the
assumption by the successor corporation, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change Redemption Price
and interest in respect of all of the Notes and the due and punctual performance
of all of the covenants and conditions of this Indenture to be performed by the
Company, such successor corporation shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the party of the
first part. In the event of any such consolidation, merger, sale or conveyance,
the Person named as the "Company" in the first paragraph of this Indenture or
any successor which shall thereafter have become such in the manner prescribed
in this Article Twelve may be dissolved, wound up and liquidated at any time
thereafter and such Person shall be released from its liabilities as obligor and
maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.
SECTION 12.03. Opinion of Counsel to Be Given Trustee. The Trustee,
--------------------------------------
subject to Sections 8.01 and 8.02, shall receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance or lease and any such assumption complies with the provisions
of this Article Twelve.
ARTICLE THIRTEEN
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.01. Discharge of Indenture. When (a) the Company shall
----------------------
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes which shall have been destroyed, lost or stolen and in
lieu of or in substitution for which other Notes shall have been authenticated
and delivered) and not theretofore canceled,
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86
or (b) all the Notes not theretofore canceled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, funds
sufficient to pay at maturity or upon redemption all of the Notes (other than
any Notes which shall have been mutilated, destroyed, lost or stolen and in lieu
of or in substitution for which other Notes shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal amount at maturity, Issue Price, accrued
Original Issue Discount, Redemption Price, Fundamental Change Redemption Price
and interest due or to become due to such date of maturity or redemption date,
as the case may be, and if in either case the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to (i) remaining rights of
registration of transfer, substitution and exchange and conversion of Notes,
(ii) rights hereunder of Noteholders to receive payments of principal amount at
maturity, Issue Price, accrued Original Issue Discount, Redemption Price,
Fundamental Change Redemption Price and interest in respect of the Notes and the
other rights, duties and obligations of Noteholders, as beneficiaries hereof
with respect to the amounts, if any, so deposited with the Trustee and (iii) the
rights, obligations and immunities of the Trustee hereunder), and the Trustee,
on demand of the Company accompanied by an Officers' Certificate and an Opinion
of Counsel as required by Section 17.05 and at the cost and expense of the
Company, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture; the Company, however, hereby agreeing to reimburse
the Trustee for any costs or expenses thereafter reasonably and properly
incurred by the Trustee and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Notes.
SECTION 13.02. Deposited Monies to Be Held in Trust by Trustee.
-----------------------------------------------
Subject to Article Four and Section 13.04, all monies deposited with the Trustee
pursuant to Section 13.01 shall be held in trust and applied by it to the
payment, either directly or through any Paying Agent (including the Company if
acting as its own Paying Agent), to the holders of the particular Notes for the
payment or redemption of which such monies have been deposited with the Trustee,
of all sums due and to become due thereon for principal amount at maturity,
Issue Price, accrued Original Issue Discount, Redemption Price, Fundamental
Change Redemption Price and interest, if any.
SECTION 13.03. Paying Agent to Repay Monies Held. Upon the
---------------------------------
satisfaction and discharge of this Indenture, all monies then held by any Paying
Agent of the Notes (other than the Trustee) shall, upon demand of the Company,
be repaid to it or paid to the Trustee, and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
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87
SECTION 13.04. Return of Unclaimed Monies. Any monies deposited with
--------------------------
or paid to the Trustee for payment of the principal amount at maturity, Issue
Price, accrued Original Issue Discount, Redemption Price, Fundamental Change
Redemption Price or interest in respect of Notes and not applied but remaining
unclaimed by the holders of Notes for two years after the date upon which such
amounts shall have become due and payable, shall be repaid to the Company by the
Trustee on written demand and all liability of the Trustee shall thereupon cease
with respect to such monies; and the holder of any of the Notes shall thereafter
look only to the Company for any payment which such holder may be entitled to
collect.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.01. Indenture and Notes Solely Corporate Obligations. No
------------------------------------------------
recourse for the payment of the principal amount at maturity, Issue Price,
accrued Original Issue Discount, Redemption Price, Fundamental Change Redemption
Price or interest in respect of any Note, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental
indenture, or in any Note, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder, officer
or director, as such, past, present or future, of the Company or of any
successor corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
ARTICLE FIFTEEN
CONVERSION OF NOTES
SECTION 15.01. Right to Convert. Subject to and upon compliance with
----------------
the provisions of this Article, the holder of any Note shall have the right, at
its option, at any time after 60 days following the latest date of original
issuance and prior to the close of business on December 15, 2005 (except that,
with respect to any Note or portion of a Note which shall be called for
redemption such right shall terminate, except as provided in Section 15.02 or
Section 3.06, at the close of business on the Business Day next preceding the
date fixed for redemption of such Note or portion of a Note and such right shall
<PAGE>
88
terminate with respect to any Note or portion thereof subject to a duly
completed and delivered election for redemption pursuant to Article Sixteen,
unless in each case the Company shall default in payment due upon redemption
thereof) to convert the principal amount at maturity of any such Note, or any
portion of such principal amount at maturity which is $1,000 or an integral
multiple thereof, into that number of fully paid and non-assessable shares of
Common Stock (as such shares shall then be constituted) obtained by dividing the
principal amount at maturity of the Note or portion thereof surrendered for
conversion by $1,000 and multiplying the result so obtained by the Conversion
Rate in effect at such time, by surrender of the Note so to be converted in
whole or in part in the manner provided in Section 15.02. A holder of Notes is
not, in such capacity, entitled to any rights of a holder of Common Stock until
such holder has converted his Notes.
SECTION 15.02. Exercise of Conversion Privilege; Issuance of Common
----------------------------------------------------
Stock on Conversion; No Adjustment for Interest or Dividends. In order to
- ------------------------------------------------------------
exercise the conversion privilege, the holder of any Note to be converted in
whole or in part shall surrender such Note at an office or agency maintained by
the Company pursuant to Section 5.02, accompanied by the funds, if any, required
by the last paragraph of this Section, and shall give written notice of
conversion in the form provided on the Notes (or such other notice which is
acceptable to the Company) to the Company at such office or agency that the
holder elects to convert such Note or the portion thereof specified in said
notice. Such notice shall also state the name or names (with address) in which
the certificate or certificates for shares of Common Stock which shall be
issuable on such conversion shall be issued, and shall be accompanied by
transfer taxes, if required pursuant to Section 15.07. Each Note surrendered
for conversion shall, unless the shares issuable on conversion are to be issued
in the same name as the registration of such Note, be duly endorsed by, or be
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any
interest in a Note in global form, the beneficial holder must complete the
appropriate instruction form for conversion pursuant to the Depositary's book-
entry conversion procedures, deliver by book-entry delivery an interest in such
Note in global form, furnish appropriate endorsements and transfer documents if
required by the Company or the Trustee or conversion agent, and pay the funds,
if any, required by the last paragraph of this Section 15.02 and any transfer
taxes, if required pursuant to Section 15.07.
As promptly as practicable after the surrender of such Note and the
receipt of such notice and funds and subject to compliance with any restrictions
on transfer if Conversion Shares are to be issued in a name other than that of
the Noteholder (as if such transfer were a transfer of the Note or Notes (or
portion thereof) so converted), if any, as aforesaid, the Company shall issue
and shall deliver at such office or agency to such holder, or on his written
order, a certificate or certificates for the number of full shares issuable
<PAGE>
89
upon the conversion of such Note or portion thereof in accordance with the
provisions of this Article and an additional share of Common Stock or cash equal
to the then fair market value of any fractional interest in respect of a share
of Common Stock arising upon such conversion, as provided in Section 15.03. In
case any Note of a denomination greater than $1,000 principal amount at maturity
shall be surrendered for partial conversion, and subject to Section 2.02, the
Company shall execute and the Trustee shall authenticate and deliver to or upon
the written order of the holder of the Note so surrendered, without charge to
it, a new Note or Notes in authorized denominations in an aggregate principal
amount at maturity equal to the unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected on the date on
which such Note (or portion thereof) shall have been surrendered (accompanied by
the funds, if any, required by the last paragraph of this Section) and the
notice referred to in the first sentence of this Section 15.02 shall have been
received by the Company, as aforesaid, and the Person in whose name any
certificate or certificates for such Conversion Shares shall be issuable upon
such conversion shall be deemed to have become on said date the holder of record
of such Conversion Shares; provided, however, that with respect to any such
-------- -------
surrender on any date when the stock transfer books of the Company shall be
closed, the Person in whose name the certificates are to be issued shall be
deemed to be the record holder thereof for all purposes on the next succeeding
day on which such stock transfer books are open, but such conversion shall be at
the Conversion Rate in effect on the date upon which such Note shall have been
surrendered.
Except as described in this Section, holders of the Notes will not be
entitled to any payment or adjustment on account of accrued Original Issue
Discount or accrued and unpaid interest upon conversion of the Notes. The
Company's delivery of the fixed number of Conversion Shares of Common Stock into
which the Notes are convertible will be deemed to satisfy the Company's
obligation to pay the principal amount at maturity of the Notes and all accrued
interest and Original Issue Discount that has not previously been (or is not
simultaneously being) paid. The Common Stock is treated as issued first in
payment of accrued interest and Original Issue Discount and then in payment of
principal.
Any Note or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the opening of business on the following interest payment date shall
(unless such Note or portion thereof being converted shall have been called for
redemption during the period from the close of business on any record date for
the payment of interest to the close of business on the following interest
payment date) be accompanied by payment, in New York Clearing House funds of an
amount equal to the interest otherwise payable on such interest payment date on
the principal amount at maturity being converted; provided, however, that no
-------- -------
such payment need be made if there shall exist at the time of conversion a
default in the payment of interest on the Notes. An amount equal to such
payment shall be paid by the Company on such
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90
interest payment date to the holder of such Note at the close of business on
such record date; provided, however, that if the Company shall default in the
-------- -------
payment of interest on such interest payment date, such amount shall be paid to
the Person who made such required payment. Except as provided above in this
Section, no adjustment shall be made for Original Issue Discount or interest
accrued on any Note converted or for dividends on any shares issued upon the
conversion of such Note as provided in this Article.
SECTION 15.03. Cash Payments in Lieu of Fractional Shares. A
------------------------------------------
Noteholder who would otherwise be entitled to a fractional share of Common Stock
shall, at the election of the Company, receive either an additional share of
Common Stock or cash equal to the then current market value of such fractional
share. If more than one Note shall be surrendered for conversion at one time by
the same holder, the number of full shares which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal amount at
maturity of the Notes (or specified portions thereof to the extent permitted
hereby) so surrendered. For these purposes, the current market value of a share
of Common Stock shall be the Closing Price on the first Business Day immediately
preceding the day on which the Notes (or specified portions thereof) are deemed
to have been converted and such Closing Price shall be determined as provided in
subsection (g) of Section 15.05.
SECTION 15.04. Conversion Rate. The Conversion Rate shall be as
---------------
specified in the form of Note hereinabove set forth, subject to adjustment as
provided in this Article.
SECTION 15.05. Adjustment of Conversion Rate. The Conversion Rate
-----------------------------
shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall pay a dividend or make a distribution,
in shares of its Common Stock, on its Common Stock, the Conversion Rate in
effect at the opening of business on the date following the date fixed for
the determination of stockholders entitled to receive such dividend or
other distribution shall be increased by multiplying such Conversion Rate
by a fraction of which the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination and the numerator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such
determination. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
If any dividend or distribution of the type described in this Section
15.05(a) is declared but is not so paid or made and not required to be so
paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate which would then be in effect if such dividend or distribution had not
been declared.
<PAGE>
91
(b) In case the Company shall issue rights or warrants to all holders
of its Common Stock entitling them (for a period expiring within 45 days
after the date fixed for determination of stockholders entitled to receive
such rights or warrants) to subscribe for or purchase Common Stock at a
price per share less than the Current Market Price per share of Common
Stock (as defined in Section 15.05(g) below) at the record date for the
determination of stockholders entitled to receive such rights or warrants,
the Conversion Rate in effect immediately prior thereto shall be adjusted
so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the date fixed for
determination of stockholders entitled to receive such rights or warrants
by a fraction the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
determination of stockholders entitled to receive such rights or warrants
plus the number of shares which the aggregate offering price of the total
number of shares so offered would purchase at such Current Market Price and
the numerator of which shall be the number of shares of Common Stock
outstanding on the date fixed for determination of stockholders entitled to
receive such rights or warrants plus the number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment shall
be made successively whenever any such rights or warrants are issued, and
shall become effective immediately after the opening of business on the day
following the record date for the determination of the stockholders
entitled to receive such rights or warrants. In determining whether any
rights or warrants entitle the holders to subscribe for or purchase shares
of Common Stock at less than such Current Market Price, and in determining
the aggregate offering price of such shares of Common Stock, there shall be
taken into account any consideration received by the Company for such
rights or warrants, the value of such consideration, if other than cash, to
be determined by the Board of Directors. To the extent that shares of
Common Stock are not delivered or required to be delivered after the
expiration of such rights or warrants, the Conversion Rate shall be
readjusted to the Conversion Rate which would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on
the basis of delivery of only the number of shares of Common Stock actually
delivered. If such rights or warrants are not so issued and not required
to be so issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if such record date for the
determination of stockholders entitled to receive such rights or warrants
had not been fixed.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Rate in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately increased, and
conversely, in case outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Rate in
effect at the opening of business on
<PAGE>
92
the day following the day upon which such combination becomes effective
shall be proportionately reduced, such reduction or increase, as the case
may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination
becomes effective.
(d) In case the Company shall distribute to all holders of its Common
Stock any shares of any class of capital stock of the Company (other than
Common Stock) or evidences of its indebtedness or assets (excluding cash
dividends or other distributions to the extent paid from retained earnings
of the Company) or rights or warrants to subscribe for or purchase any of
its securities (excluding those referred to in subsection (b) above) (any
of the foregoing hereinafter in this subsection the "Distributed
Securities"), then in each such case the Conversion Rate shall be adjusted
so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect on the record date with respect to such
distribution by a fraction of which the determination shall be the Current
Market Price per share of the Common Stock on such record date less the
fair market value on such record date (as determined by the Board of
Directors of the Company, whose determination shall be conclusive, and
described in a certificate filed with the Trustee) of the Distributed
Securities applicable to one share of Common Stock and the numerator of
which shall be the Current Market Price per share of the Common Stock on
the record date for the determination of shareholders entitled to receive
such distribution; such adjustment shall become effective immediately prior
to the opening of business on the day following such record date.
Notwithstanding the foregoing, in the event the then fair market value (as
so determined) of the portion of the Distributed Securities applicable to
one share of Common Stock is equal to or greater than the Current Market
Price of the Common Stock on the relevant record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Noteholder shall have the right to receive upon conversion the amount of
Distributed Securities such holder would have received had such holder
converted each Note on such record date. In the event that such
distribution is not so paid or made, the Conversion Rate shall again be
adjusted to the Conversion Rate which would then be in effect if such
distribution had not been declared. If the Board of Directors determines
the fair market value of any distribution for purposes of this subsection
(d) by reference to the actual or when issued trading market for any
securities, it must in doing so consider the prices in such market over the
same period used in computing the Current Market Price of the Common Stock.
Notwithstanding the foregoing provisions of this subsection (d), no
adjustment shall be made thereunder for any distribution of Distributed
Securities if the Company makes proper provision so that each holder of a
Note who converts such Note (or any portion thereof) after the record date
for such distribution shall be entitled to receive upon such conversion, in
addition to the shares of Common Stock issuable upon such
<PAGE>
93
conversion, the amount and kind of Distributed Securities that such holder
would have been entitled to receive if such holder had, immediately prior
to such record date, converted such Note into Common Stock, provided that,
--------
with respect to any Distributed Securities that are convertible,
exchangeable or exercisable, the foregoing provision shall only apply to
the extent (and so long as) the Distributed Securities receivable upon
conversion of such Note would be convertible, exchangeable or exercisable,
as applicable, without any loss of rights or privileges for a period of at
least 60 days following conversion of such Note.
(e) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding (x) any quarterly cash
dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed the greater of
(A) the amount per share of Common Stock of the next preceding quarterly
cash dividend on the Common Stock to the extent such preceding quarterly
dividend did not require any adjustment of the Conversion Rate pursuant to
this Section 15.05(e) (as adjusted to reflect subdivisions or combinations
of the Common Stock), and (B) 3.75% of the average of the last reported
sales price of the Common Stock (determined as provided in Section
15.05(g)) during the ten Trading Days (as defined in Section 15.05(g)) next
preceding the date of declaration of such dividend and (y) any dividend or
distribution in connection with the liquidation, dissolution or winding up
of the Company, whether voluntary or involuntary), then, in such case,
unless the Company elects to reserve such cash for distribution to the
holders of the Notes upon the conversion of the Notes so that any such
holder converting Notes will receive upon such conversion, in addition to
the shares of Common Stock to which such holder is entitled, the amount of
cash which such holder would have received if such holder had, immediately
prior to the record date for such distribution of cash, converted its Notes
into Common Stock, the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on such record date by a
fraction of which the denominator shall be such Current Market Price of the
Common Stock on the record date less the amount of cash so distributed (and
not excluded as provided above) applicable to one share of Common Stock and
the numerator of which shall be the Current Market Price of the Common
Stock on such record date; such adjustment to be effective immediately
prior to the opening of business on the day following the record date;
provided, however, that in the event the portion of the cash so distributed
-------- -------
applicable to one share of Common Stock is equal to or greater than the
Current Market Price of the Common Stock on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
Noteholder shall have the right to receive upon conversion the amount of
cash such holder would have received had such holder converted each Note on
the record date. If such dividend or distribution is not so paid or made,
the
<PAGE>
94
Conversion Rate shall again be adjusted to be the Conversion Rate which
would then be in effect if such dividend or distribution had not been
declared.
If any adjustment is required to be made as set forth in this
subsection (e) as a result of a distribution that is a quarterly dividend,
such adjustment shall be based upon the amount by which such distribution
exceeds the amount of the quarterly cash dividend permitted to be excluded
pursuant hereto. If an adjustment is required to be made as set forth in
this subsection (e) above as a result of a distribution that is not a
quarterly dividend, such adjustment shall be based upon the full amount of
the distribution.
(f) In case a tender or exchange offer made by the Company or any
subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer shall involve the payment by the
Company or such subsidiary of consideration per share of Common Stock
having a fair market value (as determined by the Board of Directors or, to
the extent permitted by applicable law, a duly authorized committee
thereof, whose determination shall be conclusive, and described in a
resolution of the Board of Directors or such duly authorized committee
thereof, as the case may be, at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer
(as it shall have been amended), that exceeds the Current Market Price of
the Common Stock on the Trading Day next succeeding the Expiration Time,
the Conversion Rate shall be adjusted so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior
to the Expiration Time by a fraction of which the denominator shall be the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) on the Expiration Time multiplied by the Current Market
Price of the Common Stock on the Trading Day next succeeding the Expiration
Time and the numerator of which shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) on the Expiration Time and the
Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time; such adjustment to become effective immediately prior
to the opening of business on the day following the Expiration Time. If
the Company is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Company is permanently prevented by applicable law
from effecting any such purchases or all such purchases are rescinded, the
Conversion Rate shall again be adjusted to be the Conversion Rate which
would then be in effect if such tender or exchange offer had not been made.
<PAGE>
95
(g) For purposes hereof, the Current Market Price per share of Common Stock
at any date shall be deemed to be the average of the last reported sale
prices for the ten consecutive Trading Days (as defined below) preceding
the day before the record date with respect to any distribution, issuance
or other event requiring such computation. The "Closing Price" with
respect to any securities on any day shall mean the closing sale price
regular way on such day or, in case no such sale takes place on such day,
the average of the reported closing bid and asked prices, regular way, in
each case on the New York Stock Exchange, or, if such security is not
listed or admitted to trading on such exchange, on the principal national
security exchange or quotation system on which such security is quoted or
listed or admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the
average of the closing bid and asked prices of such security on the over-
the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similar generally accepted reporting
service, or if not so available, in such manner as furnished by any New
York Stock Exchange member firm selected from time to time by the Board of
Directors for that purpose, or a price determined in good faith by the
Board of Directors, whose determination shall be conclusive and described
in a Board Resolution. The "fair market value" shall mean the amount which
a willing buyer under no compulsion to buy would pay a willing seller under
no compulsion to sell in an arm's length transaction. The "record date"
shall mean, with respect to any dividend, distribution or other transaction
or event in which the holders of Common Stock have the right to receive any
cash, securities or other property or in which the Common Stock (or other
applicable security) is exchanged for or converted into any combination of
cash, securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
(h) Rights or warrants distributed by the Company to all holders of
Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Trigger Event"):
(i) are deemed to be transferred with such shares of Common
Stock,
(ii) are not exercisable, and
(iii) are also issued in respect of future issuances of Common
Stock,
shall not be deemed distributed for purposes of this Section 15.05 until
the occurrence of the earliest Trigger Event. In addition, in the event of
any distribution of rights or
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96
warrants, or any Trigger Event with respect thereto, that shall have
resulted in an adjustment to the Conversion Rate under this Section 15.05,
(1) in the case of any such rights or warrants which shall all have been
redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or
repurchase to give effect to such distribution or Trigger Event, as the
case may be, as though it were a cash distribution, equal to the per share
redemption or repurchase price received by a holder of Common Stock with
respect to such rights or warrants (assuming such holder had retained such
rights or warrants), made to all holders of Common Stock as of the date of
such redemption or repurchase, and (2) in the case of any such rights or
warrants all of which shall have expired without exercise by any holder
thereof, the Conversion Rate shall be readjusted as if such issuance had
not occurred.
(i) No adjustment to the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least 1% in such
rate; provided, however, that any adjustments which by reason of this
-------- -------
subsection (i) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Article Fifteen shall be made by the Company and shall be made to the
nearest cent or to the nearest one hundredth of a share, as the case may
be. Anything in this Section 15.05 to the contrary notwithstanding, the
Company shall be entitled to make such increases in the Conversion Rate, in
addition to those required by this Section 15.05, as it in its discretion
shall determine to be advisable in order that any stock dividends,
subdivision of shares, distribution of rights to purchase stock or
securities, or any distribution of securities convertible into or
exchangeable for stock hereafter made by the Company to its stockholders
shall not be taxable. To the extent permitted by applicable law, the
Company from time to time may increase the Conversion Rate by any amount
for any period of time if the period is at least 20 days, the increase is
irrevocable during the period and the Board of Directors shall have made a
determination that such increase would be in the best interests of the
Company, which determination shall be conclusive. Whenever the Conversion
Rate is so increased, the Company shall mail to Noteholders and file with
the Trustee and the conversion agent a notice of the increase. The Company
shall mail the notice at least 15 days before the date the increased
Conversion Rate takes effect. The notice shall state the increased
Conversion Rate and the period it will be in effect.
(j) Whenever the Conversion Rate is adjusted, as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts
requiring such adjustment. Promptly after delivery of such certificate,
the Company shall prepare a notice of such adjustment of the Conversion
Rate setting forth the adjusted Conversion Rate and
<PAGE>
97
the date on which such adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Rate to each Noteholder at its
last address appearing on the Security Register provided for in Section
2.05 of this Indenture.
(k) In any case in which this Section 15.05 provides that an
adjustment shall become effective immediately after a record date for an
event, the Company may defer until the occurrence of such event (i) issuing
to the holder of any Note converted after such record date and before the
occurrence of such event the additional shares of Common Stock issuable
upon such conversion by reason of the adjustment required by such event
over and above the Common Stock issuable upon such conversion before giving
effect to such adjustment and (ii) paying to such holder any amount in cash
or additional shares in lieu of any fractional share pursuant to Section
15.03.
(l) In case of a tender or exchange offer made by a Person other than
the Company or any subsidiary for an amount which increases the offeror's
ownership of Common Stock to more than 25% of the Common Stock outstanding
and shall involve the payment by such Person of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) at the last time (the "Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time,
and in which, as of the Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Rate shall be increased
so that the same shall equal the price determined by multiplying the
Conversion Rate in effect immediately prior to the Expiration Time by a
fraction of which the denominator shall be the number of shares of Common
Stock outstanding (including any tendered or exchange shares) on the
Expiration Time multiplied by the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time and the numerator
shall be the sum of (x) the fair market value (determined as aforesaid) of
the aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer)
of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchase Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Purchased Shares) on
the Expiration Time and the Current Market Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, such increase to become
effective immediately prior to the opening of business on the day following
the Expiration Time. In the event that such Person is obligated to
purchase shares pursuant to any such tender or exchange offer, but such
Person is permanently prevented by applicable law from effecting any such
<PAGE>
98
purchases or all such purchases are rescinded, the Conversion Rate shall
again be adjusted to be the Conversion Rate which would then be in effect
if such tender or exchange offer had not been made. Notwithstanding the
foregoing, the adjustment described in this Section 15.05(l) shall not be
made if, as of the Expiration Time, the offering documents with respect to
such offer disclose a plan or intention to cause the Company to engage in
any transaction described in Article Twelve.
SECTION 15.06. Effect of Reclassification, Consolidation, Merger or
----------------------------------------------------
Sale. If any of the following events occur, namely (i) any reclassification or
- ----
change of outstanding shares of Common Stock (other than a change in par value,
or from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common Stock, or
(iii) any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other Person as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
then the Company or the successor or purchasing Person, as the case may be,
shall execute with the Trustee a supplemental indenture providing that each Note
shall be convertible into the kind and amount of shares of stock and other
securities or property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
by a holder of a number of shares of Common Stock issuable upon conversion of
such Notes immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance. Such supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.05 of this Indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, consolidations, mergers, combinations, and sales.
SECTION 15.07. Taxes on Shares Issued. The issuance of stock
----------------------
certificates on conversions of Notes shall be made without charge to the
converting Noteholder for any U.S. tax in respect of the issue thereof. The
Company shall not, however, be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of stock in any name
other than that of the holder of any Note converted, and the Company shall not
be required to issue or deliver any such stock certificate unless and until the
Person or Persons requesting the issue thereof shall have paid to the Company
the
<PAGE>
99
amount of such tax or shall have established to the satisfaction of the Company
that such tax has been paid.
SECTION 15.08. Reservation of Shares; Shares to Be Fully Paid;
-----------------------------------------------
Compliance with Governmental Requirements; Listing of Common Stock. The Company
- ------------------------------------------------------------------
shall provide, free from preemptive rights, out of its authorized but unissued
shares, sufficient shares to provide for the conversion of the Notes from time
to time as such Notes are presented for conversion.
Before taking any action which would cause an adjustment increasing
the Conversion Rate so that the shares of Common Stock issuable upon conversion
of the Notes would be issued for less than the par value of such Common Stock,
the Company will take all corporate action which may be necessary in order that
the Company may validly and legally issue fully paid and nonassessable shares of
such Common Stock at such adjusted Conversion Rate.
The Company represents, warrants and covenants that all shares of
Common Stock which may be issued upon conversion of Notes will upon issue be
fully paid and nonassessable by the Company and free from all taxes, liens and
charges with respect to the issue thereof.
The Company represents, warrants and covenants that if any shares of
Common Stock to be provided for the purpose of conversion of Notes hereunder
require registration with or approval of any governmental authority under any
Federal or State law before such shares may be validly issued upon conversion,
the Company will in good faith and as expeditiously as possible endeavor to
secure such registration or approval, as the case may be.
The Company further represents, warrants and covenants that if at any
time the Common Stock shall be listed on the New York Stock Exchange or any
other national securities exchange the Company will, if permitted by the rules
of such exchange, list and keep listed so long as the Common Stock shall be so
listed on such exchange, all Common Stock issuable upon conversion of the Notes.
SECTION 15.09. Responsibility of Trustee. The Trustee and any other
-------------------------
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Rate or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any
<PAGE>
100
time be issued or delivered upon the conversion of any Note; and the Trustee and
any other conversion agent make no representations with respect thereto.
Subject to the provisions of Section 8.01, neither the Trustee nor any
conversion agent shall be responsible for any failure of the Company to issue,
transfer or deliver any shares of Common Stock or stock certificates or other
securities or property or cash upon the surrender of any Note for the purpose of
conversion or to comply with any of the duties, responsibilities or covenants of
the Company contained in this Article. Without limiting the generality of the
foregoing, neither the Trustee nor any conversion agent shall be under any
responsibility to determine the correctness of any provisions contained in any
supplemental indenture entered into pursuant to Section 15.06 relating either to
the kind or amount of shares of stock or securities or property (including cash)
receivable by Noteholders upon the conversion of their Notes after any event
referred to in such Section 15.06 or to any adjustment to be made with respect
thereto, but, subject to the provisions of Section 8.01 may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in
relying upon, the Officers' Certificate (which the Company shall be obligated to
file with the Trustee prior to the execution of any such supplemental indenture)
with respect thereto.
SECTION 15.10. Notice to Holders Prior to Certain Actions. In case:
------------------------------------------
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock (other than in cash out of retained earnings); or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share
of any class or any other rights or warrants; or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no par
value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the
assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register, provided for in
Section 2.05 of this Indenture, as promptly as possible but in any event at
least fifteen days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to
<PAGE>
101
such dividend, distribution or rights are to be determined, or (y) the date on
which such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
SECTION 15.11. Simultaneous Adjustments. In the event that this
------------------------
Article 15 requires adjustments to the Conversion Rate under more than one of
Section 15.05(a), 15.05(b), 15.05(c), 15.05(d), 15.05(e), 15.05(f) or 15.05(l),
and the record dates for the distributions giving rise to such adjustments shall
occur on the same date, then such adjustments shall be made by applying, first,
the provisions of Section 15.05(c), second, the provisions of Section 15.05(d),
third the provisions of Section 15.05(a) and, fourth, the provisions of Section
15.05(b) and fifth, Section 15.05(e) and Section 15.05(k) in whatever order
results in a higher Conversion Rate.
SECTION 15.12. Notice to Holders of Notes; Waiver. Except as
----------------------------------
otherwise expressly provided herein, where this Indenture provides for notice to
holders of Notes of any event, such notice shall be sufficiently given to
holders of Notes if given in writing and mailed, first-class postage prepaid, to
each holder of a Note affected by such event, at the address of such holder as
it appears in the register, not earlier than the earliest date and not later
than the latest date prescribed for the giving of such notice.
In any case where notice to holders of Notes is given by mail, neither
the failure to mail such notice, nor any defect in any notice so mailed, to any
particular holder of a Note shall affect the sufficiency of such notice with
respect to other holders of Notes. In case by reason of the suspension of
regular mail service or by reason of any other cause it shall be impracticable
to give such notice by mail, then such notification to holders of Notes as shall
be made with the approval of the Trustee shall constitute a sufficient
notification to such holders for every purpose hereunder.
Where this Indenture provides for notice in any manner such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 15.13. Successive Adjustments. After an adjustment to the
----------------------
Conversion Rate under this Article Fifteen, any subsequent event requiring an
adjustment under this Article Fifteen shall cause an adjustment to the
Conversion Rate as so adjusted.
<PAGE>
102
SECTION 15.14. Implementation of Stockholders' Rights Plan. In the
--------------------------------------------
event the Company implements a stockholders' rights plan, such rights plan must
provide that upon conversion of the Notes, the Noteholders will receive, in
addition to the Common Stock issuable upon such conversion, such rights whether
or not such rights have separated from the Common Stock at the time of such
conversion.
SECTION 15.15. Company Determination Final. Any determination that
---------------------------
the Company or the Board of Directors must make pursuant to Section 15.03,
15.05, 15.06, 15.11 or 15.12 is conclusive.
SECTION 15.16. General Considerations. Whenever successive
----------------------
adjustments to the Conversion Rate are called for pursuant to this Article
Fifteen, such adjustments shall be made to the Current Market Price as may be
necessary or appropriate to effectuate the intent of this Article and to avoid
unjust or inequitable results as determined in good faith by the Board of
Directors.
ARTICLE SIXTEEN
REDEMPTION OF NOTES AT OPTION OF HOLDERS
SECTION 16.01. Option to Elect Redemption upon a Fundamental Change.
----------------------------------------------------
(a) If a Fundamental Change shall occur at any time prior to December 15, 2005,
each holder of Notes shall have the right, at such holder's option, to require
the Company to redeem any or all of such holder's Notes on the date (the
"Fundamental Change Redemption Date") (or if such date is not a Business Day,
the next succeeding Business Day) that is 45 days after the date of the
Company's notice of such Fundamental Change. Any redemption of such holder's
Notes in part shall be in the amount of $1,000 principal amount at maturity or
any integral multiple thereof. Any such redemption of Notes shall be made on
the Fundamental Change Redemption Date at a price (the "Fundamental Change
Redemption Price") equal to the Issue Price plus accrued Original Issue Discount
to the Fundamental Change Redemption Date; provided that, if the Applicable
--------
Price with respect to a Fundamental Change is less than the Reference Market
Price, the applicable price with respect to any such redemption of Notes shall
be equal to the foregoing redemption price multiplied by the fraction obtained
by dividing the Applicable Price by the Reference Market Price. In each case,
the Company shall also pay accrued interest, if any, on such Notes to the
Fundamental Change Redemption Date; provided that, if such Fundamental Change
--------
Redemption Date is between a June 1 and the next succeeding June 15 or between a
December 1 and the next succeeding December 15, then the interest payable on
such date shall be paid to the holder of record of the Note on the next
preceding June 15 or December 15. The Company shall mail to all holders of
record of the Notes a notice of the occurrence of a Fundamental Change and of
the redemption right arising as a result thereof on or before
<PAGE>
103
the 10th day after the occurrence of such Fundamental Change. The Company shall
promptly furnish the Trustee a copy of such notice. In the event of any
adjustment to the Conversion Rate, the Reference Market Price shall be changed
by multiplying the then existing Reference Market Price by a fraction, the
numerator of which is the Conversion Rate Prior to such adjustment and the
denominator of which is the Conversion Rate after such adjustment.
(b) For a Note to be so redeemed at the option of the holder, the
Company must receive at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, such Note with the
form entitled "Option to Elect Redemption Upon a Fundamental Change" on the
reverse thereof (a "Fundamental Change Redemption Notice") duly completed,
together with such Notes duly endorsed for transfer, on or before the 30th day
after the date of such notice (or if such 30th day is not a Business Day, the
immediately preceding Business Day). All questions as to the validity,
eligibility (including time of receipt), withdrawal and acceptance of any Note
for redemption shall be determined by the Company, whose determination shall be
final and binding.
A Fundamental Change Redemption Notice may be withdrawn by means of a
written notice of withdrawal delivered to the office of the Trustee at any time
prior to the close of business on the Fundamental Change Redemption Date to
which it relates specifying:
(1) the certificate number of the Note in respect of which such notice
of withdrawal is being submitted,
(2) the principal amount at maturity of the Note with respect to which
such notice of withdrawal is being submitted, and
(3) the principal amount at maturity, if any, of such Note which
remains subject to the original Fundamental Change Redemption Notice and
which has been or will be delivered for redemption by the Company.
SECTION 16.02. Deposit of Funds for Redemption. On or prior to the
-------------------------------
date any Note is required to be paid pursuant to Section 16.01, the Company will
deposit with the Trustee or with one or more Paying Agents (or, if the Company
is acting as its own Paying Agent, set aside, segregate and hold in trust as
provided in Section 5.04) an amount of money sufficient to redeem on the
applicable Fundamental Change Redemption Date all the Notes to be repaid on such
date at the Fundamental Change Redemption Price, together with accrued interest
to the date fixed for redemption.
<PAGE>
104
ARTICLE SEVENTEEN
MISCELLANEOUS PROVISIONS
SECTION 17.01. Provisions Binding on Company's Successors. All the
------------------------------------------
covenants, stipulations, promises and agreements in this Indenture contained by
the Company shall bind its successors and assigns whether so expressed or not.
SECTION 17.02. Official Acts by Successor Corporation. Any act or
--------------------------------------
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
SECTION 17.03. Addresses for Notices, Etc. Any notice or demand
--------------------------
which by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Notes on the Company may be given or
served by being deposited postage prepaid by first class mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to:
Exide Corporation
645 Penn Street
Reading, Pennsylvania 19612-4205
Attention: Chief Financial Officer
Any notice, direction, request or demand hereunder to or upon the Trustee shall
be deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the Principal Office of the Trustee, which office is, at the
date as of which this Indenture is dated, located at:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attn: Corporate Trust Trustee Administration
SECTION 17.04. Governing Law. This Indenture and each Note shall be
-------------
governed by the laws of the State of New York.
SECTION 17.05. Evidence of Compliance with Conditions Precedent;
-------------------------------------------------
Certificates to Trustee. Upon any application or demand by the Company to the
- -----------------------
Trustee to take any action under any of the provisions of this Indenture, if
requested by the Trustee, the
<PAGE>
105
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
SECTION 17.06. Legal Holidays. In any case where the date of
--------------
maturity of interest on or principal of the Notes or the date fixed for
redemption or repayment of any Note is not a Business Day (a "Legal Holiday"),
then payment of such interest on or principal of the Notes need not be made on
such date but may be made on the next succeeding day not a Legal Holiday with
the same force and effect as if made on the date of maturity or the date fixed
for redemption or repayment and no interest shall accrue for the period from and
after such date.
SECTION 17.07. No Security Interest Created. Nothing in this
----------------------------
Indenture or in the Notes, expressed or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect, in any jurisdiction
where property of the Company or its subsidiaries is located.
SECTION 17.08. Benefits of Indenture. Nothing in this Indenture or
---------------------
in the Notes, express or implied, shall give to any Person, other than the
parties hereto, any Paying Agent, any Registrar and their successors hereunder,
the holders of Notes and the holders of Senior Indebtedness, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
SECTION 17.09. Table of Contents, Headings, Etc. The table of
--------------------------------
contents and the titles and headings of the articles and sections of this
Indenture have been inserted for convenience of reference only, are not to be
considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof.
SECTION 17.10. Execution in Counterparts. This Indenture may be
-------------------------
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
<PAGE>
106
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly signed, all as of the date first written above.
EXIDE CORPORATION,
as Issuer
By:______________________________________
Alan E. Gauthier
Chief Financial Officer
THE BANK OF NEW YORK,
as Trustee
By:______________________________________
Mary Jane Morrissey
Assistant Vice President
<PAGE>
EXHIBIT A
---------
Form of Certificate
-------------------
_____________, _____
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: Exide Corporation (the "Company")
2.09% Convertible Senior Subordinated Notes
due 2005 (the "Securities")
------------------------------------------
Ladies and Gentlemen:
This letter relates to U.S. $_______________ principal amount at
maturity of Securities represented by a Note (the "Legended Note") which bears a
legend outlining restrictions upon transfer of such Legended Note. Pursuant to
Section 2.03 of the Indenture (the "Indenture") dated as of December 15, 1995
relating to the Securities, we hereby certify that we are (or we will hold such
Securities on behalf of) a person or persons outside the United States to whom
the Securities could be transferred in accordance with Rule 904 of Regulation S
promulgated under the U.S. Securities Act of 1933, as amended. Accordingly, you
are hereby requested to exchange the legended certificate for an unlegended
certificate representing an identical principal amount at maturity of
Securities, all in the manner provided for in the Indenture.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Holder]
By:_________________________________
Authorized Signature
<PAGE>
EXHIBIT B
---------
Form of Certificate to be Delivered
in Connection with Transfers
Pursuant to Regulation S
-----------------------------------
__________,______
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: Exide Corporation (the "Company")
2.09% Convertible Senior Subordinated Notes
due 2005 (the "Securities")
------------------------------------------
Ladies and Gentlemen:
In connection with our proposed sale of U.S.$__________________
aggregate principal amount at maturity of the Securities, we confirm that such
sale has been effected pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended, and, accordingly, we represent that:
(1) the offer of the Securities was not made to a person in the
United States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 904(b) of Regulation S; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the U.S. Securities Act of 1933.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative
<PAGE>
B-2
or legal proceedings or official inquiry with respect to the matters covered
hereby. Terms used in this certificate have the meanings set forth in
Regulation S.
Very truly yours,
[Name of Transferor]
By:_______________________________
Authorized Signature
<PAGE>
EXHIBIT C
---------
Form of Certificate to be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
-----------------------------------------
______, 199_
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Re: Exide Corporation (the "Company")
2.09% Convertible Senior Subordinated Notes
due 2005 (the "Securities")
--------------------------- -
Ladies and Gentlemen:
In connection with our proposed purchase of $___________ aggregate
principal amount of the Securities, we confirm that:
1. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
dated as of December 15, 1995 relating to the Securities (the "Indenture")
and the undersigned agrees to be bound by, and not to resell, pledge or
otherwise transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as amended (the
"Securities Act").
2. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities may not
be offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell any Securities, we
will do so only (A) to the Company or any subsidiary thereof, (B) in
accordance with Rule 144A under the Securities Act to a "qualified
institutional buyer" (as defined therein), (C) to an institutional
"accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you
and to the Company a signed letter substantially in the form of this
letter, (D) outside the United States in accordance with Rule 904 of
Regulation S under the Securities Act or (E) pursuant to the provisions of
Rule 144 under the Securities Act, and we further agree to provide to any
Person purchasing any of the
<PAGE>
C-2
Securities from us a notice advising such purchaser that resales of the
Securities are restricted as stated herein.
3. We understand that, on any proposed resale of any Securities, we
will be required to furnish to you and the Company such certifications,
legal opinions and other information as you and the Company may reasonably
require to confirm that the proposed sale complies with the foregoing
restrictions. We further understand that the Securities purchased by us
will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able
to bear the economic risk of our or its investment.
5. We are acquiring the Securities purchased by us for our own
account or for one or more accounts (each of which is an institutional
"accredited investor") as to each of which we exercise sole investment
discretion.
You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:___________________________________
Authorized Signature
<PAGE>
EXHIBIT 10.25
FOR REFERENCE PURPOSES ONLY
[Composite Copy reflecting the First Amendment, dated as of October 21, 1994,
the Waiver, dated as of September 29, 1994, the Second Consent, Waiver and
Agreement, dated as of December 9, 1994, the Third Amendment, dated as of
February 3, 1995, the Consent and Waiver, dated as of February 21, 1995, the
Fourth Amendment, dated as of March 6, 1995, the Waiver, dated as of March 31,
1995, the Fifth Amendment and Consent, dated as of April 18, 1995, the Sixth
Amendment and Consent, dated as of April 21, 1995, the Seventh Amendment and
Consent, dated as of April 24, 1995, the Eighth Amendment, dated as of August
17, 1995, the Ninth Amendment and Consent, dated as of November 22, 1995, the
Tenth Amendment, Consent and Agreement, dated as of March 28, 1996, and the
Eleventh Amendment, Consent, Waiver and Agreement, dated as of May 17, 1996]
================================================================================
EXIDE
CREDIT AGREEMENT
among
EXIDE CORPORATION,
VARIOUS BANKS,
and
BANKERS TRUST COMPANY,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
and
BANK OF MONTREAL,
as AGENTS
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
_________________________________
Dated as of August 30, 1994
_________________________________
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TABLE OF CONTENTS
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SECTION 1. Amount and Terms of Credit.................................. 1
1.01 The Commitments.............................................. 1
1.02 Minimum Amount of Each Borrowing............................. 5
1.03 Notice of Borrowing.......................................... 5
1.04 Disbursement of Funds........................................ 6
1.05 Notes........................................................ 7
1.06 Conversions.................................................. 9
1.07 Pro Rata Borrowings.......................................... 9
1.08 Interest..................................................... 10
1.09 Interest Periods............................................. 10
1.10 Increased Costs, Illegality, etc............................. 12
1.11 Compensation................................................. 14
1.12 Change of Lending Office..................................... 14
1.13 Replacement of Banks......................................... 14
SECTION 2. Letters of Credit; Bank Guarantees.......................... 16
2.01 Letters of Credit; Bank Guarantees........................... 16
2.02 Minimum Stated Amount........................................ 21
2.03 Letter of Credit Requests.................................... 21
2.04 Letter of Credit Participations.............................. 22
2.05 Agreement to Repay Letter of Credit Drawings................. 26
2.06 Increased Costs.............................................. 27
SECTION 3. Commitment Commission; Fees; Reductions of Commitment....... 28
3.01 Fees......................................................... 28
3.02 Voluntary Termination of Unutilized Commitments.............. 29
3.03 Mandatory Reduction of Commitments........................... 30
SECTION 4. Prepayments; Payments; Taxes................................ 34
4.01 Voluntary Prepayments........................................ 34
4.02 Mandatory Repayments; Cash Collateralizations and Commitment
Reductions............................................... 36
4.03 Method and Place of Payment.................................. 48
4.04 Net Payments................................................. 48
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SECTION 5. Conditions Precedent to Initial Credit Events............... 50
5.01 Execution of Agreement; Notes................................ 50
5.02 Officer's Certificate........................................ 51
5.03 Opinions of Counsel.......................................... 51
5.04 Corporate Documents; Proceedings; etc........................ 51
5.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Collective Bargaining Agreements; Debt
Agreements; Tax Sharing Agreements......................... 52
5.06 Adverse Change, etc.......................................... 53
5.07 Litigation................................................... 53
5.08 Acquisition Documents and Initial Tender Offer Documents..... 53
5.09 Existing Indebtedness........................................ 54
5.10 Repayment and Termination of the Existing Chemical Credit
Agreement.................................................. 54
5.11 Guaranty..................................................... 55
5.12 Pledge Agreements............................................ 56
5.13 Security Agreement........................................... 56
5.14 Mortgages; Title Insurance; Surveys; etc..................... 56
5.15 Projections; Pro Forma Financial Statements; Accountants'
Certificates............................................... 57
5.16 Solvency Certificate; Environmental Analyses; Insurance
Analyses................................................... 58
5.17 Consent Letter............................................... 59
5.18 Anti-Takeover Laws........................................... 59
5.19 Fees, etc.................................................... 59
5.20 Notices to Holders of Certain Indebtedness................... 59
5.21 Subrogation Rights Agreement................................. 60
5.22 Amendment to Purchase Agreement.............................. 60
SECTION 6. Conditions Precedent to Issuance of Secondary Tender Offer
Credit Support..................................................... 60
6.01 Secondary Tender Offer Filing Date........................... 60
6.02 Secondary Tender Offer Maximum Offered Consideration......... 60
6.03 Liquidity.................................................... 60
6.04 Treasury Stock Repurchase.................................... 61
6.05 Secondary Tender Offer Documents............................. 61
6.06 Further Assurances........................................... 61
6.07 Governmental Approvals....................................... 61
6.08 Litigation................................................... 62
6.09 Anti-Takeover Laws........................................... 62
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SECTION 6A. Conditions Precedent To CEAc Acquisition Date............... 62
6A.01. Execution of Third, Fourth and Fifth Amendments............. 62
6A.02. Officer's Certificate....................................... 62
6A.03. Opinions of Counsel......................................... 62
6A.04. Corporate Documents; Proceedings; etc....................... 63
6A.05 Due Diligence Reports....................................... 63
6A.06 Adverse Change, etc......................................... 63
6A.07 Litigation.................................................. 64
6A.08 Acquisition Documents....................................... 64
6A.09 CEAc Indebtedness........................................... 65
6A.10 Proceeds from the Subject Shares Issuance................... 66
6A.11 2005 Senior Unsecured Note Issuance; Escrow Release......... 66
6A.12 Security Documents.......................................... 67
6A.13 Financial Statements; Projections; Pro Forma Financial
Statements; Accountants' Certificates..................... 68
6A.14 Solvency Certificate; Environmental Analyses; Insurance
Analyses.................................................. 69
6A.15 Divestitures and/or Limitations; Competition Authority
Approvals................................................. 69
6A.16 Anti-Takeover Laws.......................................... 72
6A.17 Fees, etc. ................................................. 72
6A.18 Notices to Holders of Certain Indebtedness.................. 72
6A.19 Schedules................................................... 73
6A.20 CEAc Acquisition Amount; CEAc Refinancing Amount............ 73
SECTION 7. Conditions Precedent to All Credit Events................... 73
7.01 No Default; Representations and Warranties................... 73
7.02 Notice of Borrowing; Letter of Credit Request; Etc........... 73
7.03 Compliance with Indentures................................... 74
SECTION 8. Representations, Warranties and Agreements.................. 74
8.01 Corporate Status............................................. 75
8.02 Corporate Power and Authority................................ 75
8.03 No Violation................................................. 75
8.04 Governmental Approvals....................................... 76
8.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc.............................. 76
8.06 Litigation................................................... 78
8.07 True and Complete Disclosure................................. 78
8.08 Use of Proceeds; Margin Regulations.......................... 79
8.09 Tax Returns and Payments..................................... 79
8.10 Compliance with ERISA........................................ 80
8.11 The Security Documents....................................... 81
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8.12 Representations and Warranties in Documents.................. 82
8.13 Properties................................................... 82
8.14 Capitalization............................................... 82
8.15 Subsidiaries................................................. 83
8.16 Compliance with Statutes, etc................................ 83
8.17 Investment Company Act....................................... 83
8.18 Public Utility Holding Company Act........................... 84
8.19 Environmental Matters........................................ 84
8.20 Labor Relations.............................................. 85
8.21 Patents, Licenses, Franchises and Formulas................... 86
8.22 Indebtedness................................................. 86
8.23 Tender Offers................................................ 86
8.24 Treatment of Credit Agreement under Indentures............... 87
8.25 Restrictions on Subsidiaries................................. 87
8.26 CEAc Acquisition............................................. 87
SECTION 9. Affirmative Covenants....................................... 88
9.01 Information Covenants........................................ 88
9.02 Books, Records and Inspections............................... 93
9.03 Maintenance of Property; Insurance........................... 94
9.04 Corporate Franchises......................................... 94
9.05 Compliance with Statutes, etc................................ 94
9.06 Compliance with Environmental Laws........................... 95
9.07 ERISA........................................................ 96
9.08 End of Fiscal Years; Fiscal Quarters......................... 96
9.09 Performance of Obligations................................... 96
9.10 Payment of Taxes............................................. 97
9.11 Additional Security; Further Assurances; Surveys; etc ....... 97
9.12 Foreign Subsidiaries Security................................ 99
9.13 UCC Searches................................................. 100
9.14 Currency Hedging Agreements; Interest Rate Protection........ 100
9.15 Permitted Acquisitions....................................... 100
9.16 Tender Offers................................................ 104
9.17 Treasury Stock Repurchase.................................... 104
9.18 Termination of Tender Offers................................. 104
9.19 Ownership of Subsidiaries.................................... 105
9.20 New Domestic Wholly-Owned Subsidiaries....................... 106
SECTION 10. Negative Covenants......................................... 106
10.01 Liens....................................................... 106
10.02 Consolidation, Merger, Purchase or Sale of Assets, etc...... 109
10.03 Dividends................................................... 112
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10.04 Business.................................................... 113
10.05 Indebtedness................................................ 114
10.06 Advances, Investments and Loans............................. 118
10.07 Transactions with Affiliates................................ 122
10.08 Capital Expenditures........................................ 123
10.09 Consolidated Fixed Charge Coverage Ratio.................... 124
10.10 Minimum Consolidated EBITDA................................. 125
10.11 Maximum Leverage Ratio...................................... 127
10.12 Limitation on Modifications of Indebtedness; Modifications
of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc..................................... 130
10.13 Limitation on Certain Restrictions on Subsidiaries.......... 131
10.14 Limitation on Issuances of Capital Stock.................... 132
10.15 Certain Sale-Leaseback Transactions......................... 132
10.16 Limitation on Creation of Subsidiaries...................... 132
10.17 Initial Tender Offer........................................ 133
10.18 Secondary Tender Offer...................................... 134
10.19 Section 4.3(a)(i) Indebtedness.............................. 134
SECTION 11. Events of Default.......................................... 135
11.01 Payments.................................................... 135
11.02 Representations, etc........................................ 135
11.03 Covenants................................................... 135
11.04 Default Under Other Agreements.............................. 135
11.05 Bankruptcy, etc............................................. 136
11.06 ERISA....................................................... 136
11.07 Security Documents.......................................... 137
11.08 Guarantees.................................................. 137
11.09 Judgments................................................... 137
11.10 Change of Control........................................... 137
11.11 Receivables Facility........................................ 137
SECTION 12. Definitions and Accounting Terms........................... 138
12.01 Defined Terms............................................... 138
SECTION 13. The Agents................................................. 193
13.01 Appointment................................................. 193
13.02 Nature of Duties............................................ 193
13.03 Lack of Reliance on the Agent............................... 193
13.04 Certain Rights of the Agents................................ 194
13.05 Reliance.................................................... 194
13.06 Indemnification............................................. 194
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13.07 The Agents in their Individual Capacities................... 194
13.08 Holders..................................................... 195
13.09 Resignation by the Agents................................... 195
SECTION 14. Miscellaneous.............................................. 196
14.01 Payment of Expenses, etc. .................................. 196
14.02 Right of Setoff............................................. 197
14.03 Notices..................................................... 197
14.04 Benefit of Agreement........................................ 198
14.05 No Waiver; Remedies Cumulative.............................. 199
14.06 Payments Pro Rata........................................... 200
14.07 Calculations; Computations.................................. 200
14.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL............................... 201
14.09 Counterparts................................................ 202
14.10 Effectiveness............................................... 202
14.11 Headings Descriptive........................................ 202
14.12 Amendment or Waiver; etc.................................... 203
14.13 Survival.................................................... 204
14.14 Domicile of Loans........................................... 204
14.15 Register.................................................... 205
14.16 Confidentiality............................................. 205
14.17 Entitlement of Obligations to Restricted and Unrestricted
Collateral................................................ 206
14.18 Obligation to Make Payments in Dollars...................... 207
14.19 Post-Closing Actions........................................ 207
14.20 Agreement by Signatories to Fourth Amendment for Benefit of
Tranche C Banks........................................... 209
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(vi)
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SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Real Property
SCHEDULE IV Subsidiaries
SCHEDULE V Environmental Matters
SCHEDULE VI Existing Indebtedness
SCHEDULE VII Certain Restrictions on Subsidiaries
SCHEDULE VIII Insurance
SCHEDULE IX Existing Liens
SCHEDULE X Existing Investments
SCHEDULE XI Government Approvals
SCHEDULE XII CEAc Government Approvals
SCHEDULE XIII Real Property (including CEAc and its Subsidiaries)
SCHEDULE XIV Subsidiaries (including CEAc and its Subsidiaries)
SCHEDULE XV CEAc Environmental Matters
SCHEDULE XVI CEAc Existing Indebtedness
SCHEDULE XVII CEAc Restrictions on Subsidiaries
SCHEDULE XVIII CEAc Insurance
SCHEDULE XIX CEAc Existing Liens
SCHEDULE XX CEAc Existing Investments
SCHEDULE XXI Description of Shareholder Rights Plan
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Tranche A Term Note
EXHIBIT B-2 Tranche B Term Note
EXHIBIT B-3 Revolving Note
EXHIBIT B-4 Swingline Note
EXHIBIT B-5 Tranche C Term Note
EXHIBIT C-1 Tender Offer Credit Support
EXHIBIT C-2 Treasury Stock Letter of Credit
EXHIBIT C-3 Tudor Convertible Bond Letter of Credit
EXHIBIT C-4 Banesto Letter of Credit (Direct Indebtedness)
EXHIBIT C-5 Banesto Letter of Credit (Guarantee)
EXHIBIT C-6 Secondary Tender Offer Credit Support
EXHIBIT D Letter of Credit Request
EXHIBIT E Section 4.04(b)(ii) Certificate
EXHIBIT F-1 Opinion of Kirkland & Ellis
EXHIBIT F-2 Opinion of J&A Garrigues
EXHIBIT F-3 Opinion of Counsel to the Seller and Banesto
EXHIBIT G Officers' Certificate
EXHIBIT H-1 Domestic Subsidiaries Guaranty
EXHIBIT H-2 Tudor Guaranty
EXHIBIT I-1 Initial Pledge Agreement
(vii)
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EXHIBIT I-2 First Amendment to Initial Pledge Agreement
EXHIBIT J Security Agreement
EXHIBIT K Solvency Certificate
EXHIBIT L Consent Letter
EXHIBIT M Subrogation Rights Agreement
EXHIBIT N Intercompany Note
EXHIBIT O Subordination Provisions
EXHIBIT P Assignment and Assumption Agreement
EXHIBIT Q Borrowing Base Certificate
(viii)
<PAGE>
CREDIT AGREEMENT, dated as of August 30, 1994, among EXIDE
CORPORATION, a Delaware corporation (the "Company"), the BANKS party hereto from
time to time, BANKERS TRUST COMPANY, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION and BANK OF MONTREAL, as Agents, and BANKERS TRUST COMPANY, as
Administrative Agent (all capitalized terms used herein and defined in Section
12 are used herein as therein defined).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available to the Company the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
--------------------------
1.01 The Commitments. (a) Subject to and upon the terms and
---------------
conditions set forth herein, each Bank with a Tranche A Term Loan Commitment
severally agrees to make a loan or loans (each, a "Tranche A Term Loan" and,
collectively, the "Tranche A Term Loans") to the Company, which Tranche A Term
Loans:
(i) may be incurred by the Company (x) on the Initial Borrowing
Date and (y) on a single date occurring on, or within 10 days after, the
Initial Tender Offer Date (each date upon which Tranche A Term Loans are
made being herein called a "Tranche A Term Loan Borrowing Date");
(ii) made on either Tranche A Term Loan Borrowing Date, shall be
made and initially maintained as a Borrowing of Base Rate Loans (subject to
the option to convert such Tranche A Term Loans pursuant to Section 1.06);
and
(iii) made on either Tranche A Term Loan Borrowing Date, shall not
exceed for any Bank, in initial principal amount for the Tranche A Term
Loans being made by such Bank on such date, that amount which equals the
Tranche A Term Loan Commitment of such Bank as in effect on such date
(before giving effect to any reductions thereto on such date pursuant to
Section 3.03(b)(i) or (ii) but after giving effect to any reductions
thereto on or prior to such date pursuant to Section 3.03(b)(iii)).
<PAGE>
Once repaid, Tranche A Term Loans incurred hereunder may not be reborrowed.
Notwithstanding anything to the contrary contained in this Agreement, Revolving
Loans shall not be permitted to be incurred after the Initial Tender Offer Date
unless the full amount of the Total Tranche A Term Loan Commitment as in effect
on the Initial Tender Offer Date has been utilized through the incurrence of
Tranche A Term Loans to finance the payments owing pursuant to the Initial
Tender Offer.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with a Tranche B Term Loan Commitment severally agrees to make, on the
Initial Borrowing Date, a term loan (each, a "Tranche B Term Loan" and,
collectively, the "Tranche B Term Loans") to the Company, which Tranche B Term
Loans (i) shall be made and initially maintained as a single Borrowing of Base
Rate Loans (subject to the option to convert such Tranche B Term Loans pursuant
to Section 1.06) and (ii) shall be made by each Bank in that initial aggregate
principal amount as is equal to the Tranche B Term Loan Commitment of such Bank
on the Initial Borrowing Date (before giving effect to any reductions thereto on
such date pursuant to Section 3.03(c)(i) but after giving effect to any
reductions thereto on or prior to such date pursuant to Section 3.03(c)(ii)).
Once repaid, Tranche B Term Loans incurred hereunder may not be reborrowed.
Notwithstanding anything to the contrary contained in this Agreement, on the
Initial Borrowing Date the Company shall be required to utilize in full the
Total Tranche B Term Loan Commitment through the incurrence of Tranche B Term
Loans prior to the incurrence of any Tranche A Term Loan or Revolving Loan.
(c) Subject to and upon the terms and conditions set forth herein
(including without limitation the last sentence of Section 1.01(a)), each Bank
with a Revolving Loan Commitment severally agrees, at any time and from time to
time on and after the Initial Borrowing Date and prior to the Revolving Loan
Maturity Date, to make a revolving loan or revolving loans (each, a "Revolving
Loan" and, collectively, the "Revolving Loans") to the Company, which Revolving
Loans:
(i) shall, at the option of the Company, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that (A) except as otherwise specifically provided in Section
--------
1.10(b), all Revolving Loans comprising the same Borrowing shall at all
times be of the same Type and (B) no Revolving Loans maintained as
Eurodollar Loans may be incurred (including as a result of a conversion)
prior to the Syndication Termination Date;
(ii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iii) shall not exceed for any Bank at any time outstanding that
aggregate principal amount which, when added to the product of (x) such
Bank's Adjusted RL Percentage and (y) the sum of (I) the amount of all
Revolving Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid with the proceeds of, and
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simultaneously with the incurrence of, the respective incurrence of
Revolving Loans) at such time, and (II) the aggregate principal amount of
all Swingline Loans (exclusive of Swingline Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Adjusted
Available Revolving Loan Commitment of such Bank at such time;
(iv) shall not exceed for all Banks at any time outstanding that
aggregate principal amount which, when added to the sum of (x) the amount
of all Revolving Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) at such time
and (y) the aggregate principal amount of all Swingline Loans then
outstanding (exclusive of Swingline Loans which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans), equals the lesser of (a) the Borrowing Base
then in effect and (b) the Total Available Revolving Loan Commitment at
such time (after giving effect to any reductions to the Total Available
Revolving Loan Commitment on such date); and
(v) shall, if incurred between February 28 and March 31 of any
calendar year, be subject to compliance with the requirements of Section
4.02(a)(v).
In addition to the foregoing requirements, on the Initial Borrowing Date the
Total Unutilized Revolving Loan Commitment less the Blocked Commitment, each
determined on such date after giving effect to all Credit Events on such date,
shall be equal to or greater than an amount equal to the Minimum Unutilized
Revolving Loan Commitment.
(d) Subject to and upon the terms and conditions herein set forth,
the Swingline Bank agrees to make at any time and from time to time after the
Initial Borrowing Date and prior to the Swingline Expiry Date, a loan or loans
(each, a "Swingline Loan" and, collectively, the "Swingline Loans") to the
Company, which Swingline Loans:
(i) shall be made and maintained as Base Rate Loans;
(ii) may be repaid and reborrowed in accordance with the provisions
hereof;
(iii) shall not exceed in aggregate principal amount at any time
outstanding, when combined with the aggregate principal amount of (x) all
Revolving Loans made by Non-Defaulting Banks then outstanding and (y) the
Revolving Letter of Credit Outstandings at such time, an amount equal to
the Adjusted Total Available Revolving Loan Commitment at such time (after
giving effect to any changes thereto on such date);
-3-
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(iv) shall not exceed in aggregate principal amount at any time
outstanding, when combined with the aggregate principal amount of (x) all
Revolving Loans then outstanding and (y) the Revolving Letter of Credit
Outstandings at such time (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Swingline Loans), an amount equal to the Borrowing
Base then in effect;
(v) shall, if incurred between February 28 and March 31 of any
calendar year, be subject to compliance with the requirements of Section
4.02(a)(v); and
(vi) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount.
The Swingline Bank shall not make any Swingline Loan after receiving a written
notice from the Company or any Bank stating that a Default or an Event of
Default exists and is continuing until such time as the Swingline Bank shall
have received written notice of (i) rescission of all such notices from the
party or parties originally delivering such notice (which notice of rescission
such Person or Persons shall give to the Swingline Bank promptly upon the
discontinuance of such Default or Event of Default), (ii) the waiver of such
Default or Event of Default by the Required Banks or (iii) the Administrative
Agent in good faith believes that such Default or Event has ceased to exist.
(e) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the Banks that its outstanding Swingline Loans shall
be funded with a Borrowing of Revolving Loans (provided that such notice shall
--------
be deemed to have been automatically given upon the occurrence of a Default or
an Event of Default under Section 11.05 or upon the exercise of any of the
remedies provided in the last paragraph of Section 11), in which case a
Borrowing of Revolving Loans constituting Base Rate Loans (each such Borrowing,
a "Mandatory Borrowing") shall be made on the immediately succeeding Business
Day by all Banks with a Revolving Loan Commitment (without giving effect to any
reductions thereto pursuant to the last paragraph of Section 11) pro rata based
--- ----
on each Bank's Adjusted RL Percentage (determined before giving effect to any
termination of the Revolving Loan Commitments pursuant to the last paragraph of
Section 11) and the proceeds thereof shall be applied directly to the Swingline
Bank to repay the Swingline Bank for such outstanding Swingline Loans. Each such
Bank hereby irrevocably agrees to make Revolving Loans upon one Business Day's
notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by the
Swingline Bank notwithstanding (i) the amount of the Mandatory Borrowing may not
comply with the minimum amount for Borrowings otherwise required hereunder, (ii)
whether any conditions specified in Section 7 are then satisfied, (iii) whether
a Default or an Event of Default then exists, (iv) the date of such Mandatory
Borrowing and (v) the amount of the Total Available Revolving Loan Commitment,
the Borrowing Base or the Adjusted Total Available Revolving Loan Commitment at
such time.
-4-
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In the event that any Mandatory Borrowing 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
Company), then each such Bank hereby agrees that it shall forthwith purchase (as
of the date the Mandatory Borrowing would otherwise have occurred, but adjusted
for any payments received from the Company on or after such date and prior to
such purchase) from the Swingline Bank such participations in the outstanding
Swingline Loans as shall be necessary to cause such Banks to share in such
Swingline Loans ratably based upon their respective Adjusted RL Percentages
(determined before giving effect to any termination of the Revolving Loan
Commitments pursuant to the last paragraph of Section 11), provided that (x) all
--------
interest payable on the Swingline Loans shall be for the account of the
Swingline Bank until the date as of which the respective participation is
required to be purchased and, to the extent attributable to the purchased
participation, shall be payable to the participant from and after such date and
(y) at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Bank shall be required to pay the Swingline Bank
interest on the principal amount of participation purchased for each day from
and including the day upon which the Mandatory Borrowing would otherwise have
occurred to but excluding the date of payment for such participation, at the
overnight Federal Funds Rate for the first three days and at the rate otherwise
applicable to Revolving Loans maintained as Base Rate Loans hereunder for each
day thereafter.
(f) Subject to and upon the terms and conditions set forth herein,
each Bank with a Tranche C Term Loan Commitment severally agrees to make, on the
Tranche C Term Loan Borrowing Date, a term loan (each, a "Tranche C Term Loan"
and, collectively, the "Tranche C Term Loans") to the Company, which Tranche C
Term Loans (i) shall be made and initially maintained as a single Borrowing of
Base Rate Loans (subject to the option to convert such Tranche C Term Loans
pursuant to Section 1.06) and (ii) shall be made by each Bank in that initial
aggregate principal amount as is equal to the Tranche C Term Loan Commitment of
such Bank on the Tranche C Term Loan Borrowing Date (before giving effect to any
reductions thereto on such date pursuant to Section 3.03(n) but after giving
effect to any reductions thereto on or prior to such date pursuant to Section
3.03 (o) and (p)). Once repaid, Tranche C Term Loans incurred hereunder may not
be reborrowed./1/
1.02 Minimum Amount of Each Borrowing. The aggregate principal
--------------------------------
amount of each Borrowing of any Tranche of Term Loans shall not be less than
$10,000,000. The aggregate principal amount of each Borrowing of Revolving Loans
shall be not less than (x) in the case of a Borrowing of Eurodollar Loans,
$10,000,000 and (y) in the case of a Borrowing of Base Rate Loans, $1,000,000,
provided that Mandatory Borrowings shall be made in the amounts required by
- --------
Section 1.01(e). The aggregate principal amount of each Borrowing of Swingline
Loans shall not be less than $500,000.
______________________
/1/ The Tranche C Term Loan Commitment was terminated on April 19, 1995.
-5-
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More than one Borrowing may occur on the same date, but at no time shall there
be outstanding more than ten Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Company desires to make
-------------------
a Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Administrative Agent at its Notice Office at
least one Business Day's prior written (or telephonic notice promptly confirmed
in writing) notice of each Base Rate Loan and at least three Business Days'
prior written (or telephonic notice promptly confirmed in writing) notice of
each Eurodollar Loan to be made hereunder, provided that any such notice shall
--------
be deemed to have been given on a certain day only if given before 1:00 P.M.
(New York time) on such day. Each such written notice or written confirmation of
telephonic notice (each a "Notice of Borrowing"), except as otherwise expressly
provided in Section 1.10, shall be irrevocable and shall be given by the Company
in the form of Exhibit A, appropriately completed to specify the aggregate
principal amount of the Loans to be made pursuant to such Borrowing, the date of
such Borrowing (which shall be a Business Day), whether the Loans being made
pursuant to such Borrowing shall constitute Tranche A Term Loans, Tranche B Term
Loans, Tranche C Term Loans or Revolving Loans and whether the Loans being made
pursuant to such Borrowing are to be initially maintained as Base Rate Loans or
Eurodollar Loans and, if Eurodollar Loans, the initial Interest Period to be
applicable thereto. The Administrative Agent shall promptly give each Bank which
is required to make Loans of the Tranche specified in the respective Notice of
Borrowing, notice of such proposed Borrowing, of such Bank's proportionate share
thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.
(b)(i) Whenever the Company desires to make a Borrowing of Swingline
Loans hereunder, it shall give the Swingline Bank not later than 1:00 P.M. (New
York time) on the date that a Swingline Loan is to be made, written notice or
telephonic notice promptly confirmed in writing of each Swingline Loan to be
made hereunder. Each such notice shall be irrevocable and specify in each case
(A) the date of Borrowing (which shall be a Business Day) and (B) the aggregate
principal amount of the Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(e), with the Company irrevocably agreeing, by its incurrence of any
Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(e).
(c) Without in any way limiting the obligation of the Company to
confirm in writing any telephonic notice of any Borrowing of Loans, the
Administrative Agent or the Swingline Bank, as the case may be, may act without
liability upon the basis of telephonic notice of such Borrowing, believed by the
Administrative Agent or the Swingline Bank, as the case may be, in good faith to
be from the Chairman of the Board, the Chief Financial Officer, the President,
the Treasurer, any Assistant Treasurer or any Controller of the Company (or any
other officer of the Company designated in writing to the
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<PAGE>
Administrative Agent and the Swingline Bank by the Chairman of the Board, the
Chief Financial Officer, the President or the Treasurer as being authorized to
give such notices under this Agreement) prior to receipt of written
confirmation. In each such case, the Company hereby waives the right to dispute,
absent manifest error, the Administrative Agent's and the Swingline Bank's
record of the terms of such telephonic notice of such Borrowing of Loans.
1.04 Disbursement of Funds. Except as otherwise specifically
---------------------
provided in the immediately succeeding sentence, no later than 12:00 Noon (New
York time) on the date specified in each Notice of Borrowing (or (x) in the case
of Swingline Loans, not later than 3:00 P.M. (New York time) on the date
specified pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory
Borrowings, not later than 12:00 Noon (New York time) on the date specified in
Section 1.01(e), each Bank with a Commitment of the respective Tranche will make
available its pro rata portion (determined in accordance with Section 1.07) of
--- ----
each such Borrowing requested to be made on such date (or in the case of
Swingline Loans, the Swingline Bank shall make available the full amount
thereof). All such amounts shall be made available in Dollars and in immediately
available funds at the Payment Office of the Administrative Agent, and the
Administrative Agent will make available to the Company at the Payment Office
the aggregate of the amounts so made available by the Banks. Unless the
Administrative Agent shall have been notified by any Bank prior to the date of
Borrowing that such Bank does not intend to make available to the Administrative
Agent such Bank's portion of any Borrowing to be made on such date, the
Administrative Agent may assume that such Bank has made such amount available to
the Administrative Agent on such date of Borrowing and the Administrative Agent
may, in reliance upon such assumption, make available to the Company a
corresponding amount. If such corresponding amount is not in fact made available
to the Administrative Agent by such Bank, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such Bank. If such
Bank does not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly notify the
Company and the Company shall immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
on demand from such Bank or the Company, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Company until the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (i) if recovered from such Bank, at the overnight
Federal Funds Rate and (ii) if recovered from the Company, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 1.08.
Nothing in this Section 1.04 shall be deemed to relieve any Bank from its
obligation to make Loans hereunder or to prejudice any rights which the Company
may have against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) The Company's obligation to pay the principal of,
-----
and interest on, the Loans made by each Bank shall be evidenced (i) if Tranche A
Term Loans, by a promissory note duly executed and delivered by the Company
substantially in the form
-7-
<PAGE>
of Exhibit B-1, with blanks appropriately completed in conformity herewith
(each, a "Tranche A Term Note" and, collectively, the "Tranche A Term Notes"),
(ii) if Tranche B Term Loans, by a promissory note duly executed and delivered
by the Company substantially in the form of Exhibit B-2, with blanks
appropriately completed in conformity herewith (each, a "Tranche B Term Note"
and, collectively, the "Tranche B Term Notes"), (iii) if Revolving Loans, by a
promissory note duly executed and delivered by the Company substantially in the
form of Exhibit B-3, with blanks appropriately completed in conformity herewith
(each, a "Revolving Note" and, collectively, the "Revolving Notes"), (iv) if
Swingline Loans, by a promissory note duly executed and delivered by the Company
substantially in the form of Exhibit B-4, with blanks appropriately completed in
conformity herewith (the "Swingline Note") and (vi) if Tranche C Term Loans, by
a promissory note duly executed and delivered by the Company substantially in
the form of Exhibit B-5, with blanks appropriately completed in conformity
herewith (each, a "Tranche C Term Note" and, collectively, the "Tranche C Term
Notes").
(b) The Tranche A Term Note issued to each Bank shall (i) be executed
by the Company, (ii) be payable to the order of such Bank and be dated the
Initial Borrowing Date, (iii) be in a stated principal amount equal to the
Tranche A Term Loan Commitment of such Bank as in effect on the Initial
Borrowing Date (and before giving effect to any reductions thereto as a result
of the making of Tranche A Term Loans by such Bank on such date) and be payable
in the principal amount of Tranche A Term Loans evidenced thereby from time to
time, (iv) mature on the Tranche A Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to mandatory repayment as provided in Section 4.02 and (vii) be entitled
to the benefits of this Agreement and the other Credit Documents.
(c) The Tranche B Term Note issued to each Bank shall (i) be executed
by the Company, (ii) be payable to the order of such Bank and be dated the
Initial Borrowing Date, (iii) be in a stated principal amount equal to the
Tranche B Term Loans made by such Bank on the Initial Borrowing Date and be
payable in the principal amount of Tranche B Term Loans evidenced thereby from
time to time, (iv) mature on the Tranche B Term Loan Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(d) The Tranche C Term Note issued to each Bank shall (i) be executed
by the Company, (ii) be payable to the order of such Bank and be dated the
Tranche C Term Loan Borrowing Date, (iii) be in a stated principal amount equal
to the Tranche C Term Loan made by such Bank on the Tranche C Term Loan
Borrowing Date and be payable in the principal amount of the Tranche C Term Loan
evidenced thereby from time to time, (iv) mature on the Tranche C Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
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<PAGE>
as the case may be, evidenced thereby, (vi) be subject to mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(e) The Revolving Note issued to each Bank shall (i) be executed by
the Company, (ii) be payable to the order of such Bank and be dated the Initial
Borrowing Date, (iii) be in a stated principal amount equal to the Revolving
Loan Commitment of such Bank and be payable in the principal amount of the
Revolving Loans evidenced thereby from time to time, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans,
as the case may be, evidenced thereby, (vi) be subject to mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.
(f) The Swingline Note issued to the Swingline Bank shall (i) be
executed by the Company, (ii) be payable to the order of the Swingline Bank and
be dated the Initial Borrowing Date, (iii) be in a stated principal amount equal
to the Maximum Swingline Amount and be payable in the principal amount of the
Swingline Loans evidenced thereby from time to time, (iv) mature on the
Swingline Expiry Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans evidenced thereby and (vi) be
entitled to the benefits of this Agreement and the other Credit Documents.
(g) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in any such notation or endorsement shall not affect the Company's
obligations in respect of such Loans.
1.06 Conversions. The Company shall have the option to convert, on
-----------
any Business Day occurring on or after the Syndication Termination Date (or, in
the case of Tranche C Term Loans, the Tranche C Syndication Termination Date),
all or a portion equal to at least (x) in the case of a conversion of Term
Loans, $10,000,000 and (y) in the case of a conversion of Revolving Loans,
$10,000,000 (or $1,000,000 in the case of a conversion into Revolving Loans to
be maintained as Base Rate Loans) of the outstanding principal amount of Loans
(other than Swingline Loans, which may not be converted pursuant to this Section
1.06) made pursuant to one or more Borrowings (so long as of the same Tranche)
of one Type of Loan into a Borrowing (of the same Tranche) of another Type of
Loan; provided, that (i) except as otherwise provided in Section 1.10(b),
--------
Eurodollar Loans may be converted into Base Rate Loans only on the last day of
an Interest Period applicable to the Loans being converted and no such partial
conversion of Eurodollar Loans shall reduce the outstanding principal amount of
such Eurodollar Loans made pursuant to a single Borrowing to less than
$10,000,000, (ii) Base Rate Loans may only be converted into Eurodollar Loans if
no Default or Event of Default is in existence on the
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<PAGE>
date of the conversion and (iii) no conversion pursuant to this Section 1.06
shall result in a greater number of Borrowings of Eurodollar Loans than is
permitted under Section 1.02. Each such conversion shall be effected by the
Company by giving the Administrative Agent at its Notice Office prior to 1:00
P.M. (New York time) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) (each, a "Notice of
Conversion") specifying the Loans to be so converted, the Borrowing(s) pursuant
to which such Loans were made and, if to be converted into Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall give each Bank prompt notice of any such proposed conversion affecting any
of its Loans. Upon any such conversion the proceeds thereof will be deemed to be
applied directly on the day of such conversion to prepay the outstanding
principal amount of the Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Tranche A Term Loans,
-------------------
Tranche B Term Loans, Tranche C Term Loans and Revolving Loans under this
Agreement shall be incurred from the Banks pro rata on the basis of their
--- ----
respective Tranche A Term Loan Commitments, Tranche B Term Loan Commitments,
Tranche C Term Loan Commitments or Revolving Loan Commitments, as the case may
be; provided, that all Borrowings of Revolving Loans made pursuant to a
--------
Mandatory Borrowing shall be incurred from the Banks with a Revolving Loan
Commitment pro rata on the basis of their Adjusted RL Percentages. It is
--- ----
understood that no Bank shall be responsible for any default by any other Bank
of its obligation to make Loans hereunder and that each Bank shall be obligated
to make the Loans provided to be made by it hereunder, regardless of the failure
of any other Bank to make its Loans hereunder.
1.08 Interest. (a) The Company agrees to pay interest in respect of
--------
the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Company until the earlier of (i) the maturity
(whether by acceleration or otherwise) of such Base Rate Loan and the (ii) the
conversion of such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06,
at a rate per annum which shall be equal to the sum of the Applicable Margin
plus the Base Rate in effect from time to time.
(b) The Company agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof are
made available to the Company until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion of
such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06 or 1.09, as
applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the
Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(i) 2% per annum in excess of the rate otherwise applicable to Base Rate Loans
prior to maturity of the respective
-10-
<PAGE>
Tranche of Loans from time to time and (ii) the rate which is 2% in excess of
the rate then borne by such Loans, in each case with such interest to be payable
on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, on any repayment
or prepayment (except voluntary prepayments of Revolving Loans and Swingline
Loans maintained as Base Rate Loans where the Total Revolving Loan Commitment
has not been, and is not then being, terminated) (on the amount repaid or
prepaid), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for the respective Interest Period or
Interest Periods and shall promptly notify the Company and the Banks thereof.
Each such determination shall, absent manifest error, be final and conclusive
and binding on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of Borrowing
----------------
or Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or on the third Business Day prior to the expiration of an Interest Period
applicable to such Eurodollar Loan (in the case of any subsequent Interest
Period), the Company shall have the right to elect, by giving the Administrative
Agent notice thereof, the interest period (each an "Interest Period") applicable
to such Eurodollar Loan, which Interest Period shall, at the option of the
Company, be a one, two, three or six-month period; provided, that:
--------
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Eurodollar Loan
shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on
a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end on
the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business
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<PAGE>
Day; provided, however, that if any Interest Period for a Eurodollar Loan
-------- -------
would otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period may be selected at any time when a Default
or Event of Default is then in existence;
(vi) no Interest Period shall be selected which extends beyond (x)
in the case of Tranche A Term Loans, the Tranche A Term Loan Maturity Date,
(y) in the case of Tranche B Term Loans, the Tranche B Term Loan Maturity
Date or (z) in the case of Revolving Loans, the Revolving Loan Maturity
Date;
(vii) no Interest Period in respect of any Borrowing of Tranche A
Term Loans, Tranche B Term Loans or Tranche C Term Loans, as the case may
be, shall be selected which extends beyond any date upon which a mandatory
repayment of such Tranche of Term Loans will be required to be made under
Section 4.02(b), (c) or (n), as the case may be, if the aggregate principal
amount of Tranche A Term Loans, Tranche B Term Loans or Tranche C Term
Loans, as the case may be, which have Interest Periods which will expire
after such date will be in excess of the aggregate principal amount of
Tranche A Term Loans, Tranche B Term Loans or Tranche C Term Loans, as the
case may be, then outstanding less the aggregate amount of such required
prepayment; and
(viii) no Interest Period in respect of any Borrowing of Revolving
Loans shall be selected which extends beyond any date upon which a
mandatory repayment of the Revolving Loans will be required to be made
under Section 4.02(a), as a result of reductions to the Total Revolving
Loan Commitment pursuant to Section 3.03(d), unless the aggregate principal
amount of Revolving Loans which are Base Rate Loans or which have Interest
Periods which will expire on or before such date will be sufficient to make
such required prepayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Company has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Company shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
---------------------------------
Bank shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
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<PAGE>
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to: (A) a change in the basis of
taxation of payment to any Bank of the principal of or interest on the
Notes or any other amounts payable hereunder (except for changes with
respect to any tax imposed on or measured by the net income or profits of
such Bank pursuant to the laws in which its principal office or applicable
lending office is located or any subdivision thereof or therein), or (B) a
change in official reserve requirements, but, in all events, excluding
reserves required under Regulation D to the extent included in the
computation of the Eurodollar Rate and/or (y) other circumstances since the
date of this Agreement affecting such Bank or the interbank Eurodollar
market or the position of such Bank in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by any Bank in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Company and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the
case of clause (i) above, Eurodollar Loans shall no longer be available until
such time as the Administrative Agent notifies the Company and the Banks that
the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Company with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Company, (y)
in the case of clause (ii) above, the Company shall pay to such Bank, upon
written demand therefor, such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the additional amounts owed to such
Bank, showing the
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<PAGE>
basis for the calculation thereof, submitted to the Company by such Bank in good
faith shall, absent manifest error, be final and conclusive and binding on all
the parties hereto) and (z) in the case of clause (iii) above, the Company shall
take one of the actions specified in Section 1.10(b) as promptly as possible
and, in any event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Company may (and in
the case of a Eurodollar Loan affected by the circumstances described in Section
1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then being
made initially or pursuant to a conversion, cancel the respective Borrowing by
giving the Administrative Agent telephonic notice (confirmed in writing) on the
same date that the Company was notified by the affected Bank or the
Administrative Agent pursuant to Section 1.10(a)(ii) or (iii), or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days'
written notice to the Administrative Agent, require the affected Bank to convert
such Eurodollar Loan into a Base Rate Loan; provided, that, if more than
--------
one Bank is affected at any time, then all affected Banks must be treated the
same pursuant to this Section 1.10(b).
(c) If at any time after the date of this Agreement any Bank
determines that the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Commitments
hereunder or its obligations hereunder, then the Company shall pay to such Bank,
upon its written demand therefor, such additional amounts as shall be required
to compensate such Bank or such other corporation for the increased cost to such
Bank or such other corporation or the reduction in the rate of return to such
Bank or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Bank will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable,
provided that such Bank's reasonable good faith determination of compensation
- --------
owing under this Section 1.10(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Bank, upon determining
that any additional amounts will be payable pursuant to this Section 1.10(c),
will give prompt written notice thereof to the Company, which notice shall show
the basis for calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish any of the Company's
obligations to pay additional amounts pursuant to this Section 1.10(c).
1.11 Compensation. The Company shall compensate each Bank, upon its
------------
written request (which request shall set forth the basis for requesting such
compensation), for all losses, expenses and liabilities (including, without
limitation, any loss, expense or liability incurred by reason of the liquidation
or reemployment of deposits or other funds required by such Bank to fund its
Eurodollar Loans) which such Bank may sustain: (i) if
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<PAGE>
for any reason (other than a default by such Bank or the Administrative Agent) a
Borrowing of, or conversion from or into, Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by the Company or deemed withdrawn pursuant to Section
1.10(a)); (ii) if any repayment (including any repayment made pursuant to
Section 4.01 or 4.02 or a result of an acceleration of the Loans pursuant to
Section 11) or conversion of any of its Eurodollar Loans occurs on a date which
is not the last day of an Interest Period with respect thereto; (iii) if any
prepayment of any of its Eurodollar Loans is not made on any date specified in a
notice of prepayment given by the Company; or (iv) as a consequence of (x) any
other default by the Company to repay its Loans when required by the terms of
this Agreement or any Note held by such Bank or (y) any election made pursuant
to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that upon the
------------------------
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Bank,
it will, if requested by the Company, use reasonable efforts (subject to overall
policy considerations of such Bank) to designate another lending office for any
Loans or Letters of Credit affected by such event; provided, that such
--------
that such designation is made on such terms that such Bank and its lending
office suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Company or the right of any Bank provided in Sections 1.10,
2.06 and 4.04.
1.13 Replacement of Banks. If any Bank (x) becomes a Defaulting
--------------------
Bank, (y) refuses to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks as provided in Section 14.12(b) or, (z) is owed increased costs
under Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section
4.04 in a material amount in excess of those being generally charged by the
other Banks, the Company shall have the right, if no Default or Event of Default
then exists or will exist immediately after giving effect to the respective
replacement, to either replace such Bank (the "Replaced Bank") with one or more
Eligible Transferee or Transferees (collectively, the"Replacement Bank"), none
of whom shall constitute a Defaulting Bank at the time of such replacement and
each of whom shall be acceptable to the Administrative Agent and each Bank which
at the time of such replacement is an Issuing Bank with respect to one or more
outstanding Letters of Credit (unless the respective Replacement Bank is not
acquiring any participations in such outstanding Letters of Credit) or, at the
option of the Company, to replace only (a) the Revolving Loan Commitment (and
outstandings pursuant thereto) of the Replaced Bank with an identical Revolving
Loan Commitment provided by the Replacement Bank or (b) in the case of a
replacement as provided in Section 14.12(b) where the consent of the respective
Bank is required with respect to less than all Tranches of its Loans or
Commitments, the Commitments and/or outstanding Term Loans of such Bank in
respect of each Tranche where the consent of such Bank would otherwise be
individually required, with identical
-15-
<PAGE>
Commitments and/or Loans of the respective Tranche provided by the Replacement
Bank; provided, that:
--------
(i) at the time of any replacement pursuant to this Section 1.13,
the Replacement Bank shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 14.04(b) (and with all fees payable pursuant
to said Section 14.04(b) to be paid by the Replacement Bank) pursuant to
which the Replacement Bank shall acquire all of the Commitments and
outstanding Loans of, and participations in Letters of Credit by (or, in
the case of the replacement of only (a) the Revolving Loan Commitment, the
Revolving Loan Commitment and outstanding Revolving Loans and
participations in Revolving Letter of Credit Outstandings, (b) the Tranche
A Term Loan Commitment, the Tranche A Term Loan Commitment and outstanding
Tranche A Term Loans and participations in Tranche A Letter of Credit
Outstandings, (c) the Tranche C Term Loan Commitment, such Tranche C Term
Loan Commitment and/or (d) the outstanding Term Loan of one or more
Tranches, the outstanding Term Loans of the respective Tranche or Tranches)
the Replaced Bank and, in connection therewith, shall pay to (x) the
Replaced Bank in respect thereof an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on, all
outstanding Loans (or of the Loans of the respective Tranche or Tranches
being replaced), (B) an amount equal to all Unpaid Drawings (unless there
are no Unpaid Drawings with respect to the Tranche or Tranches being
replaced) that have been funded by (and not reimbursed to) such Replaced
Bank, together with all then unpaid interest with respect thereto at such
time and (C) an amount equal to all accrued, but theretofore unpaid, Fees
owing to the Replaced Bank (but only with respect to the relevant Tranche,
in the case of the replacement of less than all Tranches of Loans then held
by the respective Replaced Bank) pursuant to Section 3.01, (y) except in
the case of the replacement of only the outstanding Term Loans of one or
more Tranches of a Replaced Bank, the respective Issuing Bank an amount
equal to such Replaced Bank's Adjusted RL Percentage, in the case of the
assignment of Revolving Loans, and TL Percentage, in the case of an
assignment of Tranche A Term Loan Commitments (in each case for this
purpose, determined as if the adjustment described in clause (y) of the
immediately succeeding sentence had been made with respect to such Replaced
Bank) of any applicable Unpaid Drawing (which at such time remains an
Unpaid Drawing) of the relevant Tranche with respect to a Letter of Credit
issued by such Issuing Bank to the extent such amount was not theretofore
funded by such Replaced Bank and (z) in the case of any replacement of
Revolving Loan Commitments, the Swingline Bank an amount equal to such
Replaced Bank's Adjusted RL Percentage of any Mandatory Borrowing to the
extent such amount was not theretofore funded by such Replaced Bank; and
(ii) all obligations of the Company owing to the Replaced Bank
(other than those (a) specifically described in clause (i) above in respect
of which the assignment purchase price has been, or is concurrently being,
paid or (b) relating
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to any Tranche of Loans and/or Commitments of the respective Replaced Bank
which will remain outstanding after giving effect to the respective
replacement) shall be paid in full to such Replaced Bank concurrently with
such replacement.
Upon the execution of the respective Assignment and Assumption Agreements, the
payment of amounts referred to in clauses (i) and (ii) above, recordation of the
assignment on the Register by the Administrative Agent pursuant to Section 14.15
and, if so requested by the Replacement Bank, delivery to the Replacement Bank
of the appropriate Note or Notes executed by the Company, (x) the Replacement
Bank shall become a Bank hereunder and, unless the respective Replaced Bank
continues to have outstanding Term Loans, a Tranche A Term Loan Commitment, a
Tranche C Term Loan Commitment or a Revolving Loan Commitment hereunder, the
Replaced Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation,
Sections 1.10, 1.11, 2.06, 4.04, 14.01 and 14.06), which shall survive as to
such Replaced Bank and (y) except in the case of the replacement of only
outstanding Term Loans (and not Tranche A Term Loan Commitments) of one or more
Tranches, the Adjusted RL Percentages and/or TL Percentages, as the case may be,
of the Banks shall be automatically adjusted at such time to give effect to such
replacement.
SECTION 2. Letters of Credit; Bank Guarantees.
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2.01 Letters of Credit; Bank Guarantees. (a) Subject to and upon
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the terms and conditions herein set forth, the Company may request:
(i) any Issuing Bank at any time and from time to time on or after
the Initial Borrowing Date and prior to the third Business Day preceding
the Revolving Loan Maturity Date to issue, (x) no Letter of Credit shall be
issued the initial Stated Amount of which (or the Revolving Allocated
Portion of which, in the case of the Initial Tender Offer Credit Support),
when added to the Revolving Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid on the date of, and prior to the issuance
of, the respective Letter of Credit) at such time, would exceed either (1)
the Letter of Credit Limit at such time or (2) when added to the aggregate
principal amount of all Revolving Loans made by Non-Defaulting Banks then
outstanding and Swingline Loans then outstanding, an amount equal to the
Adjusted Total Available Revolving Loan Commitment at such time (after
giving effect to any changes thereto on such date, including as a result of
the decrease, if any, of the Blocked Commitment as a result of the issuance
of the respective Letter of Credit), or (3) when added to the aggregate
principal amount of all Revolving Loans and Swingline Loans then
outstanding, an amount equal to the Borrowing Base then in effect, and (y)
for the account of the Company and for the benefit of Sellers of raw
materials or other supplies to the Company of any of its Subsidiaries
(except Tudor and its Subsidiaries), an irrevocable documentary letter of
credit in a form customarily used by such Issuing Bank or in such other
form as has been approved by such Issuing Bank and the Administrative Agent
(each such
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documentary letter of credit, a "Trade Letter of Credit", and each such
Trade Letter of Credit and each Standby Letter of Credit, an "Exide Letter
of Credit") in support of commercial transactions of the Company and its
Subsidiaries (except Tudor and its Subsidiaries); and
(ii) BA to issue on the Initial Borrowing Date or at any time
thereafter and prior to December 31, 1994, for the account of the Company
in favor of Servicio de Liquidacion y Compensacion de Valores ("SLCV") for
the benefit of Tudor Shareholders and Tudor Convertible Bondholders, an
irrevocable bank guarantee in substantially the form of Exhibit C-1, in
support of the payment obligations of the Company pursuant to the Initial
Tender Offer (such bank guarantee, the "Initial Tender Offer Credit
Support");
(iii) any Issuing Bank to issue on, or within 10 days after, the
Seller Tender Date, for the account of the Company and for the benefit of
the Seller, an irrevocable standby letter of credit, in substantially the
form of Exhibit C-2, in support of the obligations of the Company to make
payments in connection with the Treasury Stock Repurchase as a result of
the exercise of the put and call option in accordance with the Purchase
Agreement (such standby letter of credit, the "Treasury Stock Letter of
Credit");
(iv) any Issuing Bank to issue on, or within 10 days after, the
Seller Tender Date, for the account of the Company and for the benefit of
the Seller, an irrevocable standby letter of credit, in substantially the
form of Exhibit C-3 in support of the obligations of Tudor to make payments
with respect to the Tudor Convertible Bonds held by the Seller which, in
accordance with the Purchase Agreement, will not be converted or tendered
pursuant to the Tender Offer (such standby letter of credit, the "Tudor
Convertible Bond Letter of Credit");
(v) any Issuing Bank to issue on, or within 10 days after, the
Seller Tender Date, for the account of the Company and for the benefit of
Banesto (or the respective banking subsidiary or affiliate of Banesto which
is the creditor), one or more irrevocable standby letters of credit, each
in substantially the form of Exhibit C-4 (in the case of indebtedness held
by Banesto) or C-5 (in the case of indebtedness guaranteed by Banesto), in
each case with any changes agreed to by the Company and deemed necessary or
desirable by the respective Issuing Bank to take into account differences
in the underlying obligations being supported, with each such standby
letter of credit to be issued in support of the obligations of Tudor and/or
its Subsidiaries to make payments in respect of the Banesto Debt pursuant
to the Banesto Debt Documents (each such standby letter of credit, a
"Banesto Letter of Credit");
(vi) any Issuing Bank to issue on the Secondary Tender Offer Filing
Date, for the account of the Company in favor of SLCV and for the benefit
of
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Tudor Shareholders and Tudor Convertible Bondholders, a bank guarantee in
substantially the form of Exhibit C-6, in support of the payment
obligations of the Company pursuant to the Secondary Tender Offer (such
bank guarantee, the "Secondary Tender Offer Credit Support"); and
(vii) any Issuing Bank at any time and from time to time on or after
the Initial Tender Offer Date and prior to the third Business Day preceding
the Revolving Loan Maturity Date, to issue, for the account of the Company
and for the benefit of any holders (or any trustee, agent or other similar
representative for any such holders) of Additional Tudor Supportable
Indebtedness of Tudor or any of its Subsidiaries, an irrevocable standby
letter of credit in a form customarily used by such Issuing Bank or in such
other form as has been approved by such Issuing Bank and the Administrative
Agent (each such standby letter of credit, an "Additional Tudor Letter of
Credit"), in support of said Additional Tudor Supportable Indebtedness.
(b) All Letters of Credit shall be denominated in Dollars; provided,
--------
however, that (i) the Initial Tender Offer Credit Support, the Secondary Tender
- -------
Offer Credit Support, the Tudor Convertible Bond Letter of Credit and the
Treasury Stock Letter of Credit shall be issued in Pesetas and (ii) as requested
by the Company, Banesto Letters of Credit and Additional Tudor Letters of Credit
shall be issued in Pesetas or Escudos or such other currencies as are acceptable
to the respective Issuing Bank and the Administrative Agent, in each case as
required to support the underlying obligations covered by the respective Letter
of Credit.
(c)(i) Each of BTCo, BA and BMO hereby agrees that it will, subject
to the terms and conditions contained herein, on the Initial Tender Offer Filing
Date in the case of the Initial Tender Offer Credit Support, following its
receipt of a Letter of Credit Request in respect thereof, issue for the account
of the Company the Initial Tender Offer Credit Support as referenced in Section
2.01(a) and (ii) each Issuing Bank hereby agrees that it will, subject to the
terms and conditions contained herein, (I) at any time and from time to time, on
or after the Initial Borrowing Date and prior to the third Business Day
preceding the Revolving Loan Maturity Date, in the case of Exide Letters of
Credit, (II) on, or within 10 days after, the Seller Tender Date in the case of
the Treasury Stock Letter of Credit, the Tudor Convertible Bond Letter of Credit
and the Banesto Letters of Credit, (III) on or after the Initial Tender Offer
Date and prior to the third Business Day preceding the Revolving Loan Maturity
Date, in the case of Additional Tudor Letters of Credit and (IV) on the
Secondary Tender Offer Filing Date, in the case of the Secondary Tender Offer
Credit Support, in each case following its receipt of the respective Letter of
Credit Request, issue for the account of the Company one or more Letters of
Credit as described above; provided, that, (x) in the case of any Letter of
--------
Credit to be denominated in a currency other than Dollars, the respective
Issuing Bank may designate a local affiliate of such Issuing Bank to be the
issuer of such Letter of Credit (and for purposes of this Agreement, such Letter
of Credit shall be treated fully as if issued by the respective Issuing Bank)
and (y)
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in no case shall any Issuing Bank be under any obligation to issue any Letter of
Credit as described above if at the time of such issuance:
(A) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over such Issuing Bank shall prohibit, or request that such Issuing Bank
refrain from, the issuance of letters of credit or, in the case of the
Initial Tender Offer Credit Support or Secondary Tender Offer Credit
Support, bank guarantees generally or such Letter of Credit in particular
or shall impose upon such Issuing Bank with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which such
Issuing Bank is not otherwise compensated) not in effect on the date
hereof, or any unreimbursed loss, cost or expense which was not applicable,
in effect or known to such Issuing Bank as of the date hereof and which
such Issuing Bank in good faith deems material to it; or
(B) such Issuing Bank shall have received notice from any Bank prior
to the issuance of such Letter of Credit that one or more of the applicable
conditions specified in Section 5, 6 or 7 are not then satisfied, or that
the issuance of such Letter of Credit would violate Section 2.01(d).
(d) Notwithstanding the foregoing:
(i) (x) no Letter of Credit shall be issued the initial Stated
Amount of which (or the Revolving Allocated Portion of which, in the case
of the Initial Tender Offer Credit Support), when added to the Revolving
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid on the date of, and prior to the issuance of, the respective Letter
of Credit) at such time, would exceed either (1) the Letter of Credit Limit
at such time or (2) when added to the aggregate principal amount of all
Revolving Loans made by Non-Defaulting Banks then outstanding and Swingline
Loans then outstanding, an amount equal to the Adjusted Total Available
Revolving Loan Commitment at such time (after giving effect to any changes
thereto on such date, including as a result of the decrease, if any, of the
Blocked Commitment as a result of the issuance of the respective Letter of
Credit), provided that, with respect to Letters of Credit issued on the
--------
Initial Borrowing Date, it shall also be required that the Total Unutilized
Revolving Loan Commitment on the Initial Borrowing Date (after giving
effect to all Credit Events on such date) less the Blocked Commitment on
such date shall be equal to or greater than an amount equal to the Minimum
Unutilized Revolving Loan Commitment, and (y) each Letter of Credit (other
than the Initial Tender Offer Credit Support and Secondary Tender Offer
Credit Support, which shall be in the forms required above) shall by its
terms terminate on or before the earlier of (A) the date which occurs 12
months after the date of the issuance thereof (although any
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such Letter of Credit may be extendable for successive periods of up to 12
months, but not beyond the third Business Day preceding the Revolving Loan
Maturity Date, on terms acceptable to the Administrative Agent and the
relevant Issuing Bank, with any such extension to be treated for purposes
of this Agreement as a new issuance of the Letter of Credit being extended)
and (B) the third Business Day preceding the Revolving Loan Maturity Date,
provided that (1) Letters of Credit issued to back-stop letters of credit
which were issued pursuant to the Existing Chemical Credit Agreement prior
to the Initial Borrowing Date may have a maturity not later than December
31, 1995 (and shall not be required to meet the requirements of preceding
clause (A)) and (2) up to $1,000,000 aggregate Stated Amount of Letters of
Credit may be outstanding at any time which meet the requirements of
preceding clause (B) but not the preceding clause (A), and (z) no Letter of
Credit shall be issued which is scheduled to mature after a date scheduled
for a reduction to the Letter of Credit Limit unless the aggregate Stated
Amounts of all Letters of Credit theretofore issued which extend beyond
such date, when added to the Stated Amount of the Letter of Credit then
being issued, will not cause the Company to have Revolving Letter of Credit
Outstandings which will exceed the amount of the Letter of Credit Limit
after giving effect to the scheduled reduction thereto; and
(ii) in addition to the requirements of preceding clause (i), (u)
the Stated Amount of the Initial Tender Offer Credit Support shall not
exceed 31,152,532,437 Pesetas, (v) the Stated Amount of the Treasury Stock
Letter of Credit shall not exceed 1,577,953,125 Pesetas (plus the amount of
any interest which may accrue on the purchase price of the Option Shares in
accordance with the Purchase Agreement during the Option Period as defined
therein), (w) the Stated Amount of the Tudor Convertible Bond Letter of
Credit shall not exceed 2,998,270,000 Pesetas (plus the amount of the
Interest Component as described in the Tudor Convertible Bond Letter of
Credit), (x) the aggregate Stated Amounts of all Banesto Letters of Credit
issued hereunder (excluding substitute or replacement Letters of Credit)
shall not exceed 9,264,694,445 Pesetas (adjusted, in the case of Banesto
Letters of Credit issued in currencies other than Pesetas, for exchange
rate fluctuations occurring after the Effective Date) (plus the aggregate
amounts of the Interest Components of Banesto Letters of Credit issued in
support of indebtedness other than guarantees), (y) no Additional Tudor
Letter of Credit shall be issued the Stated Amount of which, when added to
the Additional Tudor Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid on the date of, and prior to the issuance of, the
respective Additional Tudor Letter of Credit) at such time, would exceed
the Additional Tudor Letter of Credit Sub-Limit as then in effect and (z)
the Secondary Tender Offer Credit Support shall not be issued if the
initial Stated Amount thereof would be in excess of the Secondary Tender
Offer Blocked Commitment as in effect immediately prior to the issuance
thereof.
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2.02 Minimum Stated Amount. The Stated Amount of each Letter of
---------------------
Credit shall be not less than $5,000, or such lesser amount as is acceptable to
the Issuing Bank issuing such Letter of Credit.
2.03 Letter of Credit Requests. (a) Whenever the Company desires
-------------------------
that a Letter of Credit be issued for its account, the Company shall give the
Administrative Agent and the respective Issuing Bank at least five Business
Days' (or, in the case of Letters of Credit to be issued in a form attached to
this Agreement as an Exhibit, two Business Days or, in any given case, such
shorter period as is acceptable to such Issuing Bank) written notice prior to
the proposed date of issuance (which shall be a Business Day). Each notice shall
be in the form of Exhibit D (each a "Letter of Credit Request"). The
Administrative Agent shall promptly transmit copies of each Letter of Credit
Request to each Bank. Whenever the Company desires to utilize all or a portion
of the Blocked Commitment to have an appropriate Letter of Credit issued for its
account as provided in the definition of Blocked Commitment and in the
definitions of the defined terms used therein, the Letter of Credit Request
shall include a statement to such effect and the details of such proposed
utilization.
(b) The making of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Company that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(d). Unless the respective Issuing Bank has received notice from any Bank
before it issues a Letter of Credit that one or more of the applicable
conditions specified in Section 5, 6 or 7 are not then satisfied, or that the
issuance of such Letter of Credit would violate Section 2.01(d), then such
Issuing Bank shall issue on the date of issuance requested in the applicable
Letter of Credit Request the requested Letter of Credit for the account of the
Company in accordance with such Issuing Bank's usual and customary practices.
Upon its issuance of, or its entering into an amendment with respect to, any
Letter of Credit, the respective Issuing Bank shall promptly notify the
Administrative Agent of such issuance or amendment, which notice shall be
accompanied by a copy of the Letter of Credit actually issued or amendment
entered into, as the case may be, by such Issuing Bank.
2.04 Letter of Credit Participations. (a)(i) Immediately upon the
-------------------------------
issuance by any Issuing Bank of the Initial Tender Offer Credit Support, such
Issuing Bank shall be deemed to have sold and transferred to each Bank with a
Tranche A Term Loan Commitment (each such Bank, in its capacity under this
Section 2.04(a), a "Tranche A Participant") and each such Tranche A Participant
shall be deemed irrevocably and unconditionally to have purchased and received
from such Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of Tranche A Participant's TL Percentage, in such
Initial Tender Offer Credit Support, each substitute letter of credit or bank
guarantee, each drawing made thereunder and the obligations of the Company under
this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto; provided that the aggregate amount of the participations
(and liability to fund Drawings, excluding any interest owing thereon by the
respective Tranche A Participant)
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of the Tranche A Participants as provided above in this Section 2.04(a) shall be
limited from time to time to that amount which is equal to the Tranche A
Allocated Amount as then in effect. It is understood and agreed that all
drawings under, and payments required to be made in respect of, the Initial
Tender Offer Credit Support or any substitute letter of credit or bank guaranty
therefor, shall be required to be funded by the Tranche A Participants until the
aggregate amount of such payments required to be so funded by the Tranche A
Participants is equal to the Tranche A Allocated Amount at the time the
respective drawings are made and, only to the extent in excess thereof, shall
the payments be required to be participated in by the Revolving Credit
Participants as described in clause (ii) below. Upon any change in the Tranche A
Term Loan Commitments of the Banks pursuant to Section 1.13 or 14.04, it is
hereby agreed that, with respect to the outstanding Initial Tender Offer Letter
of Credit and Unpaid Drawings with respect thereto, there shall be an automatic
adjustment to the participations pursuant to this Section 2.04(a)(i) to reflect
the new TL Percentages of the assignor and assignee Banks or of all Banks with
Tranche A Term Loan Commitments, as the case may be.
(ii) Immediately upon the issuance by any Issuing Bank of the
Initial Tender Offer Credit Support, such Issuing Bank shall be deemed to have
sold and transferred to each Bank with a Revolving Loan Commitment (each such
Bank, in its capacity under this Section 2.04(a)(ii) and following Section
2.04(b), a "Revolving Credit Participant"; with each Revolving Credit
Participant and each Tranche A Participant being herein called a "Participant"),
and each such Revolving Credit Participant shall be deemed irrevocably and
unconditionally to have purchased and received from such Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent of
such Revolving Credit Participant's Adjusted RL Percentage, in such Initial
Tender Offer Credit Support, each substitute letter of credit or bank guaranty,
each drawing made thereunder and the obligations of the Company under this
Agreement with respect thereto, and any security therefor or guaranty pertaining
thereto; provided that the Revolving Credit Participants' participations in such
Initial Tender Offer Credit Support and substitute letters of credit or bank
guaranties shall only apply to the extent that the aggregate payments required
to be made with respect thereto at any time exceed the Tranche A Allocated
Amount as then in effect. It is understood and agreed that, to the extent
payments are required to be made with respect to the Initial Tender Offer Credit
Support or any substitute letter of credit or bank guarantee, such payments
shall first be required to be funded by the Tranche A Participants to the extent
of the Tranche A Allocated Amount as then in effect, and that any excess shall
be required to be funded by the Revolving Credit Participants pursuant to this
Section 2.04(a)(ii). Furthermore, it is acknowledged and agreed that the Tranche
A Allocated Amount may be reduced from time to time in accordance with the
definition thereof (as a result of the making of Tranche A Loans or the funding
of Drawings with respect to the Initial Tender Offer Credit Support) and that,
as a result thereof, the Revolving Allocated Portion of the Initial Tender Offer
Credit Support and any substitute letter of credit or bank guarantee may
increase as a result thereof. In addition to the changes described above, upon
any change in the Revolving Loan Commitments of the Banks pursuant to Section
1.13 or 14.04, it is hereby agreed that, with respect to the
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outstanding Initial Tender Offer Credit Support and Unpaid Drawings with respect
thereto, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04(a)(ii) to reflect the new Revolving Loan Percentages of the
assignor and assignee Banks or of all Banks with Revolving Loan Commitments, as
the case may be.
(b) Immediately upon the issuance by any Issuing Bank of any Letter
of Credit (other than the Initial Tender Offer Credit Support, which is covered
by preceding clause (a)), such Issuing Bank shall be deemed to have sold and
transferred to each Bank with a Revolving Loan Commitment, and each such
Revolving Credit Participant shall be deemed irrevocably and unconditionally to
have purchased and received from such Issuing Bank, without recourse or
warranty, an undivided interest and participation, to the extent of such
Revolving Credit Participant's Adjusted RL Percentage in each such Letter of
Credit, each substitute letter of credit, each drawing made thereunder and the
obligations of the Company under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments or Adjusted RL Percentages of the Banks pursuant to
Section 1.13 or 14.04, it is hereby agreed that, with respect to all outstanding
Letters of Credit (other than the Initial Tender Offer Credit Support, which is
covered by preceding clause (a)) and Unpaid Drawings relating to any such
Letters of Credit, there shall be an automatic adjustment to the participations
pursuant to this Section 2.04(b) to reflect the new Adjusted RL Percentages of
the assignor and assignee Banks or of all Banks with Revolving Loan Commitments,
as the case may be.
(c) In determining whether to pay under any Letter of Credit, no
Issuing Bank shall have any obligation relative to the other Banks other than to
confirm that the documents, if any, required to be delivered under such Letter
of Credit appear to have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by any Issuing Bank under or in connection with any Letter of Credit
if taken or omitted in the absence of gross negligence or willful misconduct,
shall not create for such Issuing Bank any resulting liability to the Company or
any Bank.
(d) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the Company shall not have reimbursed such amount in full
to the respective Issuing Bank pursuant to Section 2.05(a), the respective
Issuing Bank shall promptly notify the Administrative Agent, which shall
promptly notify (x) if the payment was made under the Initial Tender Offer
Credit Support at a time when the Tranche A Allocated Amount is greater than
zero, each Tranche A Participant of such failure, and each such Tranche A
Participant shall promptly pay to the Administrative Agent for the account of
such Issuing Bank the amount of such Participant's applicable TL Percentage of
such unreimbursed payment (or, if less, the Tranche A Allocated Amount is then
in effect) in Dollars (or, in the case of any unreimbursed payment made pursuant
to Section 2.05(a) in a currency other than Dollars, of the Dollar Equivalent of
such unreimbursed amount, as determined by the Administrative Agent on the date
on which such unreimbursed payment was made by such
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Issuing Bank) and in the same day funds or (y) in the case of a drawing under
any other Letter of Credit (or in the case of any drawing under the Initial
Tender Offer Cedit Support to the extent the amount of the respective Drawing is
in excess of the Tranche A Allocated Amount as in effect on the date of such
drawing) each Revolving Credit Participant of such failure, and each such
Participant shall promptly and unconditionally pay to the Administrative Agent
for the account of such Issuing Bank the amount of such Participant's applicable
Adjusted RL Percentage of such unreimbursed payment (or the amount thereof to
the extent in excess of the Tranche A Allocated Amount on such date, in the case
of a payment with respect to the Initial Tender Offer Credit Support) in Dollars
(or, in the case of any unreimbursed payment made pursuant to Section 2.05(a) in
a currency other than Dollars, of the Dollar Equivalent of such unreimbursed
payment, as determined by the Administrative Agent on the date on which such
unreimbursed payment was made by such Issuing Bank) and in same day funds. If
the Administrative Agent so notifies, prior to 11:00 A.M. (New York time) on any
Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to the Administrative Agent at the
Payment Office of the Administrative Agent for the account of such Issuing Bank
in Dollars such Participant's applicable TL Percentage (in the case of a Tranche
A Participant) or Adjusted RL Percentage (in the case of a Revolving Credit
Participant) of the amount of such payment on such Business Day in same day
funds. If and to the extent such Participant shall not have so made its
applicable TL Percentage (in the case of a Tranche A Participant) or Adjusted RL
Percentage (in the case of a Revolving Credit Participant) of the amount of such
payment available to the Administrative Agent for the account of such Issuing
Bank, such Participant agrees to pay to the Administrative Agent for the account
of such Issuing Bank, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to the
Administrative Agent for the account of such Issuing Bank at the overnight
Federal Funds Rate. The failure of any Participant to make available to the
Administrative Agent for the account of such Issuing Bank its applicable TL
Percentage (in the case of a Tranche A Participant) or Adjusted RL Percentage
(in the case of a Revolving Credit Participant) of any payment under any Letter
of Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Administrative Agent for the account of such Issuing Bank
its applicable TL Percentage (in the case of a Tranche A Participant) or
Adjusted RL Percentage (in the case of a Revolving Credit Participant) of any
Letter of Credit on the date required, as specified above, but no Participant
shall be responsible for the failure of any other Participant to make available
to the Administrative Agent for the account of such Issuing Bank such other
Participant's applicable TL Percentage (in the case of a Tranche A Participant)
or Adjusted RL Percentage (in the case of a Revolving Credit Participant) of any
such payment.
(e) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which the Administrative Agent has received for the account of
such Issuing Bank any payments from the Participants pursuant to clause (d)
above, such Issuing Bank shall pay to the Administrative Agent and the
Administrative Agent shall promptly pay each Participant which has paid its
applicable TL Percentage (in the case of a Tranche A
-25-
<PAGE>
Participant) or Adjusted RL Percentage (in the case of a Revolving Credit
Participant) thereof, in Dollars (or, in the case of any payment received in a
currency other than Dollars, of the Dollar Equivalent thereof) and in same day
funds, an amount equal to such Participant's share (based on the proportionate
aggregate amount funded by such Participant to the aggregate amount funded by
all Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(f) The relevant Issuing Bank shall furnish to each Tranche A
Participant copies of any Initial Tender Offer Credit Support issued by each
Issuing Bank and such other documentation as may reasonably be requested by such
Tranche A Participant. Upon the request of any Revolving Credit Participant, the
relevant Issuing Bank shall furnish to such Revolving Credit Participant copies
of any Letters of Credit issued by such Issuing Bank and such other
documentation as may be reasonably requested by such Revolving Credit
Participant.
(g) The obligations of each respective Participant to make payments
to the Administrative Agent for the account of the relevant Issuing Bank with
respect to Letters of Credit issued in which such Participant has a
participation shall be irrevocable and not subject to any qualification or
exception whatsoever and shall be made in accordance with the terms and
conditions of this Agreement under all circumstances, including, without
limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Company may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person for
whom any such transferee may be acting), the Administrative Agent, any
Issuing Bank, any Agent, any Participant, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Company and the beneficiary named in any such
Letter of Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of this Agreement or any of
the other Credit Documents; or
(v) the occurrence of any Default or Event of Default.
-26-
<PAGE>
2.05 Agreement to Repay Letter of Credit Drawings. (a) The
--------------------------------------------
Company hereby agrees to reimburse the respective Issuing Bank, by making
payment to the Administrative Agent (in the case of any payment or disbursement
made by such Issuing Bank in a currency other than Dollars, of the Dollar
Equivalent of such payment or disbursement as determined on the date of such
payment or disbursement) in immediately available funds at the Payment Office,
for any payment or disbursement made by such Issuing Bank under any Letter of
Credit (each such amount, or the Dollar Equivalent thereof as determined on the
date of payment or disbursement, so paid until reimbursed, an "Unpaid Drawing"),
no later than five Business Days after the date of such payment or disbursement,
with interest on the amounts so paid or disbursed by such Issuing Bank, to the
extent not reimbursed prior to 1:00 P.M. (New York time) on the date of such
payment or disbursement, from and including the date paid or disbursed to but
excluding the dates such Issuing Bank was reimbursed by the Borrower therefor at
a rate per annum which shall be the Base Rate in effect from time to time plus
the Applicable Margin for Revolving Loans maintained as Base Rate Loans,
provided, however, to the extent such amounts are not reimbursed prior to 1:00
- -------- -------
P.M. (New York time) on the fifth Business Day following such payment or
disbursement, interest shall thereafter accrue on the amounts so paid or
disbursed by such Issuing Bank (and until reimbursed by the Company) at a rate
per annum which shall be the Base Rate in effect from time to time plus the
Applicable Margin for Revolving Loans maintained as Base Rate Loans plus 2%, in
each such case, with interest to be payable on demand. The respective Issuing
Bank shall give the Company prompt notice of each Drawing under any Letter of
Credit; provided, that the failure to give any such notice shall in no way
--------
affect, impair or diminish the Company's obligations hereunder.
(b) The obligations of the Company under this Section 2.05 to
reimburse the respective Issuing Bank with respect to drawings on Letter of
Credit (each, a "Drawing") (including, in each case, interest thereon) shall be
absolute and unconditional under any and all circumstances and irrespective of
any setoff, counterclaim or defense to payment which the Company may have or
have had against any Bank (including in its capacity as issuer of the Letter of
Credit or as Participant), or any nonapplication or misapplication by the
beneficiary of the proceeds of such Drawing, the respective Issuing Bank's only
obligation to the Company being to confirm that any documents required to be
delivered under such Letter of Credit appear to have been delivered and that
they appear to comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Issuing Bank any
resulting liability to the Company.
2.06 Increased Costs. If at any time after the date of this
---------------
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by any Issuing Bank or
any Participant with any request or directive by any such authority (whether or
not having the full force of law), or any change in generally acceptable
accounting principles,
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<PAGE>
shall either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against letters of credit or bank guarantees, as
the case may be, issued by any Issuing Bank or participated in by any
Participant, or (ii) impose on any Issuing Bank or any Participant any other
conditions relating, directly or indirectly, to this Agreement or any Letter of
Credit; and the result of any of the foregoing is to increase the cost to any
Issuing Bank or any Participant of issuing, maintaining or participating in any
Letter of Credit, or reduce the amount of any sum received or receivable by any
Issuing Bank or any Participant hereunder or reduce the rate of return on its
capital with respect to Letters of Credit (except for changes in the rate of tax
on, or determined by reference to, the net income or profits of such Issuing
Bank or such Participant, pursuant to the laws of the jurisdiction in which its
principal office or applicable lending office is located or any subdivision
thereof or therein), but without duplication of any amounts payable in respect
of Taxes pursuant to Section 4.04(a), then, upon demand to the Company by such
Issuing Bank or any Participant (a copy of which demand shall be sent by such
Issuing Bank or such Participant to the Administrative Agent), the Company shall
pay to such Issuing Bank or such Participant such additional amount or amounts
as will compensate such Bank for such increased cost or reduction in the amount
receivable or reduction on the rate of return on its capital. Any Issuing Bank
or any Participant, upon determining that any additional amounts will be payable
pursuant to this Section 2.06, will give prompt written notice thereof to the
Company, which notice shall include a certificate submitted to the Company by
such Issuing Bank or such Participant (a copy of which certificate shall be sent
by such Issuing Bank or such Participant to the Administrative Agent), setting
forth in reasonable detail the basis for the calculation of such additional
amount or amounts necessary to compensate such Issuing Bank or such Participant.
The certificate required to be delivered pursuant to this Section 2.06 shall, if
delivered in good faith and absent manifest error, be final and conclusive and
binding on the Company.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
-----------------------------------------------------
3.01 Fees. (a) The Company agrees to pay the Administrative Agent
----
for distribution to each Non-Defaulting Bank with a Revolving Loan Commitment a
commitment commission (the "Commitment Commission") for the period from the
Initial Borrowing Date to and including the Revolving Loan Maturity Date (or
such earlier date as the Total Revolving Loan Commitment shall have been
terminated), computed at a rate for each day equal to the Applicable Commitment
Commission Percentage on the daily average Unutilized Revolving Loan Commitment
of such Non-Defaulting Bank. Accrued Commitment Commission shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the Revolving
Loan Maturity Date or such earlier date upon which the Total Revolving Loan
Commitment is terminated.
(b) The Company agrees to pay to the Administrative Agent for
distribution to (x) each Non-Defaulting Bank with a Revolving Loan Commitment
(based on their respective Adjusted RL Percentages) a fee in respect of each
Letter of Credit issued hereunder (the "Revolver Letter of Credit Fee"), for the
period from and including the date of
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<PAGE>
issuance of such Letter of Credit to and including the termination of such
Letter of Credit, computed at a rate per annum equal to the Applicable Margin
for Revolving Loans maintained as Eurodollar Loans, as in effect from time to
time, on the daily average Stated Amount of such Letter of Credit or, in the
case of the Initial Tender Offer Credit Support, the Revolving Allocated Portion
thereof and (y) each Tranche A Participant (based on their respective TL
Percentages) a fee in respect of the Initial Tender Offer Credit Support (the
"Tranche A Letter of Credit Fee"), for the period from and including date of
issuance of such Initial Tender Offer Credit Support to and including the
termination of such Initial Tender Offer Credit Support, computed at a rate per
annum equal to the Applicable Margin for Tranche A Term Loans maintained as
Eurodollar Loans, as in effect from time to time, on the daily average Tranche A
Allocated Portion of such Initial Tender Offer Credit Support. Accrued Revolver
Letter of Credit Fees shall be due and payable quarterly in arrears on each
Quarterly Payment Date and upon the first day on or after the termination of the
Total Revolving Loan Commitment upon which no Letters of Credit remain
outstanding. Accrued Tranche A Letter of Credit Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the Initial Tender
Offer Date and on the first day after the Initial Tender Offer Date upon which
the Initial Tender Offer Credit Support has terminated in accordance with its
terms.
(c) The Company agrees to pay to the respective Issuing Bank, for its
own account, a facing fee in respect of each Letter of Credit issued for its
account hereunder (the "Facing Fee") for the period from and including the date
of issuance of such Letter of Credit to and including the termination of such
Letter of Credit, computed at a rate equal to 1/8 of 1% per annum of the daily
average Stated Amount of such Letter of Credit. Accrued Facing Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date, and on any date
upon which Revolver Letter of Credit Fees or Tranche A Letter of Credit Fees are
required to be paid pursuant to preceding Section 3.01(b).
(d) The Company shall pay, upon each drawing under, issuance of, or
amendment to, any Letter of Credit, such amount as shall at the time of such
event be the administrative charge which the respective Issuing Bank is
generally imposing in connection with such occurrence with respect to letters of
credit.
(e) The Company shall pay to the Agents and the Administrative Agent,
for their respective accounts, such other fees as have been agreed to in writing
by the Company, the Agents and the Administrative Agent.
(f) The Company agrees to pay the Administrative Agent for
distribution to each Bank with a Tranche C Term Loan Commitment a commitment
commission (the "Tranche C Commitment Commission") for the period from the
Fourth Amendment Effective Date to and including the first date upon which the
Total Tranche C Term Loan Commitment is terminated, computed at a rate for each
day equal to 1/2 of 1% on the daily average Tranche C Term Loan Commitment of
such Bank. Accrued Tranche C Commitment Commission shall be due and payable
quarterly in arrears on each Quarterly
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<PAGE>
Payment Date and on such date upon which the Total Tranche C Term Loan
Commitment is terminated.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at
-----------------------------------------------
least two Business Days' prior notice to the Administrative Agent at its Notice
Office (which notice the Administrative Agent shall promptly transmit to each of
the Banks), the Company shall have the right, at any time or from time to time,
without premium or penalty, to terminate (1) if the Initial Borrowing Date has
not yet occurred, the Total Commitments (and the Commitments of each Bank), in
whole, or (2) after the Initial Tender Offer Date, the Total Unutilized
Revolving Loan Commitment, in whole or in part, in each case in integral
multiples of $5,000,000 in the case of partial reductions; provided, that, with
--------
respect to reductions pursuant to this clause (2), (i) in no event may the Total
Unutilized Revolving Loan Commitment be reduced to an amount below the Blocked
Commitment, if any, at such time; provided, however, that after the Initial
-------- -------
Tender Offer Date and prior to the Secondary Tender Offer Filing Date, the Total
Unutilized Revolving Loan Commitment may otherwise be reduced to the extent that
any such reduction also reduces (and so long as the Company specifies in writing
at the time of such prepayment that it shall reduce) the Secondary Tender Offer
Blocked Commitment by a corresponding amount (which reduction shall diminish the
amount of consideration which may be offered pursuant to the Secondary Tender
Offer), (ii) each such reduction shall apply proportionately to permanently
reduce the Revolving Loan Commitment of each Bank with such a Commit ment, (iii)
the reduction to the Total Unutilized Revolving Loan Commitment shall in no case
be in an amount which would cause the Revolving Loan Commitment of any Bank to
be reduced (as required by preceding clause (ii)) by an amount which exceeds the
remainder of (x) the Unutilized Revolving Loan Commitment of such Bank as in
effect immediately before giving effect to such reduction minus (y) such Bank's
Adjusted RL Percentage of the aggregate principal amount of Swingline Loans then
outstanding, and (iv) any partial reduction to the Total Revolving Loan
Commitment shall apply to reduce the remaining Scheduled Commitment Reductions
in direct order of maturity (based upon the amount of each such remaining
Scheduled Commitment Reduction).
(b) In the event of certain refusals by a Bank as provided in Section
14.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Company may, subject to its compliance with the requirements
of Section 14.12(b), upon five Business Days' written notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Banks) terminate all of the Revolving
Loan Commitment and/or the Tranche A Term Loan Commitment of such Bank, so long
as all Loans, together with accrued and unpaid interest, Fees and all other
amounts, owing to such Bank (other than amounts owing in respect of any Tranche
of Loans maintained by such Bank which are not being repaid pursuant to Section
14.12(b)) are repaid concurrently with the effectiveness of such termination (at
which time Schedule I shall be deemed modified to reflect such changed amounts),
and at such time, unless the respective Bank continues to have outstanding Loans
of one or more Tranches hereunder,
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<PAGE>
such Bank shall no longer constitute a "Bank" for purposes of this Agreement,
except with respect to indemnifications under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.06, 4.04, 14.01 and 14.06), which shall
survive as to such repaid Bank.
(c) Upon at least two Business Days' prior notice to the
Administrative Agent at its Notice Office (which notice the Administrative Agent
shall promptly transmit to each of the Banks), the Company shall have the right,
at any time or from time to time, without premium or penalty, to terminate the
Total Tranche C Term Loan Commitment (and the Tranche C Term Loan Commitment of
each Bank) in whole or in part, in each case in integral multiples of $5,000,000
in the case of partial reductions; provided that (i) each such reduction shall
apply proportionately to permanently reduce the Tranche C Term Loan Commitment
of each Bank with such a Commitment and (ii) any partial reduction to the Total
Tranche C Term Loan Commitment shall apply to reduce the then remaining Tranche
C Scheduled Repayments in inverse order of maturity.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment
----------------------------------
(and the Tranche A Term Loan Commitment, the Tranche B Term Loan Commitment and
the Revolving Loan Commitment of each Bank) shall terminate in its entirety on
October 15, 1994 unless the Initial Borrowing Date shall have occurred.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Tranche A Term Loan Commitment shall (i) be
reduced on each date on which Tranche A Term Loans are incurred (after giving
effect to the making of Tranche A Term Loans on such date), in an amount equal
to the aggregate principal amount of Tranche A Term Loans incurred on such date;
(ii) terminate in its entirety on the tenth day after the Initial Tender Offer
Date (after giving effect to the making of any Tranche A Term Loans on or prior
to such date); and (iii) prior to the termination of the Total Tranche A Term
Loan Commitment as provided in clause (ii) above, be reduced from time to time
to the extent required by Section 4.02.
(c) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Tranche B Term Loan Commitment (and the Tranche
B Term Loan Commitment of each Bank) shall (i) terminate in its entirety on the
Initial Borrowing Date (after giving effect to the making of the Tranche B Term
Loans on such date) and (ii) prior to the termination of the Total Tranche B
Term Loan Commitment as provided in clause (i) above, be reduced from time to
time to the extent required by Section 4.02.
(d)(i) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment shall be
permanently reduced on December 31, 1995 by an amount equal to $44,801,221.34;
provided, that in the event the Approved Incremental Financing is incurred on or
- --------
prior to December 31, 1995, the reduction to the Total Revolving Loan Commitment
pursuant to this clause (i) shall be an amount equal to $31,801,221.30.
-31-
<PAGE>
(ii) In addition to any other mandatory commitment reduction pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall be permanently
reduced on each date set forth below (each a "Scheduled Commitment Reduction
Date"), by an amount equal to the amount set forth below opposite such date
(each such reduction, as such reduction may be reduced after the Exide European
Restructuring Date pursuant to Section 3.02, a "Scheduled Commitment
Reduction"):
<TABLE>
<CAPTION>
Scheduled Commitment
Reduction Date Amount
------------------- -----------
<S> <C>
September 30, 1996 $15,000,000
September 30, 1997 $15,000,000
September 30, 1998 $15,000,000
</TABLE>
Notwithstanding anything to the contrary contained above in this Section 3.03(d)
or in Section 3.02, reductions to the Total Revolving Loan Commitment on or
prior to the Exide European Restructuring Date shall not reduce, modify or
otherwise affect the amount of Scheduled Commitment Reduction otherwise provided
in this Section 3.03(d).
(e) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall be permanently
reduced on the dates, and in the amounts, required by Section 4.02(i) and,
without duplication, on each other date on which (x) the Stated Amount of the
Tudor Convertible Bond Letter of Credit is permanently reduced, other than as a
result of a Drawing thereunder, applications made as required by Section 4.02(i)
or currency fluctuations, or (y) the aggregate Stated Amounts of the Banesto
Letters of Credit is permanently reduced other than as a result of a Drawing
thereunder, applications made as required by Section 4.02(i) or currency
fluctuations, by an amount equal to the amount of the respective such reduction
(taking the Dollar Equivalent thereof on the date of the respective reduction).
All reductions of the Total Revolving Loan Commitment pursuant to this Section
3.03(e) or pursuant to Section 4.02(i) shall be applied to reduce the then
remaining Scheduled Commitment Reductions in direct order of maturity (based
upon the amount of each such remaining Scheduled Commitment Reduction).
Notwithstanding anything to the contrary contained above, no commitment
reduction shall be made pursuant to this Section 3.03(e) for events of the type
otherwise described in this Section 3.03(e) to the extent same occur after the
Fifth Amendment Effective Date.
(f) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall be permanently
reduced on the date which is the sixth month anniversary of the Initial Tender
Offer Filing Date by an amount equal to the Secondary Tender Offer Blocked
Commitment as then in effect in the event that the Secondary Tender Offer has
not been commenced pursuant to the Secondary Offer to Purchase prior to such
date.
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<PAGE>
(g) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall be permanently
reduced (x) on the Secondary Tender Offer Filing Date by the amount, if any, by
which (i) the Secondary Tender Offer Blocked Commitment as in effect immediately
before the Secondary Tender Offer Filing Date exceeds (ii) the Secondary Tender
Offer Maximum Offered Consideration and (y) on the Secondary Tender Offer Date
by the amount, if any, by which (i) the Secondary Tender Offer Maximum Offered
Consideration exceeds (ii) the amount of the Secondary Tender Offer Payment
which is, or will be required to be, paid based upon the actual number of
Remaining Tudor Shares and Remaining Tudor Convertible Bonds actually tendered
pursuant to the Secondary Tender Offer.
(h) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on the Initial Tender Offer Date the Total Revolving Loan
Commitment shall be permanently reduced by the Dollar Equivalent (as determined
on such date) of the sum of (x) the amount by which 2,998,270,000 Pesetas
exceeds the Stated Amount of the Tudor Convertible Bond Letter of Credit
actually required to be issued on or prior to such date and (y) the amount by
which 9,264,694,445 Pesetas exceeds the aggregate Stated Amounts (excluding the
Interest Components of any Banesto Letters of Credit) of all Banesto Letters of
Credit actually required to be issued on or prior to such date (converting any
amounts issued in currencies other than Pesetas into Pesetas at then prevailing
exchange rates as determined by the Administrative Agent). Any reduction to the
Total Revolving Loan Commitment pursuant to this clause (h) shall be applied to
reduce the then remaining Scheduled Commitment Reductions in the same manner as
provided in the last sentence of Section 3.03(e).
(i) In addition to any other mandatory commitment reduction pursuant
to this Section 3.03, the Total Revolving Loan Commitment shall be permanently
reduced on such date, if any, occurring after the Initial Tender Offer Filing
Date upon which the Initial Tender Offer shall have been withdrawn, cancelled or
declared void, in each case within the meaning provided in the Initial Tender
Offer Credit Support (the "Initial Tender Offer Termination Date") by an amount
equal to $134,000,000. Any reduction to the Total Revolving Loan Commitment
pursuant to this clause (i) shall be applied to reduce the then remaining
scheduled Commitment Reductions in the same manner as provided in the last
sentence of Section 3.03(e).
(j) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Tranche A Term Loan Commitment and Total Tranche
B Term Loan Commitment shall terminate in its entirety on such date, if any, as
a reduction is made to the Total Revolving Loan Commitment as specified in
preceding Section 3.03(i).
(k) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on each date upon which the Receivables Facility
Commitment is increased to an amount in excess of $40,000,000 (or in excess of
the highest amount in excess of $40,000,000 to which the Receivables Maximum
Commitment Amount has
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<PAGE>
theretofore been raised after the Effective Date and before such increase) then
there shall be a reduction to the Total Revolving Loan Commitment in the amount
of such increase.
(l) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the (i) Total Revolving Loan Commitment (and the Revolving
Loan Commitment of each Bank) shall terminate in its entirety on the Revolving
Loan Maturity Date and (ii) the Total Tranche A Term Loan Commitment (and the
Tranche A Term Loan Commitment of each Bank) shall terminate in its entirety on
the Tranche A Term Loan Maturity Date.
(m) [INTENTIONALLY OMITTED].
(n) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Tranche C Term Loan Commitment (and the Tranche
C Term Loan Commitment of each Bank) shall terminate in its entirety on the
Tranche C Term Loan Borrowing Date (after giving effect to the making of the
Tranche C Term Loans on such date).
(o) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on the CEAc Acquisition Date the Tranche C Term Loan
Commitment shall be permanently reduced by the amount (as determined on such
date), if any, by which $421,850,000 exceeds the CEAc Acquisition Amount as
calculated on the CEAc Acquisition Date and contained in the officer's
certificate delivered to the Banks pursuant to Section 6A.23.
(p) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, on the CEAc Acquisition Date the Tranche C Term Loan
Commitment shall be permanently reduced by the Dollar Equivalent of the amount
(as determined on such date), if positive, by which the CEAc Refinancing Amount
as specified in the officer's certificate delivered to the Banks pursuant to
Section 6A.23 exceeds 830,000,000 French Francs.
(q) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Tranche C Term Loan Commitment shall terminate
in its entirety on the Tranche C Expiration Date unless the Tranche C Term Loan
Borrowing Date has occurred.
(r) Each reduction to the Total Tranche A Term Loan Commitment, the
Total Tranche B Term Loan Commitment, the Total Tranche C Term Loan Commitment
or the Total Revolving Loan Commitment pursuant to this Section 3.03 (or
pursuant to Section 4.02) shall be applied proportionately to reduce the Tranche
A Term Loan Commitment, the Tranche B Term Loan Commitment, the Tranche C Term
Loan Commitment or the Revolving Loan Commitment, as the case may be, of each
Bank with such a Commitment. Any reductions to the Total Tranche C Term Loan
Commitment pursuant
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<PAGE>
to either of Sections 4.02(o) and/or (p) shall apply to reduce the Tranche C
Schedule Repayments in inverse order of maturity.
SECTION 4. Prepayments; Payments; Taxes.
----------------------------
4.01 Voluntary Prepayments. (a) The Company shall have the right to
---------------------
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions:
(i) the Company shall give the Administrative Agent prior to 1:00
P.M. (New York time) at its Notice Office (x) at least one Business Day's
prior written notice (or telephonic notice promptly confirmed in writing)
of its intent to prepay Base Rate Loans (or same day notice in the case of
Swingline Loans, provided such notice is given prior to 1:00 P.M. (New York
--------
time)) and (y) at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of its intent to prepay
Eurodollar Loans, whether Term Loans, Revolving Loans or Swingline Loans
shall be prepaid, the amount of such prepayment and the Types of Loans to
be prepaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, which notice the Administrative Agent
shall promptly transmit to each of the Banks;
(ii) each prepayment shall be in an aggregate principal amount of
at least $1,000,000 (or $500,000 in the case of Swingline Loans); provided,
--------
that if any partial prepayment of Eurodollar Loans made pursuant to any
Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than $10,000,000, then such Borrowing may
not be continued as a Borrowing of Eurodollar Loans and any election of an
Interest Period with respect thereto given by the Company shall have no
force or effect;
(iii) each prepayment in respect of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans;
--- ----
(iv) in the event of certain refusals by a Bank as provided in
Section 14.12(b) to consent to certain proposed changes, waivers,
discharges or terminations with respect to this Agreement which have been
approved by the Required Banks, the Company may, upon 5 Business Days'
written notice to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the
Banks) repay all Loans, together with accrued and unpaid interest, Fees,
and other amounts owing to such Bank (or owing to such Bank with respect to
each Tranche which gave rise to the need to obtain such Bank's individual
consent) in accordance with, and subject to the requirements of said
Section 14.12(b) so long as (A) in the case of the repayment of Revolving
Loans of any Bank pursuant to this clause (iv) the Revolving Loan
Commitment of such Bank is terminated concurrently with such repayment (at
which time Schedule
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<PAGE>
I shall be deemed modified to reflect the changed Revolving Loan
Commitments), and (B) the consents required by Section 14.12(b) in
connection with the repayment pursuant to this clause (iv) have been
obtained;
(v) voluntary prepayments of Term Loans effected pursuant to this
Section 4.01 (except pursuant to the preceding clause (iv)) shall be
applied to the Tranche A Term Loans, Tranche B Term Loans and Tranche C
Term Loans on a pro rata basis (based upon the then outstanding principal
--- ----
amount of Tranche A Term Loans, Tranche B Term Loans and Tranche C Term
Loans); and
(vi) at the Company's election in connection with any prepayment of
Revolving Loans pursuant to this Section 4.01, such prepayment shall not be
applied to any Revolving Loan of a Defaulting Bank.
(b) Each prepayment of principal of Tranche A Term Loans, Tranche B
Term Loans and Tranche C Term Loans pursuant to this Section 4.01 shall be
applied to reduce the then remaining Scheduled Repayments of the respective
Tranche of Term Loans pro rata based upon the then remaining amount of Scheduled
--- ----
Repayments of the respective Tranche after giving effect to all prior reductions
thereto; provided, that repayments of any Tranche of Term Loans pursuant to
--------
clause (iv) of Section 4.01(a) shall only apply to reduce the then remaining
Scheduled Repayments of such Tranche to the extent such Term Loans so repaid are
not replaced pursuant to Section 14.12(b), with any such reductions to reduce
the then remaining Scheduled Repayments of the respective Tranche in inverse
order of maturity unless otherwise specifically agreed by the Required Banks.
4.02 Mandatory Repayments; Cash Collateralizations and Commitment
------------------------------------------------------------
Reductions. (a)(i) On any day on which the sum of the aggregate outstanding
- ----------
principal amount of the Revolving Loans made by Non-Defaulting Banks, Swingline
Loans and Revolving Letter of Credit Outstandings exceeds the Adjusted Total
Available Revolving Loan Commitment as then in effect, the Company shall prepay
principal of Swingline Loans and, after the Swingline Loans have been repaid in
full, Revolving Loans of Non-Defaulting Banks in an amount equal to such excess.
If, after giving effect to the prepayment of all outstanding Revolving Loans of
Non-Defaulting Banks, the aggregate amount of the Revolving Letter of Credit
Outstandings exceeds the Adjusted Total Available Revolving Loan Commitment as
then in effect, the Company shall pay to the Administrative Agent at the Payment
Office on such date an amount of cash or Cash Equivalents equal to the amount of
such excess (up to a maximum amount equal to the Revolving Letter of Credit
Outstandings at such time), such cash or Cash Equivalents to be held as security
for all obligations of the Company to the Revolving Credit Participants in a
cash collateral account to be established by the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal amount
of the Revolving Loans made by any Defaulting Bank exceeds the Available
Revolving Loan
-36-
<PAGE>
Commitment of such Defaulting Bank, the Company shall prepay principal of
Revolving Loans of such Defaulting Bank in an amount equal to such excess.
(iii) On any date upon which (x) the Letter of Credit Outstandings at
such time are in excess of the Letter of Credit Limit as then in effect, the
Company shall pay to the Administrative Agent at the Payment Office on such date
an amount of cash or Cash Equivalents as is necessary (taking into account all
other cash collateral then maintained with respect to the Revolving Letter of
Credit Outstandings) to secure an amount equal to the amount of such excess,
such cash or Cash Equivalents to be held as security for all obligations of the
Company to the Revolving Credit Participants in a cash collateral account to be
established by the Administrative Agent and (y) the Letter of Credit
Outstandings at such time are in excess of the Additional Tudor Letter of Credit
Sub-Limit as then in effect, the Company shall pay to the Administrative Agent
at the Payment Office on such date an amount of cash or Cash Equivalents as is
necessary (taking into account all other cash collateral then maintained with
respect to the Revolving Letter of Credit Outstandings) to secure an amount
equal to the amount of such excess, such cash or Cash Equivalents to be held as
security for all obligations of the Company to the Revolving Credit Participants
in a cash collateral account to be established by the Administrative Agent.
(iv) If on any date the Tranche A Letter of Credit Outstandings are
in excess of the Total Tranche A Term Loan Commitment as then in effect, then
the Company shall pay to the Administrative Agent at the Payment Office on such
date an amount of cash or Cash Equivalents equal to the amount of such excess
(up to a maximum amount equal to the Tranche A Letter of Credit Outstandings at
such time), such cash or Cash Equivalents to be held as security for all
obligations of the Company to the Tranche A Participants in a cash collateral
account to be established by the Administrative Agent. Upon the occurrence of
any Drawing under the Initial Tender Offer Credit Support, any cash collateral
held as contemplated by this clause (iv) shall be applied to reimburse, to the
extent of the cash collateral so applied, the Issuer for such Drawing.
(v) If any Borrowing Base Certificate shall disclose the existence
of a Borrowing Base Deficiency, the Company shall on the date of the delivery
thereof in accordance with Section 9.01(n), repay the principal of Swingline
Loans and, after the Swingline Loans have been repaid in full, the principal of
Revolving Loans in an amount equal to such Borrowing Base Deficiency and, to the
extent such Borrowing Base Deficiency exceeds the principal amount of then
outstanding Swingline Loans and Revolving Loans required to be prepaid, the
Company shall pay to the Agent at the Payment Office an amount of cash or Cash
Equivalents equal to such excess, such cash or Cash Equivalents to be held as
security for all Obligations of the Company hereunder with respect to the Letter
of Credit Outstandings in a cash collateral account established and maintained
(including the investments made pursuant thereto) by the Agent pursuant to a
cash collateral agreement in form and substance satisfactory to the Agent.
-37-
<PAGE>
(vi) If on February 28 of each year commencing February 28, 1997, a
Clean-Down Period shall not have occurred since the preceding December 31, the
Company shall repay Revolving Loans and/or Swingline Loans in an amount
necessary to reduce the aggregate outstanding principal amount of Revolving
Loans and Swingline Loans taken as a whole to $20,000,000 which amount may not
be exceeded until the Clean-Down Period has ended.
(b) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Company shall be required to repay that principal amount of Tranche A Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(j), a "Tranche A Scheduled Repayment," and each such date, a "Tranche A
Scheduled Repayment Date"):
<TABLE>
<CAPTION>
Tranche A
Scheduled Repayment Date Amount
------------------------ ------
<S> <C>
March 31, 1995 $5,000,000.00
June 30, 1995 2,500,000.00
September 30, 1995 2,500,000.00
December 31, 1995 3,750,000.00
March 31, 1996 3,750,000.00
June 30, 1996 3,750,000.00
September 30, 1996 3,750,000.00
December 31, 1996 5,000,000.00
March 31, 1997 5,000,000.00
June 30, 1997 5,000,000.00
September 30, 1997 5,000,000.00
December 31, 1997 6,250,000.00
March 31, 1998 6,250,000.00
June 30, 1998 6,250,000.00
September 30, 1998 6,250,000.00
December 31, 1998 7,500,000.00
March 31, 1999 7,500,000.00
June 30, 1999 7,500,000.00
Tranche A Term Loan
Maturity Date 7,500,000.00
</TABLE>
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Company shall
-38-
<PAGE>
be required to repay that principal amount of Tranche B Term Loans, to the
extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(j),
a "Tranche B Scheduled Repayment," and each such date, a "Tranche B Scheduled
Repayment Date"):
<TABLE>
<CAPTION>
Tranche B
Scheduled Repayment Date Amount
------------------------ ------
<S> <C>
March 31, 1995 $500,000.00
June 30, 1995 250,000.00
September 30, 1995 250,000.00
December 31, 1995 250,000.00
March 31, 1996 250,000.00
June 30, 1996 250,000.00
September 30, 1996 250,000.00
December 31, 1996 250,000.00
March 31, 1997 250,000.00
June 30, 1997 250,000.00
September 30, 1997 250,000.00
December 31, 1997 250,000.00
March 31, 1998 250,000.00
June 30, 1998 250,000.00
September 30, 1998 250,000.00
December 31, 1998 250,000.00
March 31, 1999 250,000.00
June 30, 1999 250,000.00
September 30, 1999 250,000.00
December 31, 1999 11,250,000.00
March 31, 2000 11,250,000.00
June 30, 2000 11,250,000.00
September 30, 2000 11,250,000.00
December 31, 2000 12,500,000.00
March 31, 2001 12,500,000.00
June 30, 2001 12,500,000.00
Tranche B Term Loan
Maturity Date 12,500,000.00
</TABLE>
-39-
<PAGE>
(d)(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which the Company or any of its Subsidiaries (other than CEAc Acquisition
Corp. and its Subsidiaries) receives any proceeds from any sale or issuance of
its equity (including, without limitation, the issuance of capital stock, or
options or warrants to purchase such capital stock) or from the exercise of
options or warrants to purchase such equity (other than proceeds received by any
Subsidiary representing an investment therein permitted to be made in accordance
with this Agreement by the Company or any Subsidiary of the Company), an amount
equal to 66-2/3% of the Net Cash Proceeds of the respective sale, issuance or
exercise shall be applied as a mandatory repayment and/or commitment reduction
in accordance with the requirements of Sections 4.02(j) and (k)./2/
(ii) [INTENTIONALLY OMITTED].
(iii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date occurring on or prior to
the date upon which the Term Loans, together with interest thereon, are repaid
in full upon which CEAc Acquisition Corp. or any of its Subsidiaries receives
any proceeds from any sale or issuance of its equity (including, without
limitation, the issuance of capital stock, or options or warrants to purchase
such capital stock but excluding issuances permitted by Section 10.14) or from
the exercise of options or warrants to purchase such equity (other than proceeds
received by CEAc Acquisition Corp. or any such Subsidiary representing an
investment therein permitted to be made in accordance with this Agreement by the
Company or any Subsidiary of the Company) an amount equal to 66-2/3% of the Net
Cash Proceeds of the respective sale or issuance shall be applied as a mandatory
repayment and/or commitment reduction in accordance with the requirements of
Section 4.02(m).
(e)(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Fourth
Amendment Effective Date upon which the Company or any of its Subsidiaries
(other than CEAc Acquisition Corp. and its Subsidiaries) receives any proceeds
from any incurrence by the Company or any of its Subsidiaries (other than Tudor,
CEAc and their respective Subsidiaries) of Indebt edness for borrowed money
(other than Indebtedness for borrowed money permitted to be incurred pursuant to
Section 10.05 as such Section is in effect on the Exide European Restructuring
Date), an amount equal to 100% of the Net Cash Proceeds of the respective
_________________________
/2/ The Net Cash Proceeds of the Subject Shares Issuance were not required to
be applied as required by Section 4.02(d)(i) pursuant to the Second Consent,
Waiver and Agreement and the Fourth Amendment.
-40-
<PAGE>
incurrence of Indebtedness shall be applied as a mandatory repayment and/or
commitment reduction in accordance with the requirements of Sections 4.02(j) and
(k)./3/
(ii) [INTENTIONALLY OMITTED].
(iii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date occurring on or prior to
the date upon which the Term Loans, together with interest thereon, are repaid
in full upon which CEAc Acquisition Corp. or any of its Subsidiaries receives
any proceeds from any incurrence by CEAc Acquisition Corp. or any of its
Subsidiaries of Indebtedness for borrowed money (other than Indebtedness for
borrowed money permitted to be incurred pursuant to Section 10.05 as such
Section is in effect on the Exide European Restructuring Date), an amount equal
to 100% of the Net Cash Proceeds of the respective incurrence of Indebtedness
shall be applied as a mandatory repayment and/or commitment reduction in
accordance with the requirements of Section 4.02(m).
(f)(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date after the Effective Date
upon which the Company or any of its Subsidiaries (other than CEAc Acquisition
Corp. and its Subsidiaries) receives proceeds from any sale of assets (other
than capital stock and securities held thereby, but excluding (i) sales or
transfers of inventory in the ordinary course of business and (ii) sales of
assets to the extent permitted by Section 10.02(ii) and (vi) (as in effect on
the Exide European Restructuring Date)), an amount equal to 100% of the Net Sale
Proceeds therefrom shall be applied as a mandatory repayment and/or commitment
reduction in accordance with the requirements of Sections 4.02(j) and (k).
(ii) [INTENTIONALLY OMITTED].
(iii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date occurring on or prior to
the date upon which the Term Loans, together with interest thereon, are repaid
in full upon which CEAc Acquisition Corp. or any of its Subsidiaries receives
proceeds from any sale of assets (including capital stock and securities held
thereby, but excluding (i) sales or transfers of inventory and equipment in the
ordinary course of business; (ii) sales of assets to the extent permitted by
Section 10.02(ii) and (xv) and Section 10.06(xx) (as in effect on the Exide
European Restructuring Date) and (iii) sales of assets to the extent the
proceeds thereof are expressly excepted from the mandatory repayment
requirements of the Exide European Refinancing Facility Agreement by reason of
the exceptions contained in Section 7.3.1 of the Exide European Refinancing
Facility Agreement as originally in effect), an amount
_________________________
/3/ The Net Cash Proceeds of the 2005 Senior Unsecured Notes Issuance were not
required to be applied as required by Section 4.02(e)(i) pursuant to the Fifth
Amendment, the Sixth Amendment and the Seventh Amendment.
-41-
<PAGE>
equal to 100% of the Net Sale Proceeds therefrom shall be applied as a mandatory
repayment and/or commitment reduction in accordance with the requirements of
Section 4.02(m).
(g)(i) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to the
applicable Excess Cash Flow Percentage of the Company Excess Cash Flow for the
relevant Excess Cash Payment Period shall be applied as a mandatory repayment
and/or commitment reduction in accordance with the requirements of Sections
4.02(j) and (k).
(ii) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to the
applicable Excess Cash Flow Percentage of the Tudor Excess Cash Flow for the
relevant Excess Cash Payment Period shall be applied in accordance with the
requirements of Section 4.02(i).
(iii) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date occurring after the CEAc
Acquisition Date, an amount equal to the applicable Excess Cash Flow Percentage
of the CEAc Excess Cash Flow for the relevant Excess Cash Payment Period shall
be applied as a mandatory repayment and/or commitment reduction in accordance
with the requirements of Section 4.02(m).
(h)(i) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 10 days following each date
after the Effective Date on which the Company or any of its Subsidiaries (other
than CEAc Acquisition Corp. and its Subsidiaries) receives any proceeds from any
Recovery Event, an amount equal to 100% of the proceeds of such Recovery Event
(net of reasonable costs and taxes incurred in connec tion with such Recovery
Event) shall be applied as a mandatory repayment and/or commitment reduction in
accordance with the requirements of Sections 4.02(j) and (k), provided that (x)
--------
so long as no Default or Event of Default then exists and such proceeds do not
exceed $10,000,000, such proceeds shall not be required to be so applied on such
date to the extent that the Company has delivered a certificate to the
Administrative Agent on or prior to such date stating that such proceeds shall
be used to replace or restore any properties or assets in respect of which such
proceeds were paid within 12 months following the date of such Recovery Event
(which certificate shall set forth the estimates of the proceeds to be so
expended) and (y) so long as no Default or Event of Default then exists and if
(a) the amount of such proceeds exceeds $10,000,000 but does not exceed
$50,000,000, (b) the amount of such proceeds is at least equal to 90% of the
cost of replacement or restoration of the properties or assets in respect of
which such proceeds were paid as determined by the Company and as supported by
such estimates or bids from contractors or subcontractors or such other
supporting information as the Administrative Agent may reasonably request, (c)
the Company has delivered to the Administrative Agent a certificate on or prior
to the date the application would otherwise be required pursuant to this Section
4.02(h)(i) in the form described in clause (x) above
-42-
<PAGE>
(although the time period for the replacement or restoration of the properties
or assets may be extended from 12 months to 24 months following the date of such
Recovery Event) and also certifying its determination as required by preceding
clause (b) and certifying the sufficiency of business interruption insurance as
required by succeeding clause (d), and (d) the Company has delivered to the
Administrative Agent such evidence as the Administrative Agent may reasonably
request in form and substance satisfactory to the Administrative Agent
establishing that the Company has sufficient business interruption insurance and
that the Company will be receiving regular payments thereunder in such amounts
and at such times as are necessary to satisfy all obligations and expenses of
the Company (including without limitation all debt service requirements,
including pursuant to this Agreement) without any delay or extension thereof,
for the period from the date of the respective casualty, condemnation or other
event giving rise to the Recovery Event and continuing through the completion of
the replacement or restoration of the respective properties or assets, then the
entire amount and not just the portion in excess of $10,000,000 shall be
deposited with the Administrative Agent pursuant to a cash collateral
arrangement satisfactory to the Administrative Agent whereby such proceeds shall
be disbursed to the Company from time to time as needed to pay actual costs
incurred by it in connection with the replacement or restoration of the
respective properties or assets (pursuant to such certification requirements as
may reasonably be established by the Administrative Agent), provided further
----------------
that at any time while an Event of Default has occurred and is continuing, the
Required Banks may direct the Administrative Agent (in which case the
Administrative Agent shall, and is hereby authorized by the Company to, follow
said directions) to apply any or all proceeds then on deposit in such collateral
account to the repayment of Obligations hereunder in the same manner as proceeds
would be applied pursuant to the Security Agreement, and provided further, that
----------------
if all or any portion of such proceeds not required to be applied to mandatory
repayments and commitment reductions pursuant to the second preceding proviso
(whether pursuant to clause (x) or (y) thereof) are not so used within 12 months
(in the case of clause (x) to the second preceding proviso) or 24 months (in the
case of clause (y) to the second preceding proviso) after the date of the
respective Recovery Event, such remaining portion shall be applied on the date
which is 12 or 24 months, as the case may be, after the date of the respective
Recovery Event as a mandatory repayment of principal of outstanding Term Loans
in accordance with the requirements of Sections 4.02(j) and (k).
(ii) [INTENTIONALLY OMITTED].
(iii) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 10 days following each date
occurring on or prior to the date upon which the Term Loans, together with
interest thereon, are repaid in full on which CEAc Acquisition Corp. or any of
its Subsidiaries receives any proceeds from any Recovery Event, an amount equal
to 100% of the proceeds of such Recovery Event (net of reasonable costs and
taxes incurred in connection with such Recovery Event) shall be applied as a
mandatory repayment and/or commitment reduction in accordance with the
requirements of Section 4.02(m), provided that (x) so long as no Default or
--------
Event of
-43-
<PAGE>
Default then exists and such proceeds do not exceed $10,000,000, such proceeds
shall not be required to be so applied on such date to the extent that the
Company has delivered a certificate to the Administrative Agent on or prior to
such date stating that such proceeds shall be used to replace or restore any
properties or assets in respect of which such proceeds were paid within 12
months following the date of such Recovery Event (which certificate shall set
forth the estimates of the proceeds to be so expended) and (y) so long as no
Default or Event of Default then exists and if (a) the amount of such proceeds
exceeds $10,000,000 but does not exceed $50,000,000, (b) the amount of such
proceeds is at least equal to 90% of the cost of replacement or restoration of
the properties or assets in respect of which such proceeds were paid as
determined by the Company and as supported by such estimates or bids from
contractors or subcontractors or such other supporting information as the
Administrative Agent may reasonably request, (c) the Company has delivered to
the Administrative Agent a certificate on or prior to the date the application
would otherwise be required pursuant to this Section 4.02(h)(iii) in the form
described in clause (x) above (although the time period for the replacement or
restoration of the properties or assets may be extended from 12 months to 24
months following the date of such Recovery Event) and also certifying its
determination as required by preceding clause (b) and certifying the sufficiency
of business interruption insurance as required by succeeding clause (d), and (d)
the Company has delivered to the Administrative Agent such evidence as the
Administrative Agent may reasonably request in form and substance satisfactory
to the Administrative Agent establishing that the Company and/or CEAc
Acquisition Corp. have sufficient business interruption insurance and that the
Company and/or CEAc Acquisition Corp. will be receiving regular payments
thereunder in such amounts and at such times as are necessary to satisfy all
obligations and expenses of the Company and its Subsidiaries (including without
limitation all debt service requirements, including pursuant to this Agreement)
without any delay or extension thereof, for the period from the date of the
respective casualty, condemnation or other event giving rise to the Recovery
Event and continuing through the completion of the replacement or restoration of
the respective properties or assets, then the entire amount and not just the
portion in excess of $10,000,000 shall be deposited with a bank acceptable to
the Administrative Agent pursuant to a cash collateral arrangement satisfactory
to the Administrative Agent whereby such proceeds shall be disbursed to CEAc
Acquisition Corp. from time to time as needed to pay actual costs incurred by it
in connection with the replacement or restoration of the respective properties
or assets (pursuant to such certification requirements as may reasonably be
established by the Administrative Agent), and provided further, that if all or
----------------
any portion of such proceeds not required to be applied to mandatory repayments
and commitment reductions pursuant to the preceding proviso (whether pursuant to
clause (x) or (y) thereof) are not so used within 12 months (in the case of
clause (x) to the preceding proviso) or 24 months (in the case of clause (y) to
the preceding proviso) after the date of the respective Recovery Event, such
remaining portion shall be applied on the date which is 12 or 24 months, as the
case may be, following such Recovery Event as a mandatory repayment and/or
commitment reduction in accordance with the requirements of Section 4.02(m).
-44-
<PAGE>
(i) Each amount required to be applied pursuant to Sections
4.02(d)(ii), (e)(ii), (f)(ii), (g)(ii) and (h)(ii) shall be applied (i) first,
-----
to permanently repay or prepay the principal of outstanding Indebtedness (but
not Indebtedness owing to the Company or any of its Subsidiaries) of Tudor and
its Subsidiaries which is required to be repaid as a result of the respective
event giving rise to the required repayment pursuant to this Section 4.02 (it
being understood that any amount permanently repaid or prepaid pursuant to this
clause (i) may not be reborrowed or refinanced and, if the respective repayment
or prepayment is in respect of a revolving or similar commitment, such revolving
or similar commitment shall be reduced by the amount of the respective repayment
or prepayment pursuant to this clause (i)), (ii) second, at the option of the
------
Company, to the extent in excess of the amounts required to be applied pursuant
to the preceding clause (i), the remaining amount may be applied to permanently
repay or prepay the principal of outstanding Indebtedness (but not Indebtedness
owing to the Company or any of its Subsidiaries) of Tudor and its Subsidiaries
(it being understood that any amount permanently repaid or prepaid pursuant to
this clause (ii) may not be reborrowed or refinanced and, if the respective
repayment or prepayment is in respect of a revolving or similar commitment, such
revolving or similar commitment shall be reduced by the amount of the respective
repayment or prepayment pursuant to this clause (ii)) and (iii) third, to the
-----
extent in excess of the amounts actually applied pursuant to the preceding
clauses (i) and (ii), the remaining amount shall otherwise be applied as
required by the immediately succeeding sentence. Any amount to be applied
pursuant to clause (iii) of the immediately preceding sentence shall (x) be
required to be repatriated to shareholders of Tudor or to the Company by way of
Dividends or repayments of intercompany indebtedness, (y) of the gross amount
repatriated as required by preceding clause (x), the Company (whether directly
or through repatriations received by it from its Wholly-Owned Subsidiaries)
shall be required to receive an amount which is at least equal to the Tudor
Percentage at the time the respective repatriation is made (net of any
applicable withholding taxes or other amounts required under applicable law to
be withheld in respect of the amount repatriated to the Company) and (z) the net
amount actually repatriated to the Company as described in preceding clause (y)
(taking the actual percentage received by the Company of the amount distributed,
whether same is based on the Tudor Percentage or is a higher percentage) shall
be applied as otherwise required by Sections 4.02(j) and (k); provided that,
notwithstanding anything to the contrary contained above, to the extent that the
repatriation of amounts as required by this sentence would result in a violation
of applicable restrictions on repatriations contained in Indebtedness of Tudor
and its Subsidiaries (and so long as such restrictions are not more restrictive
that those permitted to exist pursuant to clause (ix) of Section 10.13), the
application pursuant to this sentence may be delayed until the respective
repatriations are permitted to be made (it being understood and agreed that the
Company shall be required to cause repatriations to occur from time to time to
the maximum extent permitted under the applicable such restrictions in such
Indebtedness until the full amount which otherwise would have been required to
be applied pursuant to clause (iii) of the immediately preceding sentence has
been applied in accordance with the requirements of this sentence without giving
effect to the proviso hereto) in accordance with such restrictions contained in
such Indebtedness."
-45-
<PAGE>
(j) Each amount required to be applied to the Loans pursuant to
Sections 4.02(d)(i), (e)(i), (f)(i), (g)(i) and (h)(i), or required to be
applied pursuant to this Section 4.02(j) by the last sentence of Section 4.02(i)
or pursuant to Section 4.02(m), shall be applied pro rata to each Tranche of
--- ----
Term Loans based upon the then remaining principal amounts (and, in the case of
the Tranche A Term Loans, the Tranche A Letter of Credit Outstandings at such
time) of the respective Tranches (with each Tranche of Term Loans to be
allocated that percentage of the amount to be applied as is equal to a fraction
(expressed as a percentage) the numerator of which is the then outstanding
principal amount of such Tranche of Term Loans and, in the case of the Tranche A
Term Loans, the Tranche A Letter of Credit Outstandings at such time and the
denominator of which is equal to the then outstanding principal amount of all
Term Loans and the Tranche A Letter of Credit Outstandings at such time. Any
amount required to be applied to each Tranche of Term Loans pursuant to this
Section 4.02(j) shall be applied to repay the outstanding principal amount of
Term Loans of the respective Tranche then outstanding and, to the extent in
excess thereof in the case of an application to the Tranche A Term Loans, shall
next apply to cash collateralize the Tranche A Letter of Credit Outstandings
(and reduce the Total Tranche A Term Loan Commitment) by the amount of the
excess remaining to be applied. The amount of each principal repayment of Term
Loans made as required by this Section 4.02(j) shall be applied to reduce the
then remaining Scheduled Repayments of the respective Tranche on a pro rata
--- ----
basis (based upon the then remaining amounts of the Scheduled Repayments of the
respective Tranche).
(k) With respect to each repayment of Loans required by this Section
4.02, the Company may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings of the respective Tranche pursuant to which such
Eurodollar Loans were made, provided that: (i) repayments of Eurodollar Loans
--------
pursuant to this Section 4.02 may only be made on the last day of an Interest
Period applicable thereto unless all Eurodollar Loans of the respective Tranche
with Interest Periods ending on such date of required repayment and all Base
Rate Loans of the respective Tranche have been paid in full; (ii) if any
repayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
less than $10,000,000, such Borrowing shall be converted at the end of the then
current Interest Period into a Borrowing of Base Rate Loans; and (iii) each
repayment of any Loans made pursuant to a Borrowing shall, except as set forth
in Section 4.02(a), be applied pro rata among such Loans. In the absence of a
--- ----
designation by the Company as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion with a view, but no obligation, to minimize breakage costs owing
under Section 1.11.
(l) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date, (ii) all other Loans then outstanding shall be
repaid in full on the respective Maturity Date for such Loans and (iii) on such
date, if any, as a reduction is made to the
-46-
<PAGE>
Total Revolving Loan Commitment pursuant to Section 3.03(i), all then
outstanding Term Loans shall be required to be repaid in full and the Total
Tranche A Term Loan Commitment shall terminate.
(m) Each amount required to be applied pursuant to Sections
4.02(d)(iii), (e)(iii), (f)(iii), (g)(iii) and (h)(iii) shall be applied (i)
first, to permanently repay or prepay the principal of outstanding Indebtedness
- -----
(but not Indebtedness owing to the Company or any of its Subsidiaries) of CEAc
Acquisition Corp. and its Subsidiaries which is required to be repaid as a
result of the respective event giving rise to the required repayment pursuant to
this Section 4.02 (it being understood that any amount permanently repaid or
prepaid pursuant to this clause (i) may not be reborrowed or refinanced and, if
the respective repayment or prepayment is in respect of a revolving or similar
commitment, such revolving or similar commitment shall be reduced by the amount
of the respective repayment or prepayment pursuant to this clause (i)), (ii)
second, at the option of the Company, to the extent in excess of the amounts
- ------
required to be applied pursuant to the preceding clause (i), the remaining
amount may be applied to permanently repay or prepay the principal of
outstanding Indebtedness (but not Indebtedness owing to the Company or any of
its Subsidiaries) of CEAc Acquisition Corp. and its Subsidiaries (it being
understood that any amount permanently repaid or prepaid pursuant to this clause
(ii) may not be reborrowed or refinanced and, if the respective repayment or
prepayment is in respect of a revolving or similar commitment, such revolving or
similar commitment shall be reduced by the amount of the respective repayment or
prepayment pursuant to this clause (ii)) and (iii) third, to the extent in
-----
excess of the amounts actually applied pursuant to the preceding clauses (i) and
(ii), the remaining amount shall otherwise be applied as required by the
immediately succeeding sentence. Any amount to be applied pursuant to clause
(iii) of the immediately preceding sentence shall (x) be required to be
repatriated to shareholders of CEAc Acquisition Corp. or to the Company by way
of Dividends or repayments of intercompany indebtedness, (y) of the gross amount
repatriated as required by preceding clause (x), the Company (whether directly
or through repatriations received by it from its Wholly-Owned Subsidiaries)
shall be required to receive an amount which is at least equal to the CEAc
Acquisition Percentage at the time the respective repatriation is made (net of
any applicable withholding taxes or other amounts required under applicable law
to be withheld in respect of the amount repatriated to the Company) and (z) the
net amount actually repatriated to the Company as described in preceding clause
(y) (taking the actual percentage received by the Company of the amount
distributed, whether same is based on the CEAc Acquisition Percentage or is a
higher percentage) shall be applied as otherwise required by Sections 4.02(j)
and (k); provided that, notwithstanding anything to the contrary contained
above, to the extent that the repatriation of amounts as required by this
sentence would result in a violation of applicable restrictions on repatriations
contained in or required by Indebtedness of CEAc Acquisition Corp. and its
Subsidiaries (and so long as such restrictions are not more restrictive that
those contained in the Exide European Refinancing Facility Agreement as
originally in effect), the application pursuant to this sentence may be delayed
until the respective repatriations are permitted to be made (it being understood
and agreed that the Company shall be required to cause repatriations to occur
from time to time
-47-
<PAGE>
to the maximum extent permitted under the applicable such restrictions in such
Indebtedness until the full amount which otherwise would have been required to
be applied pursuant to clause (iii) of the immediately preceding sentence has
been applied in accordance with the requirements of this sentence without giving
effect to the proviso hereto) in accordance with such restrictions contained in
such Indebtedness.
(n) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Company shall be required to repay that principal amount of Tranche C Term
Loans, to the extent then outstanding, as is set forth opposite such date (each
such repayment, as the same may be reduced as provided in Sections 4.01 and
4.02(j), a "Tranche C Scheduled Repayment," and each such date, a "Tranche C
Scheduled Repayment Date"), provided that if either or both of the first two
Tranche C Scheduled Repayment Dates listed below occurs on or prior to the
Tranche C Term Loan Borrowing Date, then the amount of the Tranche C Scheduled
Repayment to occur on each such date which occurs on or prior to the Tranche C
Term Loan Borrowing Date shall be reduced to $0 and the amount shown opposite
such date in the table below shall instead be added to the first Tranche C
Scheduled Repayment Date listed below which occurs after the Tranche C Term Loan
Borrowing Date:
<TABLE>
<CAPTION>
Tranche C
Scheduled Repayment Date Amount
------------------------ ------
<S> <C>
March 31, 1996 $625,000
June 30, 1996 625,000
September 30, 1996 625,000
December 31, 1996 625,000
March 31, 1997 625,000
June 30, 1997 625,000
September 30, 1997 625,000
December 31, 1997 625,000
March 31, 1998 625,000
June 30, 1998 625,000
September 30, 1998 625,000
December 31, 1998 625,000
March 31, 1999 625,000
June 30, 1999 625,000
September 30, 1999 625,000
December 31, 1999 625,000
March 31, 2000 19,000,000
June 30, 2000 19,000,000
</TABLE>
-48-
<PAGE>
<TABLE>
<S> <C>
September 30, 2000 19,000,000
December 31, 2000 19,000,000
March 31, 2001 19,000,000
June 30, 2001 19,000,000
September 30, 2001 19,000,000
December 31, 2001 19,000,000
March 31, 2002 19,000,000
Tranche C Term Loan
Maturity Date 19,000,000
</TABLE>
(o) If at any time after the CEAc Acquisition Date it is determined
that, because of a post-closing adjustment to the purchase price pursuant to the
CEAc Acquisition Stock Purchase Agreement or otherwise (including, without
limitation, because of amounts received by the Company or its Subsidiaries as a
result of claims for breach of contract or warranty in connection with the CEAc
Acquisition), the CEAc Acquisition Amount will be less than the amount specified
in the officer's certificate delivered to the Banks on the CEAc Acquisition Date
pursuant to Section 6A.23 (including by way of payment by the CEAc Seller of a
post-closing adjustment to the Company or its Subsidiaries or by way of payments
by the CEAc Seller in respect of claims for breach of contract or warranty),
then on the date such amount is paid or reduction to the purchase price is
effected, the Term Loans shall be required to be repaid in the amount of the
negative adjustment to the CEAc Acquisition Amount in accordance with the
requirements of Sections 4.02(j) and (k), provided that repayments pursuant to
this Section 4.02(o) shall only be required to the extent the aggregate amount
of negative adjustments to the CEAc Acquisition Amount have brought the amount
thereof below $421,850,000; provided further, that to the extent any amounts are
received pursuant to claims for breach of contract or warranty in connection
with the CEAc Acquisition, up to 43% of the amounts received in respect of said
claims may be contributed by the Company to the capital of CEAc and used by CEAc
to permanently repay (and reduce any related revolving or similar commitments)
amounts outstanding pursuant to the CEAc Refinancing Credit Facility to the
extent said capital contribution and repayment is required pursuant to the terms
thereof.
4.03 Method and Place of Payment. Except as otherwise
---------------------------
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Bank or Banks
entitled thereto not later than 12:00 Noon (New York time) on the date when due
and shall be made in Dollars in immediately available funds at the Payment
Office of the Administrative Agent. Whenever any payment to be made hereunder or
under any Note 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 and,
with respect to payments of principal, interest shall be payable at the
applicable rate during such extension.
-49-
<PAGE>
4.04 Net Payments. (a) All payments made by the Company hereunder or
------------
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction (including specifically, but
without limitation, Spain) or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding, except as
provided in the second succeeding sentence, any tax imposed on or measured by
the net income or profits of a Bank pursuant to the laws of the jurisdiction in
which the principal office or applicable lending office of such Bank is located
or any subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Company agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for under this Agreement or under any Note. If any
amounts are payable in respect of Taxes pursuant to the preceding sentence, the
Company agrees to reimburse each Bank, upon the written request of such Bank,
for taxes imposed on or measured by the net income or profits of such Bank
pursuant to the laws of the jurisdiction in which the principal office or
applicable lending office of such Bank is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which the
principal office or applicable lending office of such Bank is located and for
any withholding of income or similar taxes imposed by the United States of
America as such Bank shall determine are payable by, or withheld from, such Bank
in respect of such amounts so paid to or on behalf of such Bank pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Bank pursuant to this sentence. The Company will furnish to the Administrative
Agent within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts (or other reasonably
satisfactory evidence) evidencing such payment by the Company. The Company
agrees to indemnify and hold harmless each Bank, and reimburse such Bank upon
its written request, for the amount of any Taxes so levied or imposed and paid
by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Company and
the Administrative Agent on or prior to the Effective Date, or in the case of a
Bank that is an assignee or transferee of an interest under this Agreement
pursuant to Section 1.13 or 14.04 (unless the respective Bank was already a Bank
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form
-50-
<PAGE>
1001 or 4224 pursuant to clause (i) above, (x) a certificate substantially in
the form of Exhibit E (any such certificate, a "Section 4.04(b)(ii)
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Bank agrees that from time to time after the Effective
Date, when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Company and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Bank to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Company and the Administrative Agent of its inability to deliver any
such Form or Certificate. Notwithstanding anything to the contrary contained in
Section 4.04(a), but subject to Section 14.04(b) and the immediately succeeding
sentence, (x) the Company shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Bank which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that
such Bank has not provided to the Company U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding and (y)
the Company shall not be obligated pursuant to Section 4.04(a) hereof to gross-
up payments to be made to a Bank in respect of income or similar taxes imposed
by the United States if (I) such Bank has not provided to the Company the
Internal Revenue Service Forms required to be provided to the Company pursuant
to this Section 4.04(b) or (II) in the case of a payment, other than interest,
to a Bank described in clause (ii) above, to the extent that such Forms do not
establish a complete exemption from withholding of such taxes. Notwithstanding
anything to the contrary contained in the preceding sentence or elsewhere in
this Section 4.04 and except as set forth in Section 14.04(b), the Company
agrees to pay additional amounts and to indemnify each Bank in the manner set
forth in Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts deducted or
withheld by it as described in the immediately preceding sentence as a result of
any changes after the Effective Date in any applicable law, treaty, governmental
rule, regulation, guideline or order, or in the interpretation thereof, relating
to the deducting or withholding of income or similar taxes.
SECTION 5. Conditions Precedent to Initial Credit Events. The
---------------------------------------------
obligation of each Bank to make Loans, and the obligation of each Issuing Bank
to issue Letters of Credit, on the Initial Borrowing Date, is subject at the
time of the making of such Loans or the issuance of such Letters of Credit to
the satisfaction of the following conditions:
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<PAGE>
5.01 Execution of Agreement; Notes. On or prior to the Initial
-----------------------------
Borrowing Date (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each of the
Banks the appropriate Tranche A Term Note, Tranche B Term Note and/or Revolving
Note executed by the Company and to the Swingline Bank, the Swingline Note
executed by the Company, in each case in the amount, maturity and as otherwise
provided herein.
5.02 Officer's Certificate. On the Initial Borrowing Date, the
---------------------
Administrative Agent shall have received a certificate, dated the Initial
Borrowing Date and signed on behalf of the Company by the President or the Chief
Financial Officer of the Company, stating that all of the conditions in Sections
5.08, 5.09, 5.10, 5.18, 5.20, 5.22 and 7.01 have been satisfied on such date.
5.03 Opinions of Counsel. On the Initial Borrowing Date, the
-------------------
Administrative Agent shall have received from (i) Kirkland & Ellis, U.S. counsel
to the Company and its Subsidiaries, an opinion addressed to the Administrative
Agent, the Agents, the Collateral Agent and each of the Banks and dated the
Initial Borrowing Date covering the matters set forth in Exhibit F-1, (ii) J & A
Garrigues, Spanish counsel to the Company, an opinion addressed to the
Administrative Agent, the Agents, the Collateral Agent and each of the Banks and
dated the Initial Borrowing Date covering the matters set forth in Exhibit F-2,
(iii) counsel to the Seller and Banesto acceptable to the Agents, an opinion
addressed to the Administrative Agent, the Agents, the Collateral Agent and each
of the Banks covering the matters set forth in Exhibit F-3, (iv) counsel
rendering such opinions, reliance letters addressed to the Administrative Agent,
the Agents, the Collateral Agent and each of the Banks and dated the Initial
Borrowing Date with respect to all legal opinions delivered in connection with
the Acquisition, which legal opinions and reliance letters shall be in form and
substance satisfactory to the Agents and (v) local counsel (satisfactory to the
Agents) legal opinions each of which (x) shall be addressed to the
Administrative Agent, the Agents, the Collateral Agent and each of the Banks and
dated the Initial Borrowing Date, (y) shall be in form and substance
satisfactory to the Agents and (z) shall cover the perfection of the security
interests granted pursuant to the Security Documents and such other matters
incident to the transactions contemplated herein as the Agents may reasonably
request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Initial
--------------------------------------
Borrowing Date, the Administrative Agent shall have received a certificate,
dated the Initial Borrowing Date, signed by the President or any Vice President
of each Credit Party, and attested to by the Secretary or any Assistant
Secretary of such Credit Party, in the form of Exhibit G with appropriate
insertions, together with copies of the certificate of incorporation (or
equivalent organizational document) and by-laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be reasonably acceptable to the Agents.
(b) All corporate and legal proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Docu-
-52-
<PAGE>
ments shall be reasonably satisfactory in form and substance to the Agents and
the Required Banks, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams or facsimiles, if any, which the Agents reasonably may have
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate or governmental authorities.
(c) On the Initial Borrowing Date, unless and to the extent otherwise
agreed by the Administrative Agent, the Administrative Agent shall have received
evidence of the amendment to the certificate of incorporation (or equivalent
organizational document) and by-laws of each Foreign Subsidiary whose capital
stock is to be pledged pursuant to the Initial Pledge Agreement permitting the
granting of a security interest in such Foreign Subsidiary's capital stock
pursuant to the Initial Pledge Agreement, in form and substance satisfactory to
the Agents and local counsel to the Agents.
5.05 Employee Benefit Plans; Shareholders' Agreements; Management
------------------------------------------------------------
Agreements; Collective Bargaining Agreements; Debt Agreements; Tax Sharing
- --------------------------------------------------------------------------
Agreements. On the Initial Borrowing Date, there shall have been delivered
- ----------
to the Administrative Agent true and correct copies, certified as true and
complete by an appropriate officer of the Company of:
(i) all "employee benefit plans" as defined in Section 3(3) of
ERISA (other than multiemployer plans as defined in Section 4001(a)(3) of
ERISA), and any other plans or arrangements for the benefit of employees or
senior management of the Company or any of its Subsidiaries, or of Tudor or
any of its Subsidiaries, and any profit sharing plans and deferred
compensation plans of the Company or any of its Subsidiaries, or of Tudor
or any of its Subsidiaries (collectively, the "Employee Benefit Plans");
(ii) all agreements entered into by the Company or any of its
Subsidiaries, or of Tudor or any of its Subsidiaries, governing the terms
and relative rights of its capital stock and any agreements entered into by
shareholders relating to any such entity with respect to its capital stock
(collectively, the "Shareholders' Agreements");
(iii) all agreements with members of, or with respect to, the senior
management and management of the Company or any of its Subsidiaries, or of
Tudor or any of its Subsidiaries (collectively, the "Management
Agreements");
(iv) all collective bargaining agreements applying or relating to
any employee of the Company or any of its Subsidiaries, or of Tudor or any
of its Subsidiaries (collectively, the "Collective Bargaining Agreements");
-53-
<PAGE>
(v) all agreements evidencing or relating to Indebtedness of the
Company or any of its Subsidiaries, or of Tudor or any of its Subsidiaries,
which is to remain outstanding after giving effect to the incurrence of
Loans on the Initial Borrowing Date (collectively, the "Existing
Indebtedness Agreements"); and
(vi) all tax sharing, tax allocation and other similar agreements
entered into by the Company or any Subsidiary of the Company, or by Tudor
or any of its Subsidiaries (collectively, the "Tax Sharing Agreements");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Collective Bargaining Agreements, Existing Indebtedness Agreements
and Tax Sharing Agreements shall be in form and substance reasonably
satisfactory to the Agents and the Required Banks.
5.06 Adverse Change, etc. (a) Since August 9, 1994, nothing shall have
--------------------
occurred (and the Banks shall have become aware of no facts, conditions or other
informa tion not previously known) which the Agents or the Required Banks shall
determine could have a material adverse effect on the rights or remedies of the
Agents or the Banks, or on the ability of the Company, Tudor or their respective
Subsidiaries to perform their respective obligations to the Agents and the Banks
or which could have a material adverse effect on the business, property, assets,
nature of assets, liabilities, condition (financial or otherwise) or prospects
of the Company, of Tudor, or of either such Person and its Subsidiaries taken as
a whole.
(b) All necessary governmental (domestic and foreign) and third party
approvals and/or consents in connection with the Transaction, the transactions
contemplated by the Documents and otherwise referred to herein or therein
(excluding governmental approvals and/or consents not required to be obtained on
or prior to the Initial Borrowing Date) shall have been obtained and remain in
effect, and all applicable waiting periods shall have expired without any action
being taken by any competent authority which restrains, prevents, or imposes
materially adverse conditions upon, the consummation of the Transaction or the
transactions contemplated by the Documents or otherwise referred to herein or
therein. Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the Transaction, the transactions contemplated by the Documents,
the making of the Loans or the issuance of Letters of Credit.
5.07 Litigation. On the Initial Borrowing Date, no litigation by any
----------
entity (private or governmental) shall be pending or threatened with respect to
this Agreement or any documentation executed in connection herewith or the
transactions contemplated hereby, or with respect to any material Indebtedness
of the Company or its Subsidiaries, or of Tudor and its Subsidiaries, which is
to remain outstanding after the consummation of the Initial Borrowing Date, or
which the Agents or Required Banks shall determine could have
-54-
<PAGE>
a material adverse effect on the Transaction or on the business, property,
assets, nature of assets, liabilities, condition (financial or otherwise) or
prospects of the Company, of Tudor, or of either such Person and its
Subsidiaries taken as a whole.
5.08 Acquisition Documents and Initial Tender Offer Documents. (a) On
--------------------------------------------------------
the Initial Borrowing Date, there shall have been delivered to the Banks true
and correct copies of the Acquisition Documents, which Acquisition Documents
(including, without limitation, as to the price per share (including the Dollar
Equivalent thereof)) shall be in form and substance satisfactory to the Agents
and the Required Banks.
(b) On the Initial Borrowing Date, there shall have been delivered to
the Banks true and correct copies of the Initial Tender Offer Documents, which
Initial Tender Offer Documents (including, without limitation, the price
(including the Dollar Equivalent) and conditions to purchase contained in the
Initial Offer to Purchase) shall be in form and substance satisfactory to the
Agents and the Required Banks and shall not be amended with out the consent of
the Agents and the Required Banks.
(c) All terms of, and the documentation for, the Acquisition and the
Initial Tender Offer (including, without limitation, as to the price per share
(including the Dollar Equivalent thereof), all terms and conditions contained in
the Initial Offer to Purchase (it being understood and agreed that the Initial
Tender Offer shall be conditioned upon the tender of at least 51% (on a fully
diluted basis) of the Tudor Shares) and all terms and con ditions contained in
the Purchase Agreement), and any amendments thereto, shall be satis factory to
the Agents and the Required Banks.
(d) On the Initial Borrowing Date, the Initial Tender Offer Filing
Date shall have occurred, and the Company shall have delivered to each Bank true
and correct copies, certified as true and correct by an appropriate officer of
the Company, of all documents filed by or on behalf of the Company with the
Comision Nacional Del Mercado de Valores ("CNMV") in connection with seeking the
Initial Approval, all of which shall be in form and substance satisfactory to
the Agents and the Required Banks.
5.09 Existing Indebtedness. On the Initial Borrowing Date, none of
---------------------
the Company, the Subsidiaries of the Company, Tudor and the Subsidiaries of
Tudor shall have any Indebtedness outstanding except for the Loans and the
Existing Indebtedness. On the Initial Borrowing Date, the aggregate principal
amount of (x) the outstanding Existing Indebtedness of the Company and its
Subsidiaries (other than Tudor and its Subsidiaries) shall not exceed
$290,000,000 and (y) the outstanding Existing Indebtedness of Tudor and its
Subsidiaries shall not exceed $185,000,000 (taking the Dollar Equivalent of all
amounts of such Existing Indebtedness based upon Exchange Rates prevailing on
August 26, 1994). On the Initial Borrowing Date, the Existing Indebtedness
referred to in the immediately preceding sentence shall not have been incurred
in connection with, or in contemplation of, the Transaction and the terms and
conditions of the Existing Indebtedness shall be satisfactory to the Agents and
the Required Banks. On the Initial Borrowing Date (and
-55-
<PAGE>
after giving effect thereto), all of the Existing Indebtedness shall remain
outstanding without any defaults or events of default existing thereunder (or
which will arise thereunder as a result of the Transaction and the financing of
same as contemplated herein) and there shall not be any amendments or
modifications to the agreements and instruments or evidencing such Indebtedness
other than as requested or approved by the Agents or the Required Banks.
5.10 Repayment and Termination of the Existing Chemical Credit
---------------------------------------------------------
Agreement. (a) On or prior to the Initial Borrowing Date, the total
- ---------
commitments under the Existing Chemical Credit Agreement shall have been
terminated and all loans thereunder shall have been repaid in full, together
with interest thereon, all letters of credit issued under the Existing Chemical
Credit Agreement shall have been terminated or supported by one or more Letters
of Credit issued hereunder, and all other amounts owing pursuant to the Existing
Chemical Credit Agreement shall have been repaid in full and the Existing
Chemical Credit Agreement shall have been terminated and be of no further force
or effect, except for certain indemnity, expense or similar provisions contained
therein which by their express terms are intended to survive such termination
and as are satisfactory to the Administrative Agent and the Required Banks, and
the Agents shall have received evidence in form, scope and substance
satisfactory to it that the matters set forth in this Section 5.10(a) have been
satisfied on such date.
(b) On or prior to the Initial Borrowing Date, the creditors under
the Existing Chemical Credit Agreement shall have terminated and released all
security interests and Liens on the assets owned by the Company or any of its
Subsidiaries granted in connection with the Existing Chemical Credit Agreement.
On or prior to the Initial Borrowing Date, the Agents shall have received such
releases of security interests in and Liens on the assets owned by such Persons
as may have been requested by the Agents, which releases shall be in form and
substance satisfactory to the Agents. Without limiting the foregoing, there
shall have been delivered (i) proper termination statements (Form UCC-3 or the
appropriate equivalent) for filing under the UCC of each jurisdiction where a
financing statement (Form UCC-1 or the appropriate equivalent) was filed with
respect to the Company or any of its Subsidiaries in connection with the
security interests created with respect to the Existing Chemical Credit
Agreement and the documentation related thereto, (ii) terminations or
assignments of any security interest in, or Lien on, any patents, trademarks,
copyrights, or similar interests of the Company or any of its Subsidiaries on
which filings have been made, (iii) terminations of all mortgages, leasehold
mortgages and deeds of trust created with respect to property of the Company or
any of its Subsidiaries, in each case, to secure the obligations under the
Existing Chemical Credit Agreement, all of which shall be in form and substance
satisfactory to the Agents and (iv) all collateral owned by the Company or any
of its Subsidiaries in the possession of any collateral agent (whether such
collateral has been delivered directly to such collateral agent or reissued by
such Person to such collateral agent so long as no collateral remains in
possession of such collateral agent), in its capacity as collateral agent under
the Existing Chemical Credit
-56-
<PAGE>
Agreement or the collateral agent under any security document or any other
agent, collat eral agent or trustee for the creditors under the Existing
Chemical Credit Agreement.
(c) The amount of all cash payments made, or required to be made, by
or on behalf of the Company and its Subsidiaries in connection with the
termination of the Existing Chemical Credit Agreement (including, without
limitation, payments of accrued interest with respect thereto and breakage cost,
if any, with respect to eurodollar rate loans) shall not exceed $108,000,000.
5.11 Guaranty. On the Initial Borrowing Date, each Domestic
--------
Subsidiary of the Company shall have duly authorized, executed and delivered a
Guaranty in the form of Exhibit H-1 hereto (as modified, supplemented or amended
from time to time, the "Domestic Subsidiaries Guaranty").
5.12 Pledge Agreements. On the Initial Borrowing Date, each
-----------------
Credit Party (other than Tudor) shall have duly authorized, executed and
delivered a Pledge Agreement in the form of Exhibit I (as modified, supplemented
or amended from time to time, the "Initial Pledge Agreement") and shall have
delivered to the Collateral Agent, as Pledgee, all the Pledged Securities, if
any, referred to therein then owned by such Credit Party, (x) endorsed in blank
in the case of promissory notes constituting Pledged Securities and (y) together
with executed and undated stock powers, in the case of capital stock
constituting Pledged Securities.
5.13 Security Agreement. On the Initial Borrowing Date, each Credit
------------------
Party (other than Tudor) shall have duly authorized, executed and delivered a
Security Agreement in the form of Exhibit J (as modified, supplemented or
amended from time to time, the "Security Agreement") covering all of such Credit
Party's present and future Security Agreement Collateral, together with:
(i) proper Financing Statements (Form UCC-1) fully executed for
filing under the UCC or other appropriate filing offices of each
jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to
be created by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements
that name the relevant Credit Party as debtor and that are filed in the
jurisdictions referred to in clause (a) above, together with copies of such
other financing statements (none of which shall cover the Collateral except
to the extent evidencing Permitted Liens or in respect of which the
Collateral Agent shall have received termination statements (Form UCC-3) or
such other termination statements as shall be required by local law fully
executed for filing);
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(iii) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests intended to be created by
the Security Agreement; and
(iv) evidence that all other actions necessary or, in the
reasonable opin ion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the Security
Agreement have been taken.
5.14 Mortgages; Title Insurance; Surveys; etc. On the Initial
-----------------------------------------
Borrowing Date, the Collateral Agent shall have received:
(i) fully executed counterparts of mortgages, leasehold mortgages
or deeds to secure debt in each case in form and substance reasonably
satisfactory to the Agent (each, a "Mortgage" and, collectively, the
"Mortgages"), which Mortgages shall cover such of the Real Property of the
Company or any Subsidiary as shall be designated as such on Schedule III
(each, a "Mortgaged Property" and, collectively, the "Mortgaged
Properties"), together with evidence that counterparts of the Mortgages
have been delivered to the title insurance company insuring the Lien of the
Mortgages for recording in all places to the extent necessary or, in the
reasonable opinion of the Collateral Agent, desirable to effectively create
a valid and enforceable first priority mortgage lien on each Mortgaged
Property in favor of the Collateral Agent (or such other trustee as may be
required or desired under local law) for the benefit of the Secured
Creditors;
(ii) mortgagee title insurance policies on each Mortgaged Property
issued by title insurers reasonably satisfactory to the Collateral Agent
(the "Mort gage Policies") in amounts satisfactory to the Agents assuring
the Collateral Agent that the Mortgages on such Mortgaged Properties are
valid and enforceable first priority mortgage liens on the respective
Mortgaged Properties, free and clear of all defects and encumbrances except
Permitted Encumbrances and such Mortgage Policies shall otherwise be in
form and substance reasonably satisfactory to the Agents and shall include,
as appropriate, an endorsement for future advances under this Agreement and
the Notes and for any other matter that the Collateral Agent in its
reasonable discretion may reasonably request, shall not include an
exception for mechanics' liens, and shall provide for affirmative insurance
and such reinsurance as the Collateral Agent in its discretion may
reasonably request; and
(iii) a survey, in form and substance satisfactory to the Collateral
Agent, to each Mortgaged Property, certified by a licensed professional
surveyor satisfactory to the Collateral Agent.
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5.15 Projections; Pro Forma Financial Statements; Accountants'
---------------------------------------------------------
Certificates. On or prior to the Initial Borrowing Date, the Company shall
- ------------
have delivered to each Bank:
(i) projected financial statements for the Company and its
Subsidiaries for the period from the Initial Borrowing Date to and
including the seventh anniversary of the Initial Borrowing Date (the
"Projections"), which Projections (x) shall reflect the forecasted
financial condition and income and expenses of the Company and its
Subsidiaries after giving effect to the Transaction and the related
financing thereof and the other transactions contemplated hereby and
thereby, (y) shall be certified by the chief financial officer of the
Company and (z) shall be satisfactory in form and substance to the Agents
and the Required Banks;
(ii) pro forma financial statements (including a balance sheet
--- -----
and income statement) for the Company and its Subsidiaries (including Tudor
and its Subsidiaries) for the one year period ended on the last day of the
fiscal quarter of the Company last ended prior to the Initial Borrowing
Date, assuming (a) the Transaction (other than the Secondary Tender Offer)
was effected on the first day of such one year period, and, (b) the Company
acquired 52% (on a fully diluted basis) of the outstanding Tudor Shares on
the first day of such one-year period, and such pro forma financial
--- -----
statements shall have been certified by Arthur Andersen or such other
independent public accountants as shall be acceptable to the Agents, and
the Agents and the Required Banks shall be satisfied with such pro forma
--- -----
financial statements, and the accounting practices and procedures to be
utilized by the Company and its Subsidiaries following the consummation of
the Initial Tender Offer; and
(iii) the Banks shall have received such accountants' certificates,
calculations and pro forma financial data as shall be reasonably required
by the Agents in order for them to determine compliance with any applicable
covenants contained in any Existing Indebtedness, all of which shall be in
form and substance satisfactory to the Agents and the Required Banks.
5.16 Solvency Certificate; Environmental Analyses; Insurance
-------------------------------------------------------
Analyses. On the Initial Borrowing Date, the Company shall cause to be
- --------
delivered to the Agent:
(i) a certificate in the form of Exhibit K, addressed to the
Agents and each of the Banks and dated the Initial Borrowing Date, from the
chief financial officer of the Company, providing the opinion of the chief
financial officer of the Company that, after giving effect to the
Transaction and the incurrence of all financings contemplated herein, each
of the Company, on a stand-alone basis, and the Company and its
Subsidiaries (including Tudor and its Subsidiaries) taken as a whole, is
not insolvent and will not be rendered insolvent by the indebtedness
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incurred in connection herewith, will not be left with unreasonably small
capital with which to engage in its business and will not have incurred
debts beyond its ability to pay such debts as they mature and become due;
(ii) Phase I environmental assessment reports prepared by Pilko &
Associates with respect to the Real Property of the Company and its
Subsidiaries, and analyses by Pilko & Associates of their liabilities with
respect to "superfund sites" and worker safety issues, the results of which
shall be in form and substance acceptable to the Agents and the Required
Banks;
(iii) Phase I environmental assessments reports prepared by Pilko &
Associates with respect to the real property assets of Tudor and its
Subsidiaries, the results of which shall be in form and substance
acceptable to the Agents and the Required Banks; and
(iv) analyses and evidence of insurance complying with the
requirements of Section 9.03 for the business and properties of the Company
and its Subsidiaries, and of Tudor and its Subsidiaries, in scope, form and
substance satisfactory to the Agents and the Required Banks and, with
respect to all insurance maintained with respect to the Company and its
Subsidiaries (other than Tudor and its Subsidiaries) naming the Collateral
Agent and each of the Banks as an additional insured and the Collateral
Agent as loss payee, and stating that such insurance shall not be cancelled
or revised without 30 days prior written notice by the insurer to the
Administrative Agent.
5.17 Consent Letter. On the Initial Borrowing Date, the
--------------
Administrative Agent shall have received a letter from CT Corporation System,
presently located at 1633 Broadway, New York, New York 10019, substantially in
the form of Exhibit L, indicating its consent to its appointment by each Credit
Party as its agent to receive service of process as specified in Section 14.08.
5.18 Anti-Takeover Laws. No U.S. federal, state or foreign anti-
------------------
takeover law regulating the Acquisition or the Tender Offer shall prohibit or be
reasonably likely to have a material adverse effect on the Acquisition or the
Tender Offer.
5.19 Fees, etc. On the Initial Borrowing Date, the Company shall
----------
have paid to the Administrative Agent, each Agent and each Bank all costs, fees
and expenses (including, without limitation, legal fees and expenses) payable to
the Administrative Agent, such Agent and such Bank to the extent then due.
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5.20 Notices to Holders of Certain Indebtedness. (i) On the
------------------------------------------
Initial Borrowing Date, the Company shall have delivered to the trustee under
the Senior Note Indenture, notice to the effect that this Agreement (and only
this Agreement) constitutes the "Amended Credit Agreement" (as defined in such
indenture), and the Company shall have taken all other action as may be
necessary or, in the opinion of the Agents desirable, to ensure that this
Agreement is entitled to all the rights and benefits afforded the "Amended
Credit Agreement" under such indenture.
(ii) On the Initial Borrowing Date, the Company shall have delivered
to the trustee under the Senior Subordinated Note Indenture, notice to the
effect that this Agreement (and only this Agreement) constitutes the "Amended
Credit Agreement" (as defined in such indenture), and the Company shall have
taken all other action as may be necessary or, in the opinion of the Agents
desirable, to ensure that this Agreement is entitled to all the rights and
benefits afforded the "Amended Credit Agreement" under such indenture.
(iii) On the Initial Borrowing Date, the Company shall have delivered
to the Administrative Agent evidence in form, scope and substance satisfactory
to the Agents that the matters set forth in this Section 5.20 have been
satisfied as of such date.
5.21 Subrogation Rights Agreement. On or prior to the Initial
----------------------------
Borrowing Date, each of the Seller, Banesto and Tudor shall have duly
authorized, executed and delivered to the Administrative Agent a Subrogation
Rights Agreement in the form of Exhibit M hereto (as modified, supplemented or
amended from time to time, the "Subrogation Rights Agreement"), and the
Subrogation Rights Agreement shall be in full force and effect.
5.22 Amendment to Purchase Agreement. On or prior to the Effective
-------------------------------
Date, the parties thereto shall have entered into an amendment to the Purchase
Agreement, in form and substance satisfactory to the Agents, whereby the Seller
acknowledges and agrees to accept Letters of Credit in the form provided to be
issued pursuant to this Agreement in lieu of the guarantees otherwise required
to be delivered to the Seller pursuant to the Purchase Agreement as originally
executed.
SECTION 6. Conditions Precedent to Issuance of Secondary Tender
----------------------------------------------------
Offer Credit Support. The obligation of any Issuing Bank to issue the
- --------------------
Secondary Tender Offer Credit Support is subject to the satisfaction of the
following conditions on the date of the issuance thereof (and no Issuing Bank
shall issue the Secondary Tender Offer Credit Support unless it believes that
the following conditions have been satisfied in all material respects):
6.01 Secondary Tender Offer Filing Date. The date of the issuance
----------------------------------
of the Secondary Tender Offer Credit Support shall be the Secondary Tender Offer
Filing Date, and such date shall occur within six months after the Initial
Tender Offer Filing Date.
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6.02 Secondary Tender Offer Maximum Offered Consideration. Unless
----------------------------------------------------
the Required Banks otherwise agree in writing, the amount of the Secondary
Tender Offer Maximum Offered Consideration shall not exceed the Secondary Tender
Offer Blocked Commitment as in effect immediately before the Secondary Tender
Offer Filing Date. Furthermore, the price per share to be paid for the Remaining
Tudor Shares and Remaining Tudor Convertible Bonds shall be consistent with the
foregoing requirements and shall have been agreed upon by the Company and CNMV.
6.03 Liquidity. On the Secondary Tender Offer Filing Date, the Agents
---------
and the Required Banks shall be reasonably satisfied that the Company and its
Subsidiaries have adequate working capital financing and liquidity to carry on
their respective businesses after giving effect to the consummation of the
Secondary Tender Offer for such period of time as shall be reasonably acceptable
to the Agents and the Required Banks, and the Agents and the Required Banks
shall have received such pro forma calculations and accountants' certificates as
--- -----
shall be reasonably required by, and as shall be in form and substance
reasonably satisfactory to, the Agents and the Required Banks in order for them
to determine compliance with this Section 6.03.
6.04 Treasury Stock Repurchase. Prior to the Secondary Tender Offer
-------------------------
Filing Date, the Treasury Stock Repurchase shall have been consummated in
accordance with the requirements of Section 9.17.
6.05 Secondary Tender Offer Documents. (i) On the Secondary Tender
--------------------------------
Offer Filing Date, there shall have been delivered to the Banks true and correct
copies of the Secondary Tender Offer Documents, which Secondary Tender Offer
Documents (including, without limitation, the conditions to purchase contained
in the Secondary Offer to Purchase) shall be in form and substance satisfactory
to the Agents and the Required Banks.
(ii) On the Secondary Tender Offer Filing Date, the Company shall
have delivered to each Bank true and correct copies, certified as true and
correct by an appropriate officer of the Company, of all documents filed by or
on behalf of the Company with CNMV in connection with seeking the Secondary
Approval.
6.06 Further Assurances. On or prior to the Secondary Tender Offer
------------------
Filing Date, the Agents and the Banks shall have received assurances reasonably
satisfactory to the Agents and the Required Banks (including, without
limitation, from the Company's financial advisors and Spanish counsel) that (i)
pursuant to the Secondary Tender Offer, all of the Remaining Tudor Shares and
Remaining Tudor Convertible Bonds shall be acquired and (ii) upon the
consummation of the Secondary Tender Offer, all Tudor Shares and Tudor
Convertible Bonds shall be delisted from all of the Spanish stock exchanges and
all other exchanges and trading systems.
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6.07 Governmental Approvals. All necessary governmental (domestic
----------------------
and foreign) and third party approvals and/or consents in connection with the
Secondary Tender Offer, the transactions contemplated by the Documents relating
to the Secondary Tender Offer and otherwise referred to herein or therein
relating to the Secondary Tender Offer shall have been obtained and remain in
effect (except for governmental approvals and consents not required to be
obtained prior to the Secondary Tender Offer Filing Date), and all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains, prevents, or imposes materially adverse
conditions upon, the seeking of the Secondary Approval or the Secondary Tender
Offer or the transactions contemplated by the Documents relating to the
Secondary Tender Offer or otherwise referred to herein or therein. Additionally,
there shall not exist any judgment, order, injunction or other restraint issued
or filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions upon the
Secondary Approval or the Secondary Tender Offer, the transactions contemplated
by the Documents relating to the Secondary Tender Offer, the making of the Loans
or the issuance of Letters of Credit.
6.08 Litigation. On the Secondary Tender Offer Filing Date, no
----------
litigation by any entity (private or governmental) shall be pending or
threatened with respect to this Agreement or any documentation executed in
connection herewith or the transactions con templated hereby, or with respect to
the Secondary Tender Offer or which the Agents or Required Banks shall determine
could reasonably be expected to have a material adverse effect on the ability of
the Company to consummate the Secondary Tender Offer.
6.09 Anti-Takeover Laws. No U.S. federal, state or foreign anti-
------------------
takeover law shall prohibit or have a material adverse effect on the ability of
the Company to consummate the Secondary Tender Offer.
SECTION 6A. Conditions Precedent To CEAc Acquisition Date. The
---------------------------------------------
obligation of each Bank to make Loans, and the obligation of each Issuing Bank
to issue Letters of Credit, on and after the CEAc Acquisition Date is subject to
the satisfaction of the following conditions:
6A.01. Execution of Third, Fourth and Fifth Amendments. On or prior
-----------------------------------------------
to the CEAc Acquisition Date, each of the Third Amendment Effective Date, the
Fourth Amendment Effective Date, the Fifth Amendment Effective Date, the Sixth
Amendment Effective Date and the Seventh Amendment Effective Date shall have
occurred.
6A.02. Officer's Certificate. On the CEAc Acquisition Date, the
---------------------
Administrative Agent shall have received a certificate, dated the CEAc
Acquisition Date and signed on behalf of the Company by the President or the
Chief Financial Officer of the Company, stating that all of the conditions in
Sections 6A.06, 6A.07, 6A.08, 6A.09(a) and (c), 6A.10, 6A.11, 6A.15, 6A.17,
6A.18, 6A.19, 6A.20, 7.01 and 7.03 have been satisfied on such date.
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6A.03. Opinions of Counsel. On the CEAc Acquisition Date, the
-------------------
Administrative Agent shall have received from (i) Kirkland & Ellis, U.S. counsel
to the Company and its Subsidiaries, an opinion addressed to the Administrative
Agent, the Agents, the Collateral Agent and each of the Banks and dated the CEAc
Acquisition Date, which opinion shall cover matters, and shall be in form and
substance, satisfactory to each of the Agents, (ii) each local European counsel
to the Company, an opinion addressed to the Administrative Agent, the Agents,
the Collateral Agent and each of the Banks and dated the CEAc Acquisition Date,
each of which opinion shall cover matters, and shall be in form and substance,
satisfactory to each of the Agents, (iii) counsel rendering such opinions,
reliance letters addressed to the Administrative Agent, the Agents, the
Collateral Agent and each of the Banks and dated the CEAc Acquisition Date with
respect to the legal opinions, if any, delivered in connection with the CEAc
Acquisition, which legal opinions and reliance letters shall be in form and
substance reasonably satisfactory to the Agents and (iv) local counsel
(satisfactory to the Agents), legal opinions each of which (x) shall be
addressed to the Administrative Agent, the Agents, the Collateral Agent and each
of the Banks and dated the CEAc Acquisition Date, (y) shall be in form and
substance satisfactory to the Agents and (z) shall cover the perfection of the
security interests granted pursuant to the Security Documents and such other
matters incident to the transactions contemplated herein as the Agents may
reasonably request.
6A.04. Corporate Documents; Proceedings; etc. All corporate and
--------------------------------------
legal proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall be
reasonably satisfactory in form and substance to the Agents and the Required
Banks, and the Administrative Agent shall have received all information and
copies of all documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and bring-down telegrams or
facsimiles, if any, which the Agents reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate or governmental authorities.
6A.05 Due Diligence Reports. On the CEAc Acquisition Date, there
---------------------
shall have been delivered to the Administrative Agent true and correct copies,
certified as true and complete by an appropriate officer of the Company, of each
Due Diligence Report, each of which Due Diligence Reports shall be in form and
substance reasonably satisfactory to the Agents and the Required Banks.
6A.06 Adverse Change, etc. (a) Since the Fifth Amendment
--------------------
Effective Date (or since December 31, 1993 in the case of CEAc and its
Subsidiaries), nothing shall have occurred (and the Banks shall have become
aware of no facts, conditions or other information not previously known) which
the Agents or the Required Banks shall determine could have a material adverse
effect on the rights or remedies of the Agents or the Banks, or on the ability
of the Company, or the Company and its Subsidiaries, to perform their respective
obligations to the Agents and the Banks or which could have a material adverse
effect on the business, property, assets, nature of assets, liabilities,
condition (financial or
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otherwise) or prospects of the Company and its Subsidiaries taken as a whole or
of CEAc and its Subsidiaries taken as a whole.
(b) All necessary governmental (domestic and foreign) and third party
approvals and/or consents in connection with the CEAc Acquisition, the
transactions contemplated by the Documents and otherwise referred to herein or
therein (excluding governmental approvals and/or consents not required to be
obtained on or prior to the CEAc Acquisition Date pursuant to the express
provisions of Section 6A.15(c)) shall have been obtained and remain in effect,
and all applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents, or imposes
materially adverse conditions upon, the consummation of the CEAc Acquisition or
the transactions contemplated by the Documents or otherwise referred to herein
or therein. Additionally, there shall not exist any judgment, order, injunction
or other restraint issued or filed or a hearing seeking injunctive relief or
other restraint pending or notified prohibiting or imposing materially adverse
conditions upon the CEAc Acquisition, the transactions contemplated by the
Documents or the making of the Loans and/or the issuance of Letters of Credit.
6A.07 Litigation. On the CEAc Acquisition Date, no litigation or
----------
investigation by any entity (private or governmental) shall be pending or
threatened with respect to this Agreement or any documentation executed in
connection herewith or the transactions contemplated hereby, or with respect to
the Subject Shares Issuance, the 2005 Senior Unsecured Note Documents or any
material Indebtedness of the Company or its Subsidiaries, or with respect to any
material Indebtedness of CEAc and its Subsidiaries which is to remain
outstanding after the consummation of the CEAc Acquisition, or which the Agents
or the Required Banks shall determine could have a material adverse effect on
the CEAc Acquisition or on the business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Company and
its Subsidiaries taken as a whole or of CEAc and its Subsidiaries taken as a
whole.
6A.08 Acquisition Documents. (a) The aggregate cash consideration
---------------------
to be paid by the Company and its Subsidiaries in connection with the CEAc
Acquisition (excluding payments of fees and expenses, and excluding payments in
respect of intercompany indebtedness owed by CEAc and its Subsidiaries to the
CEAc Seller or any of their respective other Subsidiaries) shall not exceed
$421,950,000.
(b) In addition to the payment made as contemplated by preceding
clause (a) of this Section 6A.08, at the time of the CEAc Acquisition, the
Company shall have caused CEAc to repay in full all intercompany indebtedness
owed by CEAc and its Subsidiaries to the CEAc Seller and any of their respective
other Subsidiaries in accordance with the requirements of the CEAc Acquisition
Stock Purchase Agreement, and the aggregate amount required for such purpose
shall be borrowed by CEAc under the CEAc Refinancing Credit Facility referred to
in Section 6A.09, the aggregate amount of which
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borrowings shall not exceed 830,000,000 French Francs (or its equivalent amount
as calculated pursuant to the CEAc Refinancing Credit Facility).
(c) On the CEAc Acquisition Date, there shall have been delivered to
the Banks true and correct copies of the CEAc Acquisition Documents and all
terms and conditions contained in the CEAc Acquisition Documents, and any
amendments thereto, shall be in form and substance satisfactory to the Agents
and the Required Banks. Without limiting the foregoing, on the CEAc Acquisition
Date (w) the CEAc Acquisition Stock Purchase Agreement shall have been executed
and shall be in the form of the Final Draft CEAc Acquisition Stock Purchase
Agreement, with no changes from the Final Draft CEAc Acquisition Stock Purchase
Agreement except as may have been approved by the Agents and the Required Banks
in their sole discretion, (x) the CEAc Acquisition Warranty Agreement shall have
been executed and delivered and shall be in the same form as the Final Draft
CEAc Acquisition Warranty Agreement, with no changes from the Final Draft CEAc
Acquisition Warranty Agreement except as may have been approved by the Agents
and the Required Banks in their sole discretion, (y) there shall have been no
alterations to the purchase price or terms of the CEAc Acquisition from that set
forth in the Final Draft CEAc Acquisition Stock Purchase Agreement and Final
Draft CEAc Acquisition Warranty Agreement, without the prior written approval of
the Agents and the Required Banks and (z) the CEAc Supply Agreements shall have
been entered into in the form of Schedules 6.1.8 and 6.1.9 to the CEAc
Acquisition Stock Purchase Agreement.
(d) All conditions precedent to the consummation of the CEAc
Acquisition as set forth in the CEAc Acquisition Stock Purchase Agreement shall
have been satisfied, and not waived except with the consent of the Agents and
the Required Banks, to the satisfaction of the Agents and the Required Banks,
and the CEAc Acquisition shall have been consummated in accordance with the
documentation therefor and all applicable laws.
6A.09 CEAc Indebtedness. (a) On the CEAc Acquisition Date (and
-----------------
after giving effect to the CEAc Transaction), the aggregate principal amount of
the outstanding Indebtedness of CEAc and its Subsidiaries (excluding (x)
Indebtedness pursuant to the CEAc Refinancing Credit Facility and (y)
intercompany Indebtedness owed by CEAc or any of its Subsidiaries to the Company
or any of the other Subsidiaries of the Company) (i) constituting Indebtedness
for borrowed money or guarantees thereof shall not exceed $10,000,000 and (ii)
constituting Indebtedness which is not Indebtedness for borrowed money or
guarantees thereof shall not exceed $70,000,000 (in each case taking the Dollar
Equivalent of all amounts of such Indebtedness based upon Exchange Rates
prevailing on January 31, 1995), and the terms and conditions of all such
Indebtedness (all such Indebtedness which is to remain outstanding, herein
called "CEAc Existing Indebtedness") shall be satisfactory to the Agents and the
Required Banks. On the CEAc Acquisition Date (and after giving effect thereto),
all of the Indebtedness referred to in this Section 6A.09 shall remain
outstanding without any defaults or events of defaults existing thereunder (or
which will arise thereunder as a result of the CEAc Acquisition and the
financing of same
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as contemplated herein) and there shall not be any amendments or modifications
to the agreements and instruments or evidencing such Indebtedness other than as
approved by the Agents or the Required Banks.
(b) On or prior to the CEAc Acquisition Date, CEAc and/or its
Subsidiaries shall have entered into a credit agreement on terms, and pursuant
to documentation (as amended, modified and/or supplemented from time to time
pursuant to the terms hereof and thereof, the "CEAc Refinancing Credit
Facility"), reasonably satisfactory to the Required Banks, providing credit
facilities in the aggregate amount of 830,000,000 French Francs, which will be
available for the refinancing on or prior to the CEAc Acquisition Date of the
outstanding Indebtedness of CEAc and its Subsidiaries (other than the CEAc
Existing Indebtedness) at the time of the consummation of the CEAc Acquisition
(although the refinancing may occur immediately after giving effect thereto)
(with such refinancing herein called the "CEAc Refinancing", and the CEAc
Refinancing Credit Facility, together with all related documentation, being
herein called the "CEAc Refinancing Documents"). The Company shall have
delivered to the Banks true and correct copies of the CEAc Refinancing
Documents. On the CEAc Acquisition Date, the Banks shall have received
assurances satisfactory to them that the CEAc Refinancing has been, or will on
such date be, consummated and all terms and conditions contained in the CEAc
Refinancing Documents (including, without limitation, any change of control
provisions, premiums, redemptions, prepayment terms, covenants, defaults,
remedies, interest rates, amortizations, restrictions on payments and dividends,
securing interests, guarantees and other provisions) shall be in form and
substance reasonably satisfactory to the Required Banks.
(c) On the CEAc Acquisition Date, all amounts to be used by the
Company and its Subsidiaries (excluding proceeds of Indebtedness incurred
directly by CEAc and its Subsidiaries) to effect the CEAc Acquisition shall be
loaned by the Company (except that a portion of such amounts reasonably
acceptable to the Agents and the Required Banks may be infused as a common
equity contribution, if so requested by the Company) to CEAc Acquisition Corp.
and/or one or more of its Subsidiaries (all such loans being herein called the
"CEAc Acquisition Intercompany Indebtedness"), which CEAc Acquisition
Intercompany Indebtedness shall be evidenced by intercompany notes (the "CEAc
Acquisition Intercompany Notes") which are pledged and delivered for pledge
pursuant to the Initial Pledge Agreement. All terms and conditions, and the
documentation for, the CEAc Acquisition Intercompany Indebtedness shall be in
form and substance reasonably satisfactory to the Agents and the Required Banks.
6A.10 Proceeds from the Subject Shares Issuance. On or prior to
-----------------------------------------
January 30, 1995, the Company shall have received net cash proceeds of at least
$249,000,000 from the issuance of the Subject Shares pursuant to the Subject
Shares Issuance.
6A.11 2005 Senior Unsecured Note Issuance; Escrow Release. (a)
---------------------------------------------------
On or prior to May 15, 1995, (i) the Company shall have received gross cash
proceeds of at least $225,000,000 from the issuance of the 2005 Senior Unsecured
Notes pursuant to the 2005
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Senior Unsecured Notes Issuance, and shall have deposited $219,937,500 of such
cash proceeds, plus an amount equal to the Net Cash Proceeds of that principal
amount of 2005 Senior Unsecured Notes issued pursuant to the 2005 Senior
Unsecured Notes Issuance to the extent in excess of $225,000,000, into the 2005
Escrow Account in accordance with the terms of Section 10.05(xvi) and (ii) the
Banks shall have received true and correct copies of the 2005 Senior Unsecured
Note Documents, each of which shall be in full force and effect and all terms
and conditions of the 2005 Senior Unsecured Note Documents (including, without
limitation, interest rates, maturities, amortization schedules, covenants,
redemption provisions, escrow release provisions, escrow investment provisions,
security, exchange provisions, defaults and remedies with respect thereto),
shall be in form and substance satisfactory to the Agents and the Required
Banks.
(b) On the CEAc Acquisition Date, all proceeds then on deposit in the
2005 Escrow Account shall have been released in accordance with the terms of the
2005 Escrow Agreement, which proceeds, together with such other funds available
to the Company on the CEAc Acquisition Date, shall be sufficient to permit the
Company to consummate the CEAc Acquisition and to pay all fees and expenses in
connection therewith, and the Agents shall have received such evidence, in form
and substance satisfactory to the Agents, of the completion of such release.
Prior to or concurrently with the incurrence of Revolving Loans on the CEAc
Acquisition Date, the Company shall utilize all proceeds received by it as
described in this clause (b) to effect the CEAc Acquisition, including the
payment of fees and expenses relating thereto to the extent then due.
(c) On or prior to the CEAc Acquisition Date, each security interest
in and Lien on the 2005 Escrow Account and the 2005 Escrow Agreement, including,
without limitation, on any and all funds then on deposit, or to be deposited, in
the 2005 Escrow Account, shall have terminated.
(d) The Company hereby represents and warrants that it will utilize
proceeds of Revolving Loans for the purpose of providing a substantial portion
of the financing in connection with the CEAc Acquisition.
6A.12 Security Documents. (a) On the CEAc Acquisition Date, each
------------------
Credit Party which is a party to the Initial Pledge Agreement shall have duly
authorized, executed and delivered an amendment to the Initial Pledge Agreement
in the form of Exhibit I-1 hereto and shall have delivered to the Collateral
Agent, as Pledgee, all the Pledged Securities, if any, referred to therein then
owned by CEAc US Holdco and/or such other Credit Party and not previously
delivered to the Collateral Agent, (x) endorsed in blank in the case of
promissory notes constituting Pledged Securities and (y) together with executed
and undated stock powers in blank, in the case of capital stock constituting
Pledged Securities, it being understood and agreed that the Company shall only
be required to deliver certificates representing 65% of the capital stock owned
by it in CEAc US Holdco.
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(b) On or prior to the CEAc Acquisition Date, the Collateral Agent
shall have received fully executed counterparts of amendments (the "Mortgage
Amendments"), in form and substance satisfactory to the Collateral Agent, to
each of the Mortgages, together with evidence that counterparts of each of the
Mortgage Amendments have been delivered to the title company ensuring the Lien
of the existing Mortgages for recording in all places to the extent necessary or
desirable, in the judgment of the Collateral Agent, effectively to maintain a
valid and enforceable first priority mortgage lien on the Mortgaged Properties
in favor of the Collateral Agent for the benefit of the Secured Creditors, and
the Collateral Agent shall have received endorsements to the existing Mortgage
Policies assuring the Collateral Agent that each Mortgage, after giving affect
to the respective Mortgage Amendment, is a valid and enforceable first priority
mortgage lien on the respective Mortgaged Properties, free and clear of all
defects and encumbrances except Permitted Encumbrances.
6A.13 Financial Statements; Projections; Pro Forma Financial
------------------------------------------------------
Statements; Accountants' Certificates. On or prior to the CEAc Acquisition
- -------------------------------------
Date, the Company shall have delivered to each Bank:
(1) the CEAc 1994 Consolidated Financial Statements, and the
results as reflected therein shall show no material adverse change in the
business, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of CEAc and its Subsidiaries from
that shown in the CEAc 1993 Consolidated Financial Statements;
(2) projected financial statements for the Company and its
Subsidiaries for the period from January 1, 1995 to and including June 30,
2002 (the "CEAc Projections"), which CEAc Projections (x) shall reflect the
forecasted financial condition and income and expenses of the Company and
its Subsidiaries after giving effect to the CEAc Transaction (as if same
had occurred on January 1, 1995) and the related financing thereof and the
other transactions contemplated hereby and thereby, (y) shall be certified
by the chief financial officer of the Company and (z) shall be reasonably
satisfactory in form and substance to the Agents and the Required Banks;
(3) pro forma financial statements (including a balance sheet
--- -----
and income statement) for the Company and its Subsidiaries (including CEAc
Acquisition Corp. and its Subsidiaries) for the period of four consecutive
fiscal quarters (taken as one accounting period) last ended prior to the
CEAc Acquisition Date for which financial information in respect thereof is
available, assuming (a) the CEAc Transaction was effected on the first day
of such one year period and (b) the Company acquired 99.7% (on a fully
diluted basis) of the outstanding equity interests in CEAc and the Tudor
Percentage (as then in effect) of the outstanding equity interests in Tudor
on the first day of such one-year period, and such pro forma financial
--- -----
statements shall have been certified by the chief financial officer of
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the Company, and the Agents and the Required Banks shall be reasonably
satisfied with such pro forma financial statements, and the accounting
--- -----
practices and procedures to be utilized by the Company and its Subsidiaries
following the consummation of the CEAc Acquisition; and
(4) the Banks shall have received such accountants' certificates
(including comfort satisfactory to the Agents from Arthur Andersen or such
other independent public accountants as shall be acceptable to the Agents
as to the pro forma financial statements delivered pursuant to preceding
--- -----
clause (iii) as well as the calculations described in this clause (iv)),
calculations and pro forma financial data as shall be reasonably required
--- -----
by the Agents in order for them to determine compliance with any applicable
covenants contained in any Existing Indebtedness;
all of which shall be in form and substance satisfactory to the Agents and the
Required Banks.
6A.14 Solvency Certificate; Environmental Analyses; Insurance
-------------------------------------------------------
Analyses. On the CEAc Acquisition Date, the Company shall have caused to be
- --------
delivered to the Administrative Agent:
(i) a certificate in form and substance satisfactory to the
Agents, addressed to the Agents and each of the Banks and dated the CEAc
Acquisition Date, from the chief financial officer of the Company,
providing the opinion of the chief financial officer of the Company that,
after giving effect to the CEAc Transaction and the incurrence of all
financings contemplated herein, each of the Company, on a stand-alone
basis, and the Company and its Subsidiaries (including CEAc Acquisition
Corp. and its Subsidiaries) taken as a whole, is not insolvent and will
not be rendered insolvent by the indebtedness incurred in connection
herewith, will not be left with unreasonably small capital with which to
engage in its business and will not have incurred debts beyond its
ability to pay such debts as they mature and become due;
(ii) true and correct copies, certified as true and complete by
an appropriate officer of the Company, of each Environmental Report, the
results of which shall be in form and substance reasonably satisfactory
to the Agents and the Required Banks; and
(iii) evidence of insurance complying with the requirements
of Section 9.03 for the business and properties of CEAc and its
Subsidiaries, in scope, form and substance reasonably satisfactory to
the Agents and the Required Banks.
6A.15 Divestitures and/or Limitations; Competition Authority
------------------------------------------------------
Approvals. (a) On or prior to the Fourth Amendment Effective Date (or the
- ---------
CEAc Acquisition Date with respect to the reliance letters described in clause
(i) below, although the Specified
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Competition Counsel Opinions shall have been received by the Fourth Amendment
Effective Date), the Banks shall have received (i) from each Specified
Competition Counsel, reliance letters addressed to the Administrative Agent, the
Agents and each Bank with respect to the relevant Specified Competition Counsel
Opinion with respect to the status of the review of the CEAc Acquisition by the
relevant governmental authority relating to antitrust or the regulation of
competition in the relevant Specified Jurisdiction including the opinion of such
Specified Competition Counsel as to the possible outcomes (on both a "base case"
and "worst case" scenario) of such review including, without limitation, with
respect to the timing of the completion of such review, the likelihood that the
Company would be required to divest any of its or its Subsidiaries' (including
CEAc's and its Subsidiaries') operations, or would otherwise be subject to
limitations on its activities, in such Specified Jurisdiction (on both a "base
case" and "worst case" scenario) and a description of the operations likely to
be subject to any such divestiture or limitations, (ii) from special European
counsel to the Banks, an opinion addressed to the Administrative Agent, the
Agents and each Bank containing such counsel's opinion with respect to the
opinions delivered by the Specified Competition Counsel pursuant to the
preceding clause (i), and (iii) from the Company, the CEAc Divestiture Analysis,
which contains an analysis of the financial impact (including, without
limitation, (x) the reduction in sales, market share, revenue and cash flow and
(y) the incremental costs) to the Company and its Subsidiaries (including CEAc
and its Subsidiaries) in the event that the Company is required to make each of
the possible divestitures, and is subject to any other limitations, identified
in the Specified Competition Counsel Opinions, each of which opinions, reliance
letters (including the relevant opinion attached thereto) and CEAc Divestiture
Analysis, including the calculations and assumptions contained therein, shall be
in form and substance satisfactory to the Agents and the Required Banks. By
executing and delivering a copy of the Fourth Amendment, each signatory thereto
agreed (for itself and its successors) that the legal opinions and CEAc
Divestiture Analysis required by this Section 6A.15(a) have been received by it
and are in form and substance satisfactory to it, provided that it is understood
and agreed that the reliance letters with respect to the Specified Competition
Counsel Opinions have not been received by the Banks on or prior to the Fourth
Amendment Effective Date, and must be received by them on or prior to the CEAc
Acquisition Date and must be in form and substance satisfactory to the Agents
and the Required Banks.
(b) Subject to following clause (c), on the CEAc Acquisition Date,
the Company shall have obtained each of the consents or approvals of any
governmental authority relating to antitrust or the regulation of competition in
each of France, Spain, Portugal, the United Kingdom, Belgium and Austria and
shall have furnished evidence of such approvals to the Agents and the Banks. In
the event that any of the foregoing governmental authorities or any other
relevant governing or regulatory body or agency requires that any operations of
the Company, CEAc or their respective Subsidiaries be divested in connection
with the CEAc Acquisition (or to obtain the approvals referenced in the
immediately preceding sentence) or otherwise imposes any limitations on the
ability of the Company or CEAc to operate the Company's or CEAc's (including
their respective Subsidiaries') businesses, the Company shall, on or prior to
the CEAc Acquisition Date,
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<PAGE>
have delivered to the Agents and Banks a detailed description of any such
actions or restrictions, as well as a detailed description of the actions to be
taken by the Company in connection therewith, as well as an analysis of the
financial impact (including, without limitation, (x) the reduction in sales,
market share, revenue and cash flow and (y) the costs associated therewith) to
the Company and its Subsidiaries (including CEAc and its Subsidiaries) resulting
from such divestiture or limitation, and any such actions or restrictions,
including the Company's proposed response thereto, shall require the approval of
the Agents and the Required Banks, which may be withheld by any such Persons in
their reasonable judgment; provided, that if any such divestiture or limitation
--------
with respect to any Specified Jurisdiction would be in excess of (or the
financial effect which would be worse than) the "worst case" scenario specified
in the Specified Competition Counsel Opinions and CEAc Divestiture Analysis
originally delivered on or prior to the Fourth Amendment Effective Date pursuant
to Section 6A.15(a), then the approval of the Agents and the Required Banks may
be withheld by any such Persons in their sole discretion; provided, further,
-------- --------
that if any divestiture or limitation is required or imposed with respect to
Austria and/or Portugal, then the approval of the Agents and the Required Banks
may be withheld by them unless such Persons determine that the divestitures
and/or limitations required or imposed by or with respect to each such country
are non-material to the business, property, assets, nature of assets,
liabilities, condition (financial and otherwise) and prospects of the Company,
CEAc and their respective Subsidiaries (including, without limitation, Tudor and
its Subsidiaries) in the respective such country.
(c) Notwithstanding anything to the contrary contained in preceding
clause (b), if on the CEAc Acquisition Date, the approvals from one or more of
the governmental authorities relating to antitrust or the regulation of
competition in the United Kingdom, Belgium, France or Spain have not yet been
obtained, and so long as such approvals need not be obtained in order for the
Company to legally effect the CEAc Acquisition in the respective Specified
Jurisdiction, then the Company may effect the CEAc Acquisition and Section
6A.15(b) with respect to each such Specified Jurisdiction shall be satisfied if,
and only if, the following conditions are satisfied on the CEAc Acquisition Date
with respect to each such Specified Jurisdiction where such approvals have not
been obtained on or prior to the CEAc Acquisition Date: (i) on or prior to the
CEAc Acquisition Date, the Company shall have furnished to the Banks copies of
all correspondence furnished to, and received from, the relevant governmental
authorities in each such Specified Jurisdiction and shall have furnished updated
legal opinions from all counsel with respect to such Specified Jurisdictions
referenced in Section 6A.15(a) and an updated CEAc Divestiture Analysis with
respect to each such Specified Jurisdiction, as at the CEAc Acquisition Date,
which opinions and updated analysis shall be revised to take into account any
occurrences after the date of the legal opinions and CEAc Divestiture Analysis
furnished on or prior to the Fourth Amendment Effective Date pursuant to Section
6A.15(a), and which updated legal opinions and CEAc Divestiture Analysis shall
be in form and substance reasonably satisfactory to the Agents and the Required
Banks (it being understood that such updated legal opinions and CEAc Divestiture
Analysis shall be satisfactory if there have been no developments described
therein which make the potential outcomes worse than the "worst
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<PAGE>
case" scenarios described in the Specified Competition Counsel Opinions and CEAc
Divestiture Analysis originally delivered pursuant to Section 6A.15(a), and that
such legal opinions and CEAc Divestiture Analysis shall not be satisfactory if
they conclude that there is any reasonable likelihood of potential outcomes
which are worse than such "worst case" scenarios), (ii) none of the
correspondence received from any governmental authority (which has not been
revoked and taking into account any superseding correspondence from such
governmental authority) shall indicate that any divestitures would be required,
or limitations imposed, in excess of the "worst case" scenario specified in the
Specified Competition Counsel Opinions and CEAc Divestiture Analysis originally
furnished to the Banks on or prior to the Fourth Amendment Effective Date
pursuant to Section 6A.15(a), and (iii) the Agents and the Required Banks shall
be satisfied in their reasonable judgment that it is likely that the approvals
of each such Specified Jurisdiction will ultimately be obtained and that there
will be no divestitures required as a result thereof or limitations on the
activities of the Company's and its Subsidiaries' (including CEAc's and its
Subsidiaries') businesses which would be in excess of (or the financial effect
which would be worse than) the "worst case" scenario specified in the Specified
Competition Counsel Opinions and CEAc Divestiture Analysis originally delivered
on or prior to the Fourth Amendment Effective Date pursuant to Section 6A.15(a).
6A.16 Anti-Takeover Laws. No U.S. federal, state or foreign
------------------
anti-takeover law regulating the CEAc Acquisition shall prohibit or be
reasonably likely to have a material adverse effect on the CEAc Acquisition.
6A.17 Fees, etc. On the CEAc Acquisition Date, the Company shall
---------
have paid to the Administrative Agent, each Agent and each Bank all costs, fees
and expenses (including, without limitation, legal fees and expenses) payable to
the Administrative Agent, such Agent and such Bank to the extent then due.
6A.18 Notices to Holders of Certain Indebtedness. (a) On the
------------------------------------------
CEAc Acquisition Date, the Company shall have delivered to the trustee under the
Senior Note Indenture, notice to the effect that this Agreement, as amended
through the Fifth Amendment, constitutes the "Amended Credit Agreement" (as
defined in such indenture), and the Company shall have taken all other action as
may be necessary or, in the opinion of the Agents desirable, to ensure that this
Agreement is entitled to all the rights and benefits afforded the "Amended
Credit Agreement" under such indenture.
(b) On the CEAc Acquisition Date, the Company shall have delivered to
the trustee under the Senior Subordinated Note Indenture, notice to the effect
that this Agreement, as amended through the Fifth Amendment, constitutes the
"Amended Credit Agreement" (as defined in such indenture), and the Company shall
have taken all other action as may be necessary or, in the opinion of the Agents
desirable, to ensure that this Agreement is entitled to all the rights and
benefits afforded the "Amended Credit Agreement" under such indenture.
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<PAGE>
(c) On or prior to the CEAc Acquisition Date, the Company shall
have entered into and delivered the First Supplemental Indenture to each of
the Senior Note Indenture and Senior Subordinated Note Indenture, each
dated as of January 3, 1995 and in the form furnished to the Banks prior to
the Fourth Amendment Effective Date, and each such supplement shall be in
full force and effect. True and correct copies of the executed First
Supplemental Indentures, and the related Consent Solicitation dated
November 30, 1994, as amended by amendments dated December 20, 1994,
December 21, 1994 and December 23, 1994 (the "Consent Solicitation"), shall
have been delivered to each of the Banks prior to the Fourth Amendment
Effective Date.
(d) On the CEAc Acquisition Date, the Company shall have
delivered to the Administrative Agent evidence in form, scope and substance
satisfactory to the Agents that the matters set forth in this Section 6A.18
have been satisfied as of such date.
6A.19 Schedules. On the CEAc Acquisition Date, the Company shall
---------
have delivered to the Banks true and correct copies of the Schedules
referred to in Sections 8.04, 8.13, 8.15, 8.19, 8.22, 8.25, 9.03,
10.01(iii), 10.05(xvii), 10.06(xii) and 10.13 relating to CEAc Acquisition
Corp. and its Subsidiaries and each such Schedule shall be in form and
substance satisfactory to the Agents and the Required Banks.
6A.20 CEAc Acquisition Amount; CEAc Refinancing Amount. On the
------------------------------------------------
CEAc Acquisition Date, the Company shall have delivered to the Banks a
certificate, which certificate shall set forth the calculations required to
establish such amount, executed by the chief financial officer of the
Company setting forth the CEAc Acquisition Amount and the CEAc Refinancing
Amount.
The acceptance of the proceeds of the Loans on and after the CEAc
Acquisition Date shall constitute a representation and warranty by the
Company to the Agents and each of the Banks that all the conditions
specified in this Section 6A and Section 7 exist as of that time. All of
the certificates, legal opinions and other documents and papers referred to
in this Section 6A and Section 7, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office for the account
of each of the Banks and in sufficient counterparts for each of the Banks
and shall be in form and substance reasonably satisfactory to the Required
Banks.
SECTION 7. Conditions Precedent to All Credit Events. The
-----------------------------------------
obligation of each Bank to make Loans (including Loans made on the Initial
Borrowing Date, but excluding Mandatory Borrowings made thereafter, which
shall be made as provided in Section 1.01(e)) and the obligation of an
Issuing Bank to issue any Letter of Credit (including, without limitation,
the Initial Tender Offer Credit Support and the Secondary Tender Offer
Credit Support), is subject, at the time of each such Credit Event (except
as hereinafter indicated), to the satisfaction of the following conditions:
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7.01 No Default; Representations and Warranties. At the time of
------------------------------------------
each such Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein or in any other Credit Document shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on the date of the making of
such Credit Event (it being understood and agreed that any representation
or warranty which by its terms is made as of a specified date shall be
required to be true and correct in all material respects only as of such
specified date).
7.02 Notice of Borrowing; Letter of Credit Request; Etc. (a)
---------------------------------------------------
Prior to the making of each Loan (excluding Swingline Loans), the Agent
shall have received a Notice of Borrowing meeting the requirements of
Section 1.03(a). Prior to the making of any Swingline Loan, BTCo shall have
received the notice required by section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the respective Issuing Bank shall have received a
Letter of Credit Request meeting the requirements of Section 2.03, and the
respective Issuing Bank shall have received any documentation reasonably
requested by it in connection with the issuance of the respective Letter of
Credit.
7.03 Compliance with Indentures. So long as any Senior Notes,
--------------------------
any 2005 Senior Unsecured Notes or any Senior Subordinated Notes remain
outstanding, at the time of each Borrowing of Revolving Loans and/or
Swingline Loans where, after giving effect to such Borrowing, the aggregate
principal amount of outstanding Revolving Loans and Swingline Loans would
be in excess of $255,000,000, the Banks shall have received the Certificate
last required to be delivered pursuant to Section 9.01(m), and such
certificate shall establish to the satisfaction of the Administrative Agent
and Required Banks that the amount of Revolving Loans and/or Swingline
Loans, as the case may be, requested pursuant to the respective Borrowing
(x) are permitted to be incurred without causing a violation of Section 4.3
of the Senior Note Indenture, the 2005 Senior Unsecured Note Indenture or
the Senior Subordinated Note Indenture and (y) after giving effect thereto,
the Interest Coverage Ratio (as defined in the Indentures) would still be
greater than 2.0:1. So long as any Senior Notes, any 2005 Senior Unsecured
Notes or any Senior Subordinated Notes remain outstanding, each Credit
Event shall comply with the requirements of Section 4.3 of the Senior Note
Indenture, the 2005 Senior Unsecured Note Indenture and the Senior
Subordinated Note Indenture, and, if requested by any Agent or the Required
Banks, the Banks shall have received at the time of any Borrowing of
Revolving Loans or Swingline Loans such updated information with respect to
the Certificate last required to be delivered pursuant to Section 9.01(m)
as may have been reasonably requested, and any opinion of counsel (which
opinion and counsel shall be required to be reasonably satisfactory to the
respective Agent or Required Banks requesting same) as may have been
reasonably requested to assure the Banks that the requirements of this
Section 7.03 and Section 4.3 of the Indentures are satisfied.
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The acceptance of the proceeds of each Credit Event shall
constitute a representation and warranty by the Company to the Agents and
each of the Banks that all the conditions specified in Sections 5 and 6 and
in this Section 7 and applicable to such Credit Event exist as of that
time. All of the Notes, certificates, legal opinions and other documents
and papers referred to in Sections 5 and 6 and in this Section 7, unless
otherwise specified, shall be delivered to the Administrative Agent at the
Notice Office for the account of each of the Banks and, except for the
Notes, in sufficient counterparts for each of the Banks and shall be in
form and substance reasonably satisfactory to the Banks.
SECTION 8. Representations, Warranties and Agreements. In order
------------------------------------------
to induce the Banks to enter into this Agreement and to make the Loans, and
issue (or participate in) the Letters of Credit as provided herein, the
Company makes the following representations, warranties and agreements for
itself and each of its Subsidiaries (including, for the purpose of this
Section 8, (x) Tudor and its Subsidiaries as Subsidiaries of the Company
as, and to the extent, contemplated by the last sentence of the definition
of Subsidiary contained herein and (y) at all times on and after the CEAc
Acquisition Date, CEAc and its Subsidiaries as Subsidiaries of the
Company), all of which shall survive the execution and delivery of this
Agreement and the Notes and the making of the Loans and issuance of the
Letters of Credit, with the occurrence of each Credit Event on or after the
Initial Borrowing Date being deemed to constitute a representation and
warranty that the matters specified in this Section 8 are true and correct
in all material respects on and as of the Initial Borrowing Date and on the
date of each such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only
as of such specified date).
8.01 Corporate Status. Each of the Company and its Subsidiaries
----------------
(i) is a duly organized and validly existing corporation in good standing
under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to
transact the business in which it is engaged and presently proposes to
engage and (iii) is duly qualified and is authorized to do business and is
in good standing in each jurisdiction where the conduct of its business
requires such qualifications except for failures to be so qualified which,
individually or in the aggregate, could not reasonably be expected to have
a material adverse effect on the business, property, assets, nature of
assets, liabilities, condition (financial or otherwise) or prospects (x) of
the Company or of the Company and its Subsidiaries (other than CEAc, Tudor
and their respective Subsidiaries) taken as a whole or (y) unless the
Initial Tender Offer Termination Date has occurred (without consummation of
the Initial Tender Offer), Tudor or of Tudor and its Subsidiaries taken as
a whole.
8.02 Corporate Power and Authority. Each of the Company and its
-----------------------------
Subsidiaries has the corporate power and authority to execute, deliver and
perform the terms and provisions of each of the Documents to which it is
party and has taken all necessary corporate action to authorize the
execution, delivery and performance by it of
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<PAGE>
each of such Documents. Each Credit Party has duly executed and delivered
each of the Documents to which it is party, and each of such Documents
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms.
8.03 No Violation. Neither the execution, delivery or
------------
performance by any Credit Party of the Documents to which it is a party,
nor compliance by it with the terms and provisions thereof, (i) will
contravene in any material respect any provision of any applicable law,
statute, rule or regulation or any applicable order, writ, injunction or
decree of any court or governmental instrumentality, (ii) will conflict
with or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except
pursuant to the Security Documents) upon any of the material properties or
assets of the Company or any of its Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, credit agreement or loan agreement,
or any other material agreement, contract or instrument, to which the
Company or any of its Subsidiaries is a party (including without limitation
the Existing Indebtedness and the Receivables Facility) or by which it or
any of its property or assets is bound or to which it may be subject or
(iii) will violate any provision of the Certificate of Incorporation or By-
Laws of the Company or any of its Subsidiaries.
8.04 Governmental Approvals. Except as set forth on Schedule XI
----------------------
or, in the case of the CEAc Transaction, as set forth on Schedule XII, no
order, consent, approval, license, authorization or validation of, or
filing, recording or registration with (except as have been obtained or
made prior to the Initial Borrowing Date or the CEAc Acquisition Date, as
the case may be), or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance
of any Document (excluding immaterial items required in connection with the
performance of the Documents) or (ii) the legality, validity, binding
effect or enforceability of any such Document.
8.05 Financial Statements; Financial Condition; Undisclosed
------------------------------------------------------
Liabilities; Projections; etc. (a) (i) The consolidated balance sheet of
- ------------------------------
the Company and its Subsidiaries (other than Tudor and its Subsidiaries) at
March 31, 1994, March 31, 1993, March 31, 1992 and June 30, 1994 and the
related consolidated statements of earnings and cash flows and
shareholders' equity of the Company and its Subsidiaries for the fiscal
year or three-month period ended on such dates, as the case may be, copies
of which have heretofore been furnished to the Banks prior to the Effective
Date, (ii) the consolidated balance sheet of Tudor and its Subsidiaries at
December 31, 1993, December 31, 1992, December 31, 1991 and June 30, 1994
and the related consolidated statements of earnings and shareholders'
equity of Tudor and its Subsidiaries for the fiscal year or six-month
period ended on such dates, as the case may be, copies of which have
heretofore been furnished to the Banks prior to the Effective Date, and
(iii) the pro forma (after giving effect to the Transaction, the related
--- -----
financing thereof and the other transactions contemplated hereby and
thereby and prepared pursuant to the requirements contained in Section
5.15(ii)
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<PAGE>
hereof) financial statements of the Company and its Subsidiaries furnished
pursuant to Section 5.15(ii), copies of which have been furnished to the
Banks prior to the Effective Date, present fairly the consolidated
financial condition (or pro forma financial condition, in the case of the
--- -----
statements furnished pursuant to preceding clause (iii)) of the respective
entities purported to be covered thereby at the date of such balance sheets
and the consol idated results of the operations and the consolidated cash
flows (if included) and share holders' equity (or pro forma consolidated
--- -----
results of operations and shareholder's equity in the case of the financial
statements required to be delivered pursuant to preceding clause (iii)) of
the entities purported to be covered thereby for such fiscal year or six-
month period, as the case may be. All such financial statements (other than
the pro forma financial statements furnished pursuant to clause (iii) of
--- -----
the immediately preceding sentence, to the extent expressly noted therein)
have been prepared in accordance with generally accepted accounting
principles and practices consistently applied. Since March 31, 1994 (or
December 31, 1993 in the case of Tudor and its Subsidiaries, but after
giving effect to the CEAc Transaction and the financing thereof) there has
been no material adverse change in the business, property, assets, nature
of assets, liabilities, condition (financial or otherwise) or prospects of
(x) the Company or of the Company and its Subsidiaries (other than Tudor
and its Subsidiaries) taken as a whole, or (y) unless the Initial Tender
Offer Termination Date has occurred (without consummation of the Initial
Tender Offer), Tudor or of Tudor and its Subsidiaries taken as a whole.
(b) (i) On and as of the Initial Borrowing Date and the date of
each Credit Event, after giving effect to the Refinancing and to all
Indebtedness (including the Loans and Letters of Credit) being incurred or
assumed and Liens created by the Company and its Subsidiaries in connection
therewith, (a) the sum of the assets, at a fair valuation, of each of the
Company and each of its Subsidiaries will exceed its debts; (b) each of the
Company and each of its Subsidiaries has not incurred, and does not intend
to incur, and does not believe that it will incur, debts beyond its ability
to pay such debts as such debts mature; and (c) each of the Company and
each of its Subsidiaries, individually, will have sufficient capital with
which to conduct its business. For purposes of this Section 8.05(b), "debt"
means any liability on a claim, and "claim" means (i) right to payment,
whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured or (ii) right to an equitable
remedy for breach of performance if such breach gives rise to a payment,
whether or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed, secured or
unsecured.
(c) Except as fully reflected in the financial statements
delivered pursuant to Section 8.05(a) (including the footnotes to such
financial statements), there were as of the Initial Borrowing Date no
liabilities or obligations with respect to the Company or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually
or in aggregate, would be reasonably expected to be material to the Company
or to the Company and its Subsidiaries taken as a whole. As of the Initial
Borrowing Date, the Company does not know of any
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basis for the assertion against the Company or any of its Subsidiaries of
any liability or obligation of any nature whatsoever that is not fully
reflected in the financial statements delivered pursuant to Section 8.05(a)
which, either individually or in the aggregate, would be reasonably
expected to be material to the Company or to the Company and its Subsidiaries
taken as a whole.
(d) On and as of the Initial Borrowing Date, the Projections
delivered to the Agent and the Banks pursuant to Section 5.15(i) have been
prepared on a basis con sistent with the financial statements referred to
in Section 8.05(a)(iii) (other than as set forth or presented in such
Projections), and there are no statements or conclusions in any of the
Projections which are based upon or include information known to the
Company to be misleading in any material respect or which fail to take
into account material information regarding the matters reported therein.
On the Initial Borrowing Date the Company believed that the Projections
were reasonable and attainable (although actual results may differ from the
Projections and no representation is made that the Projections will in fact
be attained).
(e) The Company has provided the Banks with true and complete
copies of (i) the CEAc 1993 Consolidated Financial Statements and the CEAc
1994 Consolidated Financial Statements, which CEAc 1993 Consolidated
Financial Statements are, and the CEAc 1994 Consolidated Financial
Statements when prepared will be, regulers et sinceres and will give, as
the case may be, une image fidele in conformity with generally accepted
accounting principles in France consistent with prior periods, of the
consolidated financial position of CEAc and its consolidated Subsidiaries
as at December 31, 1993 or December 31, 1994, as the case may be, and of
the consolidated results of their operations for the year then ended and
(ii) the pro forma (after giving effect to the CEAc Transaction and the
--- -----
related financing therefor and prepared pursuant to the requirements
contained in Section 6A.13(iii)) financial statements of the Company and
its Subsidiaries furnished pursuant to Section 6A.13(iii), which present
fairly the pro forma consolidated results of operations and shareholders'
--- -----
equity of the entities to be covered thereby for the period covered
thereby. Since December 31, 1993, there has been no material adverse change
in the business, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of CEAc or of CEAc and its
Subsidiaries taken as a whole.
(f) On and as of the CEAc Acquisition Date, the CEAc Projections
delivered to the Agent and the Banks pursuant to Section 6A.13(ii) have
been prepared on a basis consistent with the financial statements referred
to in this Section 8.05 (other than as set forth in such projections), and
there are no statements or conclusions in any of such projections which are
based upon or include information known to the Company to be misleading in
any material respect or which fail to take into account material
information regarding the matters reported therein. On the CEAc Acquisition
Date the Company believed the projections were reasonable and attainable
(although actual results may differ from the projections and no
representation is made that such projections will in fact be attained).
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8.06 Litigation. There are no actions, suits or proceedings
----------
pending or, to the best knowledge of the Credit Parties, threatened (i) with
respect to any Credit Document, (ii) with respect to any material
Indebtedness of the Company or any of its Subsidiaries or (iii) that are
reasonably likely to materially and adversely affect the business, property,
assets, nature of assets, liabilities, condition (financial or otherwise) or
prospects of (x) the Company or of the Company and its Subsidiaries (other
than Tudor and its Subsidiaries) taken as a whole or (y) unless the Initial
Tender Offer Termination Date has occurred (without consummation of the
Initial Tender Offer), Tudor, or of Tudor and its Subsidiaries taken as a
whole.
8.07 True and Complete Disclosure. All factual information (taken
----------------------------
as a whole) furnished by or on behalf of the Company or any of its
Subsidiaries in writing to the Agents or any Bank (including, without
limitation, all information contained in the Documents) for purposes of or in
connection with this Agreement, the other Credit Documents or any transaction
contemplated herein or therein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of the Company or any
of its Subsidiaries in writing to the Agents or any Bank will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary
to make such information (taken as a whole) not misleading in any material
respect at such time in light of the circumstances under which such
information was provided.
8.08 Use of Proceeds; Margin Regulations. (a) All proceeds of
-----------------------------------
the Term Loans (I) incurred on the Initial Borrowing Date shall be used by
the Borrower (i) to finance, in part, the repayment of amounts owing pursuant
to the Existing Chemical Credit Agreement and (ii) to pay fees and expenses
in connection with this Agreement and the termination of the Existing
Chemical Credit Agreement and (II) incurred after the Initial Borrowing Date
shall be used by the Borrower to fund payments owing as a result of its
acceptance of Tudor Shares and Tudor Convertible Bonds pursuant to the
Initial Tender Offer and in accordance with the terms thereof (or to
reimburse the respective Issuing Bank for payments made pursuant to the
Initial Tender Offer Credit Support for such purposes).
(b) All proceeds of Revolving Loans and Swingline Loans shall be
used (I) to finance, in part, the Initial Tender Offer and the Secondary
Tender Offer (if same is consummated in accordance with the terms of this
Agreement) and (II) for the general corporate purposes and the working
capital needs of the Borrower and its Subsidiaries.
(c) No part of the proceeds of any Loan will be used to purchase
or carry any Margin Stock or to extend credit for the purpose of purchasing
or carrying any Margin Stock. Neither the making of any Loan nor the use of
the proceeds thereof nor the occurrence of any other Credit Event will
violate or be inconsistent with the provisions of Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System. None of the securities
to be acquired pursuant to the Initial Tender Offer or the Secondary Tender
Offer constitute Margin Stock.
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(d) All proceeds of the Tranche C Term Loans shall be used by the
Company to finance, in part, the CEAc Acquisition and the payment of fees and
expenses relating to the CEAc Transaction.
8.09 Tax Returns and Payments. Each of the Company and its
------------------------
Subsidiaries have timely filed or caused to be timely filed, on the due dates
thereof or within applicable grace periods, with the appropriate taxing
authority, all federal, state and other material returns, statements, forms
and reports for taxes (the "Returns") required to be filed by or with respect
to the income, properties or operations of the Company and/or any of its
Subsidiaries. The Returns accurately reflect in all material respects all
liability for taxes of the Company and its Subsidiaries for the periods
covered thereby. The Company and each of its Subsidiaries have paid all
material taxes payable by them other than taxes which are not delinquent, and
other than those contested in good faith and for which adequate reserves have
been established in accordance with generally accepted accounting principles.
There is no material action, suit, proceeding, investigation, audit, or claim
now pending or, to the best knowledge of the Company, threatened by any
authority regarding any taxes relating to the Company or any of its
Subsidiaries. Neither the Company nor any of its Subsidiaries has entered
into an agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of taxes of the Company or any of its Subsidiaries, or is aware of
any circumstances that would cause the taxable years or other taxable periods
of the Company or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations. Neither the Company nor any of its
Subsidiaries has provided, with respect to themselves or property held by
them, any consent under Section 341 of the Code. Neither the Company nor any
of its Subsidiaries has incurred, or will incur, any material tax liability
in connection with the Transaction.
8.10 Compliance with ERISA. (i) Each Plan is in substantial
---------------------
compliance with ERISA and the Code; no Reportable Event has occurred with
respect to a Plan; no Plan is insolvent or in reorganization; no Plan has an
Unfunded Current Liability; no Plan has an accumulated or waived funding
deficiency or has applied for an extension of any amortization period within
the meaning of Section 412 of the Code; all contributions required to be made
with respect to a Plan and a Foreign Pension Plan have been timely made;
neither the Company nor any Subsidiary of the Company nor any ERISA Affiliate
has incurred any material liability to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or expects to
incur any liability (including any indirect, contingent, or secondary
liability) under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted to terminate or appoint a trustee to
administer any Plan; no condition exists which presents a material risk to
the Company or any Subsidiary of the Company or any ERISA Affiliate of
incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the
aggregate liabilities of the Company and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of
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ERISA) in the event of a complete withdrawal therefrom, as of the close of
the most recent fiscal year of each such Plan ended prior to the date of the
most recent Credit Event, would not exceed $50,000; no lien imposed under the
Code or ERISA on the assets of the Company or any Subsidiary of the Company
or any ERISA Affiliate exists or is likely to arise on account of any Plan;
and the Company and its Subsidiaries may cease making contributions to or
terminate an employee benefit plan maintained by any of them without
incurring any material liability.
(ii) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. Neither
the Company nor any of its Subsidiaries has incurred any obligation in
connection with the termination of or withdrawal from any Foreign Pension
Plan. The present value of the accrued benefit liabilities (whether or not
vested) under each Foreign Pension Plan, determined as of the end of the
Company's most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit
liabilities.
8.11 The Security Documents. (a) The provisions of the Security
----------------------
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all the Collateral described therein, and the Security Agreement
(together with the filings required to be made pursuant thereto, which
filings have been made) creates a fully perfected first lien on, and security
interest in, all of the Collateral described therein, subject to no other
Liens other than Permitted Liens. The recordation of the Security Agreement
in the United States Patent and Trademark Office together with filings on
Form UCC-1 made pursuant to the Security Agreement will be effective, under
federal law, to perfect the security interest granted to the Collateral Agent
in the trademarks and patents covered by the Security Agreement and the
filing of the Security Agreement with the United States Copyright Office
together with filings on Form UCC-1 made pursuant to the Security Agreement
will be effective under federal law to perfect the security interest granted
to the Collateral Agent in the copyrights covered by the Security Agreement.
(b) So long as the Collateral Agent, as Pledgee, is in possession
of the Pledged Securities delivered to the Collateral Agent in certificated
form, the security interests created in favor of such Pledgee for the benefit
of the Secured Creditors under the Pledge Agreements constitute first
perfected security interests in the Pledged Securities described in the
respective Pledge Agreements, subject to no security interests of any other
Person. Other than the filing of the Tudor Shares Pledge Agreement with the
Clearing House System in the Kingdom of Spain, no filings or recordings are
required in order to perfect the security interests created in the Pledged
Securities under the Pledge Agreements.
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(c) The Mortgages create, as security for the obligations
purported to be secured thereby, a valid and enforceable perfected security
interest in and Lien on all of the Mortgaged Properties in favor of the
Collateral Agent (or such other trustee as may be named therein) for the
benefit of the Secured Creditors, superior to and prior to the rights of all
third persons (except that the security interest created in the Mortgaged
Properties may be subject to the Permitted Encumbrances related thereto) and
subject to no other Liens (other than Liens permitted under Section 10.01).
Schedule III contains a true and complete list of each Real Property owned or
leased by the Company on the Effective Date, and the type of interest therein
held by the Company. The Company has good and marketable title to all
Mortgaged Properties (or a valid leasehold interest with respect to any
Mortgaged Property which is a leased facility) free and clear of all Liens
except those described in the first sentence of this subsection (c).
8.12 Representations and Warranties in Documents. All
-------------------------------------------
representations and warranties of the Company and any of its Subsidiaries,
and of Tudor and any of its Subsidiaries, set forth in the other Documents
were true and correct in all material respects at the time as of which such
representations and warranties were made or deemed made.
8.13 Properties. The Company and each of its Subsidiaries have
----------
good and valid title to all properties owned by them, including all property
reflected in the most recent balance sheets referred to in each of Sections
8.05(a)(i), (ii) and (iii) (except as sold or otherwise disposed of since the
date of such balance sheets in the ordinary course of business or as
otherwise permitted by Section 10.02), free and clear of all Liens, other
than (i) as referred to in the respective balance sheet or in the notes
thereto or (ii) Permitted Liens. On the Effective Date, Schedule III sets
forth a true and complete description of all Real Property owned or leased by
the Company and/or its Subsidiaries and sets forth the direct owner or lessee
thereof. On the CEAc Acquisition Date, Schedule XIII sets forth a true and
complete description of all Real Property owned or leased by the Company
and/or its Subsidiaries (including CEAc and its Subsidiaries) and sets forth
the direct owner or lessee thereof, other than in connection with the
Shareholder Rights Plan.
8.14 Capitalization. (a) On the Initial Borrowing Date, the
--------------
authorized capital stock of the Company consists of (i) 30,000,000 shares of
the Common Stock, $.01 par value per share (the "Company Common Stock"), of
which 20,015,000 shares are issued and outstanding as of the Fourth Amendment
Effective Date, and (iii) 5,000,000 shares of a class designated as preferred
stock, $.01 par value per share of which no shares are issued and
outstanding. All such outstanding shares have been duly and validly issued,
are fully paid and non-assessable and have been issued free of preemptive
rights. The Company does not have outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock,
or any stock appreciation or similar rights.
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(b) On the Fourth Amendment Effective Date, the authorized capital
stock of Tudor consists of 27,562,500 shares, of which 26,184,375 shares are
issued and outstanding. Of such issued and outstanding shares, 24,636,363
shares are owned by the Company, of which 16,013,635 shares have been pledged
pursuant to the Tudor Shares Pledge Agreement. All such outstanding shares
have been duly and validly issued, are fully paid and nonassessable and have
been issued free of preemptive rights. Tudor does not have outstanding any
securities (other than the Tudor Convertible Bonds) convertible into or
exchangeable for its capital stock or outstanding any rights to subscribe for
or to purchase, or any options for the purchase of, or any agreement
providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock, or any
stock appreciation or similar rights.
(c) On the Fourth Amendment Effective Date, the outstanding
capital stock of CEAc consists of 21,051,836 shares. All such outstanding
shares have been duly and validly issued, are fully paid and non-assessable
and have been issued free of preemptive rights. CEAc does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe or to purchase, or any options
for the purchase of, or any agreement providing for the issuance (contingent
or otherwise) of, or any calls, commitments or claims of any character
relating to, its capital stock, or any stock appreciation or similar rights,
except that the CEAc Seller has the option to purchase the 7,859,512 Option
Shares as described in the CEAc Acquisition Stock Purchase Agreement. On and
at all times after the Tranche C Term Loan Borrowing Date, the Company shall
directly or indirectly own at least 99.7% of the issued and outstanding
shares of capital stock of CEAc.
8.15 Subsidiaries. Schedule IV lists each Subsidiary of the
------------
Company (other than CEAc US Holdco and its Subsidiaries), and the direct and
indirect ownership interests of the Company therein, as of the Effective
Date. Schedule XIV lists each Subsidiary of the Company and of CEAc US
Holdco, and the direct and indirect ownership interests of the Company or
CEAc US Holdco, as the case may be, therein, in each case as of the CEAc
Acquisition Date. With respect to each Subsidiary of the Company (including
CEAc US Holdco and its Subsidiaries), Schedule IV and Schedule XIV accurately
set forth whether the declaration or payment of dividends or similar
distributions by such Subsidiary of its net income is restricted by the
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Subsidiary.
8.16 Compliance with Statutes, etc. Each of the Company and its
------------------------------
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and
the ownership of its property (including applicable statutes, regulations,
orders and restrictions relating to environmental standards and controls and
labor laws), except such noncompliances as would not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, property, assets,
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nature of assets, liabilities, condition (financial or otherwise) or
prospects of (x) the Company or of the Company and its Subsidiaries (other
than CEAc, Tudor and their respective Subsidiaries) taken as a whole or (y)
unless the Initial Tender Offer Termination Date has occurred (without
consummation of the Initial Tender Offer), Tudor or of Tudor and its
Subsidiaries taken as a whole or (z) CEAc or of CEAc and its Subsidiaries
taken as a whole.
8.17 Investment Company Act. Neither the Company nor any of its
----------------------
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
8.18 Public Utility Holding Company Act. Neither the Company nor
----------------------------------
any of its Subsidiaries is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
8.19 Environmental Matters. (a) The Company and each of its
---------------------
Subsidiaries have complied with, and on the date of each Credit Event are in
compliance with, all applicable Environmental Laws and the requirements of
any permits issued under such Environmental Laws, except such non-compliances
as would not individually or in the aggregate reasonably be expected to
materially and adversely affect the business, property, assets, nature of
assets, liabilities or condition (financial or otherwise) or prospects of the
Company, of the Company and its Subsidiaries (other than CEAc, Tudor and
their respective Subsidiaries) taken as a whole, of CEAc, of CEAc and its
Subsidiaries taken as a whole, of Tudor or of Tudor and its Subsidiaries
taken as a whole. Except as disclosed on Schedule V with respect to the
Company and its Subsidiaries (other than CEAc and its Subsidiaries) or
Schedule XV with respect to CEAc and its Subsidiaries, there are no pending
or, to the best knowledge of the Company after due inquiry, past or
threatened Environmental Claims against the Company or any of its
Subsidiaries (including any such claim arising out of the ownership or
operation by the Company or any of its Subsidiaries of any Real Property no
longer owned by the Company or such Subsidiary) or any Real Property
currently owned or operated by the Company or any of its Subsidiaries that
individually or in the aggregate would reasonably be expected to materially
and adversely affect the business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of (x) the
Company or of the Company and its Subsidiaries (other than CEAc, Tudor and
their respective Subsidiaries) taken as a whole, (y) Tudor or of Tudor and
its Subsidiaries taken as a whole or (z) CEAc or of CEAc and its Subsidiaries
taken as a whole. There are no facts, circumstances, conditions or
occurrences with respect to any Real Property owned or operated by the
Company or any of its Subsidiaries or, to the best knowledge of the Company
after due inquiry, any property adjoining or in the vicinity of any such Real
Property that, to the best knowledge of the Company after due inquiry, would
reasonably be expected (i) to form the basis of an Environmental Claim
against the Company or any of its Subsidiaries or any such Real Property that
individually or in the
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aggregate would reasonably be expected to materially and adversely affect the
business, property, assets, nature of assets, liabilities, condition
(financial or otherwise) or prospects of (x) the Company or of the Company
and its Subsidiaries (other than CEAc, Tudor and their respective
Subsidiaries) taken as a whole, (y) Tudor or of Tudor and its Subsidiaries
taken as a whole or (z) CEAc or of CEAc and its Subsidiaries taken as a whole
or (ii) to cause any such Real Property to be subject to any restrictions on
the ownership, occupancy, use or transferability of such Real Property by the
Company or any of its Subsidiaries under any applicable Environmental Law,
except such restrictions as would not individually or in the aggregate
reasonably be expected to materially and adversely affect the business,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of (x) the Company or of the Company and its
Subsidiaries (other than CEAc, Tudor and their respective Subsidiaries) taken
as a whole, (y) Tudor or of Tudor and its Subsidiaries taken as a whole or
(z) CEAc or of CEAc and its Subsidiaries taken as a whole.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by the Company or any of its Subsidiaries, except in such quantities
as are stored or used in compliance with all applicable Environmental Laws,
except such non-compliance as would not individually or in the aggregate
reasonably be expected to materially and adversely affect the business,
property, assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of (x) the Company or the Company and its
Subsidiaries (other than CEAc, Tudor and their respective Subsidiaries) taken
as a whole, (y) Tudor or of Tudor and its Subsidiaries taken as a whole or
(z) CEAc or of CEAc and its Subsidiaries taken as a whole, and are used in
connection with the operation of the business of the Company or any of its
Subsidiaries or the use and maintenance of any such Real Property. Hazardous
Materials have not at any time been Released on or from any Real Property
owned or operated by the Company or any of its Subsidiaries where such
Release would reasonably be expected to form the basis of Environmental
Claims against the Company, any such Subsidiary or any such Real Property and
would individually or in the aggregate reasonably be expected to materially
and adversely effect the business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of (x) the
Company or of the Company and its Subsidiaries (other than CEAc, Tudor and
their respective Subsidiaries) taken as a whole, (y) Tudor or of Tudor and
its Subsidiaries taken as a whole or (z) CEAc or of CEAc and its Subsidiaries
taken as a whole.
8.20 Labor Relations. Neither the Company nor any of its
---------------
Subsidiaries is engaged in any unfair labor practice that would reasonably be
expected to have a material adverse effect on (x) the Company or on the
Company and its Subsidiaries (other than CEAc, Tudor and their respective
Subsidiaries) taken as a whole, (y) Tudor or on Tudor and its Subsidiaries
taken as a whole or (z) CEAc or on CEAc and its Subsidiaries taken as a
whole. There is (i) no unfair labor practice complaint pending against the
Company or any of its Subsidiaries or threatened against any of them, before
the National Labor Relations Board, and no material grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Company or any of its
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Subsidiaries or threatened against any of them, (ii) no strike, labor
dispute, slowdown or stoppage pending against the Company or any of its
Subsidiaries or threatened against the Company or any of its Subsidiaries and
(iii) no union representation proceeding is pending with respect to the
employees of the Company or any of its Subsidiaries, except (with respect to
any matter specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as would not reasonably be expected to have a
material adverse effect on the business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of (x) the
Company or of the Company and its Subsidiaries (other than CEAc, Tudor and
their respective Subsidiaries) taken as a whole, (y) Tudor or of Tudor and
its Subsidiaries taken as a whole or (z) CEAc or of CEAc and its Subsidiaries
taken as a whole.
8.21 Patents, Licenses, Franchises and Formulas. Each of the
------------------------------------------
Company and its Subsidiaries owns all material patents, trademarks, permits,
service marks, trade names, copyrights, licenses, franchises and formulas, or
rights with respect to the foregoing, and has obtained assignments of all
leases and other rights of whatever nature, reasonably necessary for the
present conduct of its business, without any known conflict with the rights
of others which, or the failure to obtain which, as the case may be, would
result in a material adverse effect on the business, operations, assets,
nature of assets, liabilities, condition (financial or otherwise) or
prospects of (x) the Company or of the Company and its Subsidiaries (other
than CEAc, Tudor and their respective Subsidiaries) taken as a whole, (y)
Tudor or of Tudor and its Subsidiaries taken as a whole or (z) CEAc or of
CEAc and its Subsidiaries taken as a whole.
8.22 Indebtedness. Schedule VI sets forth a true and complete
------------
list of all Existing Indebtedness as of the Initial Borrowing Date and
Schedule XVI sets forth a true and complete list of all CEAc Existing
Indebtedness and all CEAc Acquisition Intercompany Indebtedness as of the
CEAc Acquisition Date, and, in each case, accurately sets forth (i) the name
of the primary obligor thereon, (ii) the name of each additional obligor or
guarantor with respect thereto, (iii) the respective currency in which such
indebtedness is denominated, (iv) the amount of such indebtedness
outstanding on the Initial Borrowing Date or the CEAc Acquisition Date, as
the case may be, and, if the respective Indebtedness is pursuant to a
revolving credit or similar facility, the maximum commitments with respect
thereto and (v) whether the respective issue of Indebtedness or the
agreements with respect thereto contain any restrictions on the payment of
dividends or the making of distributions by the respective obligors or
guarantors.
8.23 Tender Offers. At the time of consummation thereof, each
-------------
Tender Offer shall have been consummated in all material respects in
accordance with the terms of the respective Documents and all applicable
laws. At the time of consummation of each Tender Offer, all consents and
approvals of, and filings and registrations with, and all other actions in
respect of, all governmental agencies, authorities or instrumentalities
required in order to make or consummate such Tender Offer will have been
obtained, given, filed or taken and are or will be in full force and effect
(or effective judicial relief with respect
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thereto has been obtained). All applicable waiting periods with respect
thereto have or, prior to the time when required, will have, expired without,
in all such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon such Tender
Offer. Additionally, at the time of the consummation thereof, there shall
not exist any judgment, order or injunction prohibiting or imposing material
adverse conditions upon either Tender Offer or the performance by the Company
of its obligations with respect thereto. All actions taken by the Company
pursuant to or in furtherance of each Tender Offer have been, or will be,
taken in compliance in all material respects with the respective Documents
and all applicable laws. At the time of their dissemination to the public,
each Offer to Purchase and any amendments or supplements thereto and all
documents required to be filed by the Company, pursuant to the Securities
Exchange Act of 1934, as amended, or with the CNMV, copies of which documents
have been delivered to each Bank (other than exhibits to such filings, which
have been made available to each Bank upon request therefor), do not and will
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in light of
the circumstances under which made, not misleading.
8.24 Treatment of Credit Agreement under Indentures. From and
----------------------------------------------
after the Initial Borrowing Date, this Agreement (as same may be amended,
modified or supplemented from time to time) constitutes the "Amended Credit
Agreement" under, and as defined in, each of the Senior Note Indenture and
Senior Subordinated Note Indenture. As such, all Obligations pursuant to
this Agreement shall constitute "Senior Indebtedness" and "Designated Senior
Indebtedness" under, and as defined in, the Senior Subordinated Note
Indenture and will be entitled to the benefits of the subordination
provisions contained in Article 10 of the Senior Subordinated Note Indenture.
8.25 Restrictions on Subsidiaries. (i) Except for restrictions
----------------------------
contained in the Credit Documents, the Indentures or as described in
Schedules VII and XVII, of the CEAc Acquisition Date and after giving effect
thereto there are no contractual or consensual restrictions on the Company or
any of its Subsidiaries which prohibit or otherwise restrict the transfer of
cash or other assets (except that any holder of a Permitted Lien may restrict
the transfer of the assets subject thereto) (x) between the Company and any
of its Subsidi aries or (y) between any Subsidiaries of the Company and (ii)
there are no contractual or consensual restrictions which prohibit the
granting of the security interests pursuant to, and to the extent required
by, the Security Documents.
8.26 CEAc Acquisition. (a) All representations and warranties by
----------------
the Company and any of its Subsidiaries, and of CEAc and any of its
Subsidiaries, set forth in the CEAc Acquisition Documents were true and
correct in all material respects at the time of which such representations
and warranties were made or deemed made. To the best knowledge of the
Company after due inquiry, at the time of the consummation of the CEAc
Acquisition, all representations and warranties by the CEAc Seller contained
in the CEAc Acquisition Documents shall be true and correct in all material
respects (or, if made as of a specific date, shall have been true and correct
as of such specific date). Furthermore, to
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the best knowledge of the Company after due inquiry, at the time of the
consummation of the CEAc Acquisition, the CEAc Seller shall have complied
with all covenants on its part to be performed by it pursuant to the CEAc
Acquisition Documents, without any waiver from the requirements therefrom
without the written consent of the Required Banks.
(b) As of the Fourth Amendment Effective Date (excluding Austria
and Portugal on the Fourth Amendment Effective Date, but not on the CEAc
Acquisition Date) and the CEAc Acquisition Date, the Company has received all
consents and approvals with respect to the CEAc Acquisition from the relevant
governmental authority relating to antitrust or the regulation of competition
in each of Austria, Germany, Ireland, Italy, Portugal and Sweden, and such
consents and approvals do not require that any operations of the Company,
CEAc or their respective Subsidiaries be divested in connection with the CEAc
Acquisition (or to obtain the approvals referenced above in this sentence) or
otherwise impose any limitations on the ability of the Company or CEAc to
operate the Company's or CEAc's (including their respective Subsidiaries')
businesses, except, in the case of Austria and Portugal, any immaterial such
divestitures or limitations which have been approved by the Agents and the
Required Banks pursuant to the last proviso to Section 6A.15(b).
SECTION 9. Affirmative Covenants. The Company hereby covenants
---------------------
and agrees, and the Company shall cause each of its Subsidiaries to covenant
and agree, that on and after the Effective Date and until the Total
Commitments and all Letters of Credit have terminated and the Loans, Notes
and Unpaid Drawings, together with interest, Fees and all other Obligations
(then due and payable in the case of such other Obligations) incurred
hereunder and thereunder, are paid in full:
9.01 Information Covenants. The Company will furnish to each Bank
---------------------
(except that the financial information required by clauses (a) through (f)
below with respect to CEAc Acquisition Corp. and its Subsidiaries shall only
be required to be delivered after the CEAc Acquisition Date);
(a) Monthly Reports. Within 30 days after the end of each fiscal
---------------
month of the Company the consolidated balance sheets of (w) the Company
and its Subsidiaries, (x) the Company and its Subsidiaries (excluding
Tudor, CEAc Acquisition Corp. and their respective Subsidiaries), (y)
Tudor and its Subsidiaries, and (z) CEAc Acquisition Corp. and its
Subsidiaries, each as at the end of such month and the related
statements of income and retained earnings for such month and for the
elapsed portion of the fiscal year ended with the last day of such
month, in each case in form satisfactory to the Agents and setting forth
comparative figures for the corresponding month in the prior fiscal year
and the budgeted figures for such month as set forth in the respective
budget delivered pursuant to Section 9.01(e).
(b) Quarterly Financial Statements. Within 60 days (or 120 days
------------------------------
in the case of the fourth fiscal quarter) after the close of each
quarterly accounting period
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in each fiscal year of the Company, the consolidated balance sheets of
(w) the Company and its Subsidiaries, (x) the Company and its
Subsidiaries (excluding Tudor, CEAc Acquisition Corp. and their
respective Subsidiaries), (y) Tudor and its Subsidiaries and (z) CEAc
Acquisition Corp. and its Subsidiaries, each as at the end of such
quarterly period and the related consolidated statements of income and
cash flows for such quarterly period and for the elapsed portion of the
fiscal year ended with the last day of such quarterly period, in each
case setting forth comparative figures for the related periods in the
prior fiscal year, all of which shall be certified by the chief
financial officer of the Company, subject to normal year-end audit
adjustments and the absence of footnotes.
(c) Annual Financial Statements. Within 120 days after the close
---------------------------
of each fiscal year of the Company, the consolidated (and, in the case
of the statements for the Company and its Subsidiaries, consolidating)
balance sheets of (w) the Company and its Subsidiaries, (x) the Company
and its Subsidiaries (excluding Tudor, CEAc Acquisition Corp. and their
respective Subsidiaries), (y) Tudor and its Subsidiaries and (z) CEAc
Acquisition Corp. and its Subsidiaries, each as at the end of such
fiscal year and the related consolidated (and, in the case of the
statements for the Company and its Subsidiaries, consolidating)
statements of income and retained earnings and of cash flows for such
fiscal year setting forth comparative figures for the preceding fiscal
year and certified, in the case of the consolidated financial
statements, by Arthur Andersen & Co. or such other independent certified
public accountants of recognized national standing reasonably acceptable
to the Administrative Agent, together with a report of such accounting
firm stating that in the course of its regular audit of the respective
financial statements, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge of any Default or Event of Default which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default
or Event of Default has occurred and is continuing, a statement as to
the nature thereof.
(d) Management Letters. Promptly after the receipt thereof by the
------------------
Company or any of its Subsidiaries, a copy of any "management letter"
received by the Company or such Subsidiary from its certified public
accountants and the management's responses thereto.
(e) Budgets; Forecasts. Within 60 days after the first day of
------------------
each fiscal year of the Company, budgets (for (i) the Company and its
Subsidiaries taken as a whole, (ii) the Company and its Subsidiaries
(excluding Tudor, CEAc Acquisition Corp. and their respective
Subsidiaries), (iii) Tudor and its Subsidiaries and (iv) CEAc
Acquisition Corp. and its Subsidiaries) in form and scope reasonably
satisfactory to the Agents (including budgeted statements of income, and
sources and uses of cash and balance sheets) prepared by the Company for
the twelve months beginning on the first day of such fiscal year
accompanied by the statement
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of the chief financial officer of the Company to the effect that, to the
best of his knowledge, the budget is a reasonable estimate for the
period covered thereby.
(f) Officer's Certificates. At the time of the delivery of the
----------------------
financial statements provided for in Section 9.01(a), (b) and (c), a
certificate of the chief financial officer of the Company to the effect
that, to the best of his knowledge, no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has
occurred and is continuing, specifying the nature and extent thereof,
which certificate shall set forth the calculations required to
establish, in the case of the statements delivered pursuant to Sections
9.01(b) and (c), (i) whether the Company, Tudor or CEAc Acquisition
Corp. (as the case may be) was in compliance with the provisions of
Sections 10.02, 10.03, 10.05, 10.06 and 10.08 through 10.11, inclusive,
at the end of such fiscal quarter or fiscal year, as the case may be,
(ii) the amount of any mandatory prepayments and/or commitment reductions
required pursuant to Sections 3.03 and/or 4.02 during such fiscal
quarter or fiscal year (and in the case of the statements delivered
pursuant to Section 9.01(c), the calculations of Company Excess Cash
Flow, Tudor Excess Cash Flow and CEAc Excess Cash Flow for the
respective fiscal year), and (iii) the Company Retained Excess Cash Flow
Amount as at the end of such fiscal quarter or fiscal year (and showing
any changes thereto during the respective period).
(g) Notice of Default or Litigation. Promptly, and in any event
-------------------------------
within two Business Days (or five Business Days in the case of following
clauses (ii) and (iii)) after an officer of the Company or any of its
Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of
any event which constitutes a Default or Event of Default, (ii) any
litigation or governmental investigation or proceeding pending (a)
against the Company or any of its Subsidiaries (including for purposes
of this Section 9.01(g), CEAc Acquisition Corp. and its Subsidiaries)
which could materially and adversely affect the business, property,
assets, nature of assets, liabilities, condition (financial or
otherwise) or prospects of (w) the Company or of the Company and its
Subsidiaries (other than CEAc, Tudor and their respective Subsidiaries)
taken as a whole, (x) Tudor or of Tudor and its Subsidiaries taken as a
whole, (y) CEAc or CEAc and its Subsidiaries taken as a whole or (z)
unless the Tranche C Expiration Date has occurred (without consummation
of the CEAc Acquisition), CEAc Acquisition Corp. or of CEAc Acquisition
Corp. and its Subsidiaries taken as a whole or (b) with respect to any
Document and (iii) any other event which could reasonably be likely to
materially and adversely affect the business, property, assets, nature
of assets, liabilities, condition (financial or otherwise) or prospects
of (x) the Company or of the Company and its Subsidiaries (other than
CEAc, Tudor and their respective Subsidiaries) taken as a whole, (y)
Tudor or of Tudor and its Subsidiaries taken as a whole or (z) CEAc or
CEAc and its Subsidiaries taken as a whole.
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(h) Other Reports and Filings. Promptly, copies of all financial
-------------------------
information, proxy materials and other information and reports, if any,
which the Company or any of its Subsidiaries shall file with the
Securities and Exchange Commission or any successor thereto (the "SEC")
or deliver to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or
other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within
---------------------
five Business Days after, an officer of the Company or any of its
Subsidiaries obtains knowledge thereof, written notice of any of the
following environmental matters (including all reasonably related claims
or liabilities) which could reasonably be expected to result in a
remedial cost to the Company and its Subsidiaries in excess of
$5,000,000:
(i) any pending or threatened Environmental Claim against
the Company or any of its Subsidiaries (including any such claim
arising out of the ownership or operation by the Company or any of
its Subsidiaries of any Real Property then no longer owned by the
Company or such Subsidiary) or any Real Property then owned or
operated by the Company or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any
Real Property owned or operated by the Company or any of its
Subsidiaries that (a) results in material noncompliance by the
Company or any of its Subsidiaries with any applicable
Environmental Law or (b) could reasonably be expected to form the
basis of an Environmental Claim against the Company or any of its
Subsidiaries (including any such claim arising out of the ownership
or operation by the Company or any of its Subsidiaries of any Real
Property then no longer owned by the Company or such Subsidiary) or
any Real Property then owned by the Company or any of its
Subsidiaries;
(iii) any condition or occurrence on any Real Property
owned or operated by the Company or any of its Subsidiaries that
could reasonably be expected to cause such Real Property to be
subject to any restrictions on the ownership, occupancy, use or
transferability by the Company or any of its Subsidiaries of such
Real Property under any Environmental Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned or operated by the Company or
any of its Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency; provided, that in any
event the Company shall deliver to each Bank all written notices
received by the Company or any of its
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Subsidiaries from any government or governmental agency under, or
pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action and the Company's or such Subsidiary's response thereto. In
addition, the Company will provide the Banks with copies of such
detailed reports of any Environmental Claim as may reasonably be
requested by the Banks.
(j) ERISA Matters. The Company will deliver to each of the Banks,
-------------
within 10 Business Days after the filing thereof, a complete copy of the
annual report (Form 5500) of each Plan required to be filed with the
Internal Revenue Service. In addition to any certificates or notices
delivered to the Banks pursuant to Section 9.07, copies of any annual
reports and any material notices received by the Company, any Subsidiary
of the Company or any ERISA Affiliate with respect to any Plan or
Foreign Plan shall be delivered to the Banks no later than 10 Business
Days after the date such report has been filed with the Internal Revenue
Service or such notice has been received by the Company, such Subsidiary
or such ERISA Affiliate, as applicable.
(k) Annual Meetings with Banks. At the request of the
--------------------------
Administrative Agent, the Company shall within 120 days after the close
of each fiscal year of the Company hold a meeting at a time and place
selected by the Company and reasonably acceptable to the Agents, with
all of the Banks at which meeting shall be reviewed the financial
results of the previous fiscal year and the financial condition of the
Company and each of its Subsidiaries and the budgets presented for the
current fiscal year of the Company and its Subsidiaries.
(l) Environmental Report Updates. Not later than October 31 of
----------------------------
each year, in the case of North American operations, and not later than
May 31 of each year, with respect to all other operations (including
European operations), an environmental audit report, satisfactory in
form and scope to the Required Banks and the Administrative Agent, from
Pilko & Associates or another environmental consulting firm acceptable
to the Administrative Agent and the Required Banks, which updates, as of
the end of such fiscal year, the environmental reports initially
prepared and delivered to the Banks pursuant to Sections 5.16(ii) and
(iii) and Section 6A.14(ii).
(m) Indenture Calculations. As long as any Senior Notes, 2005
----------------------
Senior Unsecured Notes or Senior Subordinated Notes are outstanding,
then as soon after the end of each fiscal quarter of the Company as the
financial information in respect thereof is available, and in any event
not later than the date of actual or, if sooner, required delivery of
the respective quarterly financial statements pursuant to Section
9.01(b), a certificate of the Chief Financial Officer of the Company
containing
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calculations required to establish (x) the Interest Coverage Ratio (as
such term is defined in the Indentures) and showing the maximum amount
of Loans which may be incurred by the Company under this Agreement
during the following fiscal quarter while remaining in compliance with
the first paragraph of Section 4.3(a) of the Indentures and (y) showing
the amount of Consolidated Net Tangible Assets (as such term is defined
in the Indentures) as determined on the last day of the immediately
preceding fiscal quarter. Each certificate required by the immediately
preceding sentence shall be accompanied by a report from Arthur Andersen
& Co., S.C., addressed to the Administrative Agent, the Agents and the
Banks then party to this Agreement, in substantially the same form as
the report of Arthur Andersen & Co., S.C. delivered pursuant to Section
5.15(iii) on the Initial Borrowing Date, but covering the certificate
then being delivered pursuant to this Section 9.01(m). Notwithstanding
anything to the contrary contained above, after the CEAc Acquisition
Date, the Company may, at its option, cease complying with clause (x) of
the first sentence of this Section 9.01(m) (without giving rise to any
violation of this Agreement); provided that, if the Company requests any
Borrowing of Revolving Loans or Swingline Loans and, immediately after
giving effect thereto, the aggregate principal amount of outstanding
Revolving Loans and Swingline Loans shall exceed $255,000,000, then no
such Borrowing shall be permitted until the information otherwise
required by clause (x) of the first sentence of this Section 9.01(m) is
delivered and the Banks have received any information or opinions
required by Section 7.03 in connection with such Borrowing.
(n) Borrowing Base Certificate. (i) On the Eleventh Amendment
--------------------------
Effective Date and (ii) thereafter, not later than 12:00 Noon (New York
time) on the twentieth day after the end of each fiscal month, a
borrowing base certificate substantially in the form of Exhibit Q (each,
a "Borrowing Base Certificate"), with respect to the Eligible
Receivables and the Eligible Inventory as of the last day of the
immediately preceding fiscal month, and certified by the Chief Financial
Officer of the Company.
(o) Information Pursuant to CEAc Acquisition Documents; Etc. The
-------------------------------------------------------
Company will deliver to each of the Banks, within 3 Business Days after
its or any of its Subsidiaries' receipt thereof, copies of all written
information received by it or any of its Subsidiaries from (x) the CEAc
Seller, CEAc or any of CEAc's Subsidiaries pursuant to the CEAc
Acquisition Documents, including without limitation all copies of
monthly financial reports received by the Company or its Subsidiaries
with respect to CEAc pursuant to Section 7.2 of the CEAc Acquisition
Stock Purchase Agreement or (y) any governmental authority relating to
antitrust or the regulation of competition in any of Germany, France,
Spain, Portugal, the United Kingdom, Belgium, Austria, Italy, Ireland or
Sweden.
(p) Other Information. From time to time, such other information
-----------------
or documents (financial or otherwise) with respect to the Company or its
Subsidiaries
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(or CEAc Acquisition Corp. and its Subsidiaries) as any Bank may
reasonably request in writing.
9.02 Books, Records and Inspections. The Company will, and will
------------------------------
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with generally accepted
accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. The
Company will, and will cause each of its Subsidiaries to, permit officers and
designated representatives of any Agent or any Bank to visit and inspect,
during regular business hours and under guidance of officers of the Company
or such Subsidiary, any of the properties of the Company or such Subsidiary,
and to examine the books of account of the Company or such Subsidiary and
discuss the affairs, finances and accounts of the Company or such Subsidiary
with, and be advised as to the same by, its and their officers and
independent accountants, all at such reasonable times and intervals and to
such reasonable extent as such Agent or such Bank may request.
9.03 Maintenance of Property; Insurance. Schedule VIII sets forth
----------------------------------
a true and complete listing of all insurance maintained by the Company and
its Subsidiaries (excluding CEAc and its Subsidiaries) as of the Effective
Date. Schedule XVIII sets forth a true and complete listing of all insurance
maintained by, or by the Company on behalf of, CEAc Acquisition Corp. and its
Subsidiaries as of the CEAc Acquisition Date and after giving effect to the
CEAc Acquisition. The Company will and will cause each of its Subsidiaries
to, (i) keep all property necessary in its business in good working order and
condition (ordinary wear and tear excepted), (ii) maintain insurance on all
its property in at least such amounts and against at least such risks as is
consistent and in accordance with industry practice and (iii) furnish to each
Bank, upon written request, full information as to the insurance carried. In
addition to the requirements of the immediately preceding sentence, the
Company and its Subsidiaries will at all times cause insurance of the types
described in Schedule VIII and Schedule XVIII to be maintained (with the same
scope of coverage as that described in Schedule VIII and Schedule XVIII) at
levels which are at least as great as the respective amount described
opposite the respective type of insurance on Schedule VIII and Schedule XVIII
under the column headed "Maximum Amount Required to be Maintained." The
provisions of this Section 9.03 shall be deemed to be supplemental to, but
not duplicative of, the provisions of any of the Security Documents that
require the maintenance of insurance.
9.04 Corporate Franchises. The Company will, and will cause each
--------------------
of its Subsidiaries to, do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises, licenses and patents; provided, however, that nothing in
-------- -------
this Section 9.04 shall prevent (i) sales of assets by the Company or any of
its Subsidiaries in accordance with Section 10.02, (ii) the dissolution or
liquidation of any Subsidiary of the Company which, at the time of
dissolution, had no material assets or liabilities (including, without
limitation, contingent liabilities) or (iii) the withdrawal by the Company or
any of its Subsidiaries of their qualification as a foreign
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corporation in any jurisdiction where such withdrawal would not reasonably be
expected to have a material adverse effect on the business, property, assets,
nature of assets, liabilities, condition (financial or otherwise) or
prospects of (x) the Company or of the Company and its Subsidiaries (other
than CEAc, Tudor and their respective Subsidiaries) taken as a whole, (y)
Tudor or of Tudor and its Subsidiaries taken as a whole or (z) CEAc or of
CEAc and its Subsidiaries taken as a whole.
9.05 Compliance with Statutes, etc. The Company will, and will
------------------------------
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliances as
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of (x) the
Company or of the Company and its Subsidiaries (other than CEAc, Tudor and
their respective Subsidiaries) taken as a whole, (y) Tudor or of Tudor and
its Subsidiaries taken as a whole or (z) CEAc or of CEAc and its Subsidiaries
taken as a whole.
9.06 Compliance with Environmental Laws. (a) The Company will
----------------------------------
comply, and will cause each of its Subsidiaries to comply, with all
Environmental Laws applicable to ownership or use of its Real Property now or
hereafter owned or operated by the Company or any of its Subsidiaries, will
promptly pay or cause to be paid all costs and expenses incurred in such
compliance, and will keep or cause to be kept all such Real Property free and
clear of any Liens imposed pursuant to such Environmental Laws for such
period as such Real Property is owned or operated by the Company or any of
its Subsidiaries, except for such non-compliances, failures to pay or Liens
which individually or in the aggregate would not reasonably be expected to
materially or adversely affect the business, property, assets, nature of
assets, liabilities, condition (financial or otherwise) or prospects of (x)
the Company or of the Company and its Subsidiaries (other than CEAc, Tudor
and their respective Subsidiaries) taken as a whole, (y) Tudor or of Tudor
and its Subsidiaries taken as a whole or (z) CEAc or of CEAc and its
Subsidiaries taken as a whole. Neither the Company nor any of its
Subsidiaries will generate, use, treat, store, release or dispose of, or
permit the generation, use, treatment, storage, release or disposal of
Hazardous Materials on any Real Property now or hereafter owned or operated
by the Company or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property
except for Hazardous Materials used or stored at, or transported from, any
such Real Properties in compliance with all applicable Environmental Laws and
used in connection with the operation, use and maintenance of any such Real
Property, except such non-compliances as would not reasonably be expected to
materially or adversely affect the business, property, assets, nature of
assets, liabilities, condition (financial or otherwise) or prospects of (x)
the Company or of the Company and its Subsidiaries (other than CEAc, Tudor
and their respective Subsidiaries) taken as a whole, (y) Tudor or of Tudor
and its Subsidiaries taken as a whole or (z) CEAc or of CEAc and its
Subsidiaries taken as a whole.
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(b) At the written request of any Agent or the Required Banks,
which request shall specify in reasonable detail the basis therefor, at any
time and from time to time, the Company will provide, at the Company's sole
cost and expense, an environmental site assessment report concerning any Real
Property, prepared by an environmental consulting firm approved by the
Agents, addressing the matters in clause (i), (ii) or (iii) below which gives
rise to such request and estimating the range of the potential costs of any
removal, remedial or other corrective action in connection with any such
matter, provided that in no event shall such request be made unless (i) an
Event of Default has occurred and is continuing, (ii) the Banks receive
notice under Section 9.01(i) for any event for which notice is required to be
delivered for any such Real Property or (iii) the Agent or the Required Banks
reasonably believe that there was a breach of any representation, warranty or
covenant contained in Section 8.19 or 9.06(a). If the Company fails to
provide the same within ninety (90) days after such request was made, any of
the Agents may order the same, and the Company shall grant and hereby grants
to each of the Agents and the Banks and their agents access to such Real
Property and specifically grants each Agent and the Banks an irrevocable non-
exclusive license, subject to the rights of tenants, to undertake such an
assessment, all at the expense of the Company.
9.07 ERISA. As soon as possible and, in any event, within 10 days
-----
after the Company, any Subsidiary of Company or any ERISA Affiliate knows or
has reason to know of the occurrence of any of the following, the Company
will deliver to each of the Banks a certificate of the chief financial
officer of the Company setting forth details as to such occurrence and the
action, if any, that the Company, such Subsidiary or such ERISA Affiliate is
required or proposes to take, together with any notices required or proposed
to be given to or filed with or by the Company, the Subsidiary, the ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with
respect thereto: that a Reportable Event has occurred; that an accumulated
funding deficiency has been incurred or an application may be or has been
made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code with
respect to a Plan; that a contribution required to be made to a Plan or
Foreign Pension Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has an Unfunded Current Liability giving rise to a lien
under ERISA or the Code; that proceedings may be or have been instituted to
terminate or appoint a trustee to administer a Plan; that a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan; that the Company, any Subsidiary of the Company or
any ERISA Affiliate will or may incur any liability (including any indirect,
contingent, or secondary liability) to or on account of the termination of or
withdrawal from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975
or 4980 of the Code or Section 409 or 502(i) or 502(l) of ERISA; or that the
Company or any Subsidiary of the Company may incur any material liability
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than
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as required by Section 601 of ERISA) or any employee pension benefit plan (as
defined in Section 3(2) of ERISA).
9.08 End of Fiscal Years; Fiscal Quarters. The Company will, for
------------------------------------
financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years to end on March 31, (ii) each of its, and each of
its Subsidiaries', fiscal quarters to end consistently with said fiscal year
and with the current practice of the Company; provided that Tudor and its
Subsidiaries and/or CEAc and its Subsidiaries may continue to maintain fiscal
years which end on December 31 (and fiscal quarters consistent therewith) or
may at any time switch to a fiscal year (and fiscal quarters) consistent with
those maintained by the Company as described above.
9.09 Performance of Obligations. The Company will, and will cause
--------------------------
each of its Subsidiaries to, perform all of its obligations under the terms
of each mortgage, indenture, security agreement and other debt instrument
(and including, in any event, all Existing Indebtedness and the Receivables
Facility) by which it is bound, except such non-performances as would not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of (x) the
Company or of the Company and its Subsidiaries (other than CEAc, Tudor and
their respective Subsidiaries) taken as a whole, (y) Tudor or of Tudor and
its Subsidiaries taken as a whole or (z) CEAc or of CEAc and its Subsidiaries
taken as a whole.
9.10 Payment of Taxes. The Company will, and will cause each of
----------------
its Subsidiaries to, pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits,
or upon any properties belonging to it, prior to the date on which material
penalties attach thereto, and all lawful claims which, if unpaid, might
become a Lien or charge (other than a Permitted Lien) upon any properties of
the Company or of any of its Subsidiaries; provided, that neither the Company
--------
nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and
by proper proceedings if it has maintained adequate reserves with respect
thereto in accordance with GAAP.
9.11 Additional Security; Further Assurances; Surveys; etc. (a)
-----------------------------------------------------
The Company will, and will cause each of its Domestic Subsidiaries to, grant
to the Collateral Agent security interests and mortgages (an "Additional
Mortgage") in such Real Property of the Company or any of its Domestic
Subsidiaries as are not covered by the original Mortgages, to the extent
acquired after the Effective Date, and as may be requested from time to time
by the Administrative Agent or the Required Banks (each such Real Property,
an "Additional Mortgaged Property"). All such Additional Mortgages shall be
granted pursuant to documentation reasonably satisfactory in form and
substance to the Administrative Agent (which shall be consistent with the
Mortgages originally executed and delivered, except for changes deemed
necessary or desirable pursuant to relevant local law) and shall constitute
valid and enforceable perfected Liens superior to and prior to the rights
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of all third Persons and subject to no other Liens except as are permitted by
Section 10.01 at the time of perfection thereof. The Additional Mortgages or
instruments related thereto shall be duly recorded or filed in such manner
and in such places as are required by law to establish, perfect, preserve and
protect the Liens in favor of the Collateral Agent required to be granted
pursuant to the Additional Mortgages and all taxes, fees and other charges
payable in connection therewith shall be paid in full.
(b) [INTENTIONALLY OMITTED].
(c) If at any time the Senior Notes are repaid in full, or the
Senior Notes are (or the documentation with respect thereto is) amended,
modified or defeased in a manner which permits the following, the Company
shall cause the Domestic Subsidiaries Guaranty to be amended to delete the
limitations on the maximum liability of the Guarantors thereunder pursuant to
clauses (A) and (B) of the second sentence of Section 1 thereof.
Furthermore, at such time as the Senior Notes are repaid in full, or the
Senior Notes are (or the documentation with respect thereto is) amended,
modified, waived or defeased in a manner which permits the following, the
Company shall take such actions so that all Collateral secures in full all
Obligations hereunder, and to delete the limitations contained in Section
14.17(b) and under the analogous provisions of the Security Documents.
(d) The Company will, and will cause each of its Subsidiaries to,
at the expense of the Company, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps (x) relating to the Collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require or (y) deemed
reasonably necessary or desirable by the Administrative Agent or Collateral
Agent to comply with, or obtain the benefits, of any provisions of applicable
local law (including Spanish law) with respect to the rights and remedies
under this Agreement or the other Credit Documents. Furthermore, the Company
shall cause to be delivered to the Collateral Agent such opinions of counsel,
title insurance and other related documents as may be reasonably requested by
the Collateral Agent to assure itself that this Section 9.11 has been
complied with.
(e) The security interests required to be granted pursuant to this
Section 9.11 shall be granted pursuant to security documentation (which shall
be substantially similar to the Security Documents already executed and
delivered by the Company or its Subsidiaries, as applicable) or otherwise
satisfactory in form and substance to the Administrative Agent and shall
constitute valid and enforceable perfected security interests prior to the
rights of all third Persons and subject to no other Liens except such Liens
as are permitted by Section 10.01. The Additional Security Documents and
other instruments related thereto shall be duly recorded or filed in such
manner and in such places and at such times as are required by law to
establish, perfect, preserve and protect the Liens, in favor of the
Collateral Agent for the benefit of the respective Secured Creditors,
required to be
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granted pursuant to the Additional Security Documents and all taxes, fees and
other charges payable in connection therewith shall be paid in full by the
Company. At the time of the execution and delivery of the Additional
Mortgages, the Company shall cause to be delivered to the Collateral Agent
such opinions of counsel, Mortgage Policies, title surveys, real estate
appraisals and other related documents as may be reasonably requested by the
Agents or the Required Banks to assure themselves that this Section 9.11 has
been complied with.
(f) In the event that the Administrative Agent or the Required
Banks at any time after the Effective Date determine in its or their good
faith discretion (as a result of events or circumstances affecting the
Collateral Agent or the Required Banks after the Effective Date) that real
estate appraisals satisfying the requirements set forth in 12 C.F.R., Part
34-Subpart C, or any successor or similar statute, rule, regulation,
guideline or order (any such appraisal a "Required Appraisal") are or were
required to be obtained, or should be obtained, in connection with any or all
of the Mortgaged Properties or Additional Mortgaged Properties, then, within
120 days after receiving written notice thereof from the Administrative Agent
or the Required Banks, as the case may be, such Required Appraisal shall be
delivered, at the expense of the Company, to the Administrative Agent, which
Required Appraisal, and the respective appraiser, shall be satisfactory to
the Administrative Agent.
(g) The Company agrees that each action required by this Section
9.11 shall be completed as soon as possible, but in no event later than (x)
60 days after such action is requested to be taken by the Administrative
Agent or the Required Banks or (y) in the case of the actions required to be
taken pursuant to the second sentence of Section 9.11(b), the date required
by said sentence.
9.12 Foreign Subsidiaries Security. If following a change in the
-----------------------------
relevant sections of the Code, the regulations and rules promulgated
thereunder and any rulings issued thereunder and at the request of the
Administrative Agent or the Required Banks, counsel for the Company
acceptable to the Administrative Agent and the Required Banks does not within
30 days after such request deliver evidence satisfactory to the
Administrative Agent, with respect to any Foreign Subsidiary which is a
Wholly-Owned Subsidiary of the Company that (i) a pledge of 66-2/3% or more
of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote, (ii) the entering into by such Foreign
Subsidiary of a guaranty in substantially the form of the Subsidiaries
Guaranty or (iii) the entering into by such Foreign Subsidiary of a security
agreement in substantially the form of the Security Agreement, in either case
would cause the earnings of such Foreign Subsidiary to be treated as a deemed
dividend to such Foreign Subsidiary's United States parent or would otherwise
violate a material applicable law, then in the case of a failure to deliver
the evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock not theretofore pledged pursuant to a
Pledge Agreement shall be pledged to the Collateral Agent for the benefit of
the Secured Creditors pursuant to the respective Pledge Agreement (or another
pledge agreement in substantially similar form, if needed), in the case of a
failure to deliver the evidence
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<PAGE>
described in clause (ii) above, such Foreign Subsidiary shall execute and
deliver a guaranty (each a "Foreign Subsidiary Guaranty" and, collectively,
the "Foreign Subsidiary Guarantees") of the Obligations of the Company under
the Credit Documents and under any Secured Interest Rate Protection or Other
Hedging Agreements and (iii) in the case of a failure to deliver the evidence
described in clause (iii) above, such Foreign Subsidiary shall execute and
deliver a security agreement granting the Secured Creditors a security
interest in all of such Foreign Subsidiaries' assets pursuant to the
applicable Security Agreement (or another security agreement of substantially
similar form, if needed), in each case with all documents delivered pursuant
to this Section 9.12 to be in form and substance satisfactory to the
Administrative Agent and the Required Banks; provided, however, that so long
-------- -------
as any obligations under the Exide European Refinancing Facility Agreement or
any permitted refinancing thereof remain outstanding, (x) none of CEAc
Acquisition Corp., CEAc, Tudor, Euro Exide and their respective Subsidiaries
shall be required to take any of the actions required by clauses (i) through
(iii) above and (y) the capital stock of no Subsidiary of CEAc Acquisition
Corp., CEAc, Tudor or Euro Exide shall be required to be pledged to the
Collateral Agent.
9.13 UCC Searches. On or prior to the 60th day following the
------------
Initial Borrowing Date, the Company shall deliver to the Administrative Agent
(at the Company's own cost) copies of Request for Information or Copies (UCC-
11), or equivalent reports verifying that all Financing Statements necessary
or, in the opinion of the Collateral Agent desirable, to perfect the security
interest purported to be created by the Security Agreement shall have been
properly recorded and filed.
9.14 Currency Hedging Agreements; Interest Rate Protection.
-----------------------------------------------------
[INTENTIONALLY OMITTED].
9.15 Permitted Acquisitions. (a) Subject to the remaining
----------------------
provisions of this Section 9.15 applicable thereto and the requirements
contained in the definition of Permitted Acquisition, the Company may from
time to time effect Permitted Acquisitions, so long as (u) in the case of
Permitted Acquisitions effected after the Effective Date and on or prior to
the last day of the fiscal year of the Company ended in March, 1995, the
consideration paid therefor shall consist solely of cash, and the aggregate
amount of cash paid to effect Permitted Acquisitions during such period, when
added to the aggregate amount spent during such period for Permitted Sales
Branch Acquisitions, shall not exceed $3,000,000, (v) in the case of
Permitted Acquisitions effected during the fiscal year of the Company ended
in March, 1996, the consideration paid therefor shall consist solely of (i)
Net Cash Proceeds received by the Company after the Effective Date from the
issuance of its common stock which are permitted to be retained by the
Company pursuant to Section 4.02(d)(i) and shares of common stock of the
Company directly issued as consideration for the respective Permitted
Acquisition and/or (ii) other cash available to the Company, provided that
the aggregate amount of cash consideration and the fair market value of
common stock of the Company issued as consideration for all such Permitted
Acquisitions during such fiscal year, when aggregated with the amount spent
during such fiscal year for
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<PAGE>
Permitted Sales Branch Acquisitions, shall not exceed $10,000,000, of which
not more than $5,000,000 shall consist of cash available to the Company as
described in preceding clause (ii), (w) with respect to Permitted
Acquisitions effected after the last day of the Company's fiscal year ended
in March, 1996, the consideration paid for each Permitted Acquisition shall
consist solely of (i) Net Cash Proceeds received by the Company after the
Effective Date from the issuance of its common stock which are permitted to
be retained by the Company pursuant to Section 4.02(d)(i), other cash
available to the Company not to exceed, when added to the aggregate principal
amount of Acquired Indebtedness assumed or incurred by the Company and its
Subsidiaries as a result of the respective Permitted Acquisition, the Company
Retained Excess Cash Flow Amount as determined immediately before the
respective payment is made and shares of common stock of the Company directly
issued as part of the consideration for the respective Permitted Acquisition,
(x) after giving effect to all Permitted Acquisitions effected pursuant to
this Section 9.15 after March 31, 1996 the sum of (without duplication) (i)
the aggregate amount of all Net Cash Proceeds received by the Company from
the issuance of its common stock which are (or have been) used to finance, in
whole or in part, Permitted Acquisitions made after March 31, 1996, (ii) the
aggregate fair market value (as determined in good faith by the Board of
Directors of the Company) of all common stock issued by the Company as
consideration to sellers in connection with Permitted Acquisitions made after
March 31, 1996, (iii) the aggregate amount of other cash used to finance, in
whole or in part, Permitted Acquisitions made after March 31, 1996 and (iv)
the aggregate principal amount of all Acquired Indebtedness incurred or
assumed in connection with Permitted Acquisitions, shall not exceed
$50,000,000 in the aggregate for all Permitted Acquisitions made after March
31, 1996, (y) with respect to each Permitted Acquisition where the amount of
cash consideration and the fair market value of any common stock of the
Company issued as consideration exceeds $5,000,000, the Company shall furnish
to the Banks pro forma financial statements (for the period of the four
--- -----
consecutive fiscal quarters ended on the last day of the last fiscal quarter
for which financial statements have therefore been delivered to the Banks
pursuant to Section 9.01(b), showing that, if pro forma effect were given to
--- -----
the Permitted Acquisition on the first day of said period, the Company would
have been in compliance with Sections 10.09, 10.10 and 10.11 at all relevant
test times during said period and (z) with respect to each Permitted
Acquisition, (A) no Default or Event of Default shall be in existence at the
time of the consummation of such Permitted Acquisition or shall exist
immediately after giving effect thereto, (B) the Company shall have given the
Agent and the Banks at least 30 days prior notice of any Permitted
Acquisition (each such notice, a "Permitted Acquisition Notice"), which
notice shall contain (I) the date such Permitted Acquisition is scheduled to
be consummated, (II) the estimated purchase price of such Permitted
Acquisition, (III) a description of the stock and/or assets to be acquired in
connection with such Permitted Acquisition, (IV) the sources of cash to be
paid in respect of such Permitted Acquisition and (V) in the case of common
stock of the Company issued as consideration to the seller in connection with
a Permitted Acquisition, a description of the common stock to be issued in
connection with the consummation of such Permitted Acquisition and the
estimated fair market value thereof, (C) such Permitted Acquisition shall not
violate any term or provisions of this Agreement, and (D) the Company shall
have certified to the
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<PAGE>
Administrative Agent and the Banks, and the Agent and the Required Banks
shall have been satisfied in their reasonable discretion, that the proposed
Permitted Acquisition is not reasonably likely to result in material
increased tax, ERISA or environmental liabilities on the Company or on the
Company and its Subsidiaries taken as a whole; provided that, so long as the
Permitted Acquisition Notice has been given as required above and so long as
the Company has furnished to each Bank which has requested information as to
the liabilities of the type described in this clause (D) all information so
requested, if any Bank has not notified the Company or the Administrative
Agent on or prior to the 10th day prior to the consummation of a Permitted
Acquisition that such Bank has not yet been satisfied that the proposed
Permitted Acquisition would not be reasonably likely to result in material
increased tax, ERISA or environmental liabilities on the Company or on the
Company and its Subsidiaries taken as a whole, then such Bank shall be deemed
for purposes of preceding clause (D) to be so satisfied. The consummation of
each Permitted Acquisition shall be deemed to be a representation and
warranty by the Company that all conditions thereto have been satisfied and
that same is permitted in accordance with the terms of this Agreement, which
representation and warranty shall be deemed to be a representation and
warranty for all purposes hereunder, including, without limitation, Sections
8 and 11./4/
(b) The Schuylkill Acquisition may be effected in accordance with
Section I(2) of the Eighth Amendment and the description thereof contained in
Annex II to the Eighth Amendment, provided that (w) prior to the consummation
of the Schuylkill Acquisition, the Banks shall have received a report
prepared by Pilko & Associates with respect to the environmental issues and
liabilities relating to the Schuylkill Acquisition, the results of which must
be in form and substance satisfactory to the Agents and the Required Banks,
(x) at the time of the consummation of the Schuylkill Acquisition and
immediately after giving effect thereto, no Default or Event of Default shall
be in existence, (y) the Total Unutilized Revolving Loan Commitment,
immediately after giving effect to the Schuylkill Acquisition and after the
making of the cash payments to be made in connection therewith as described
in clauses (x) and (y) of the fourth sentence of Section I(2) of the Eighth
Amendment, shall equal or exceed $15,000,000 and (z) the Schuylkill
Acquisition must be effected in accordance with the requirements of Section
9.15(a) above and the definition of Permitted Acquisition contained herein,
in each case except to the extent otherwise expressly provided below:
(i) the Schuylkill Acquisition Assumed Liabilities may be issued
or assumed, as the case may be, by the Company as partial consideration
in the Schuylkill Acquisition and, except as provided in clauses (ii),
(iii), (iv) and (v) below, shall not be counted as Acquired Indebtedness
or otherwise counted in
____________________
/4/ Pursuant to the Fourth Amendment, the CEAc Acquisition shall not constitute
a Permitted Acquisition and, accordingly, shall not be subject to the provisions
of Section 9.15.
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<PAGE>
determining compliance with the dollar limitations contained in said
Section 9.15(a) or the definition of Permitted Acquisition;
(ii) the aggregate amount of Engitec Equipment Commitments and
Schuylkill Assumed Guaranty and L/C Obligations shall, subject to the
provisions of following clause (v), be treated as Acquired Indebtedness
incurred in connection with the Schuylkill Acquisition for purposes of
determining compliance with Section 9.15(a) and the definition of
Permitted Acquisition;
(iii) at the time any cash payments are made in respect of the
Schuylkill Assumed Tax Liability and/or the Schuylkill Make Whole
Obligations, such cash payments shall reduce the "$50,000,000" aggregate
limitation contained in Section 9.15(a)(x), but only on a prospective
basis from the date of the making of such cash payment (so that any
Permitted Acquisitions previously made in accordance with the
requirements of said Section 9.15 shall not be deemed to violate same as
a result of such subsequent cash payments);
(iv) at the time any Permitted Acquisition (other than the
Schuylkill Acquisition) is to be made, the projected liability on the
Contingent Lead Note shall be calculated, based upon the average lead
prices which have prevailed from the closing date of the Schuylkill
Acquisition through the date of determination, and the projected amount
which will be payable with respect to the Contingent Lead Note
(including projected interest thereon) which is estimated to be payable
based upon such average lead prices shall be deemed to reduce the
"$50,000,000" aggregate limitation contained in Section 9.15(a)(x) for
purposes of calculating whether the respective Permitted Acquisition may
be made; and
(v) if the Schuylkill Acquisition is effected on or prior to the
last day of the Company's fiscal year ended in March, 1996, the cash
consideration paid in connection therewith shall count toward the
limitations contained in Section 9.15(a)(v), but the non-cash
consideration paid in connection therewith shall not be included in
determining compliance with the $10,000,000 limitation contained in said
Section 9.15(a)(v); provided that if the Schuylkill Acquisition is
effected on or prior to the last day of the Company's fiscal year ended
in March, 1996, then the "$50,000,000" aggregate limitation contained
in Section 9.15(a)(x) shall be reduced by the sum of (x) the value (for
this purpose, valued at $45 per share, regardless of the actual trading
prices of the Company's common stock at the time of issuance) of all
common stock issued by the Company as consideration in connection with
the Schuylkill Acquisition and (y) the amount of Acquired Indebtedness
incurred or deemed incurred in connection therewith (including as
described in clause (ii) above.
9.16 Tender Offers. At the time of consummation of either Tender
-------------
Offer, such Tender Offer will be consummated in all material respects in
accordance with the
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terms of the Documents relating to such Tender Offer and all applicable laws.
At the time of consummation of the respective Tender Offer, all consents and
approvals of, and filings and registrations with, and all other actions in
respect of, all governmental agencies, authorities or instrumentalities
required in order to make or consummate such Tender Offer will have been
obtained, given, filed or taken and will be in full force and effect (or
effective judicial relief with respect thereto shall have been obtained) and all
applicable waiting periods with respect thereto shall have expired without
any action being taken by any competent authority which restrains, prevents,
or imposes material adverse conditions upon such Tender Offer. Additionally,
at the time of the consummation of the respective Tender Offer there will not
exist any judgment, order or injunction prohibiting or imposing material
adverse conditions upon such Tender Offer, or the occurrence of any Credit
Event or the performance by the Company of its obligations under the
Documents relating to such Tender Offer. All actions taken by the Company
pursuant to or in furtherance of each Tender Offer will be taken in material
compliance with the Documents relating to such Tender Offer and all
applicable laws. At the time of their dissemination to the public,
respective Offer to Purchase and any amendments or supplements thereto and
all documents required to be filed by the Company or any of its Subsidiaries,
pursuant to the Securities Exchange Act of 1934, as amended, or with the
CNMV, copies of which documents shall be promptly delivered to each Bank
(other than exhibits to such filings, which will be made available to each
Bank upon request therefor), will not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make
the statements therein, in light of the circumstances under which made, not
misleading.
9.17 Treasury Stock Repurchase. Within the Call Option Period
-------------------------
under, and as defined in, the Purchase Agreement, and in any event within 45
Business Days after the Initial Tender Offer Date, the Company shall cause
Tudor to purchase the Option Shares pursuant to the Call Option provided in
the Purchase Agreement, all in accordance with the terms thereof. In
effecting any such purchase, Tudor shall use its own funds and shall make the
purchase in a manner so that there is, and shall be, no drawing under the
Treasury Stock Letter of Credit.
9.18 Termination of Tender Offers. (a) If the Initial Tender
----------------------------
Offer is not consummated on or before December 31, 1994, the Company shall
cause the Initial Tender Offer to be withdrawn, cancelled or declared void,
in each case within the meaning provided in the Initial Tender Offer Credit
Support, and shall cause the Initial Tender Offer Credit Support to be
terminated in accordance with its terms at such time.
(b) If the Secondary Tender Offer is not consummated on or before
the 90th day after the Secondary Tender Offer Filing Date, the Company shall
cause the Secondary Tender Offer to be withdrawn, cancelled or declared void,
in each case within the meaning provided in the Secondary Tender Offer Credit
Support, and shall cause the Secondary Tender Offer Credit Support to be
terminated in accordance with its terms at such time.
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<PAGE>
9.19 Ownership of Subsidiaries. (a) With respect to each
-------------------------
Subsidiary of the Company (other than CEAc US Holdco, CEAc Acquisition Corp.
and their respective Subsidiaries), the Company (directly or indirectly)
shall at all times own at least that percentage of the outstanding capital
stock of such Subsidiary as is shown as being owned (directly or indirectly)
by the Company in Schedule IV hereto.
(b) At all times after the Initial Tender Offer Date, Tudor shall
be required to own (directly or indirectly) at least that percentage of the
outstanding capital stock of each of its Subsidiaries which was owned by
Tudor and its Subsidiaries on the Initial Tender Offer Date, in each case
unless the respective Subsidiary is merged, liquidated or otherwise
transferred or sold in a transaction permitted pursuant to Section 10.02.
(c) At all times after the CEAc Acquisition Date, CEAc shall be
required to own (directly or indirectly) at least that percentage of the
outstanding capital stock of each of its Subsidiaries which was owned by CEAc
on the CEAc Acquisition Date, in each case unless the respective Subsidiary
is merged, liquidated or otherwise transferred or sold in a transaction
permitted pursuant to Section 10.02.
(d) After the Tenth Amendment Effective Date, (x) CEAc US Holdco
shall at all times be required to be a direct Wholly-Owned Subsidiary of the
Company in accordance with the definition thereof, (y) the Company shall at
all times be required to directly own at least 99% of capital stock of CEAc
Acquisition Corp., and (z) the Company shall at all times be required to
indirectly own, through CEAc Acquisition Corp. and its Subsidiaries and CEAc
US Holdco, (i) at least 99.7% of the outstanding capital stock of CEAc, (ii)
at least 90.6% of the outstanding capital stock of Tudor and (iii) 100% of
the outstanding capital stock of Euro Exide. At all times, each of CEAc US
Holdco and CEAc Acquisition Corp. shall be operated as special purpose
holding companies with (x) CEAc US Holdco having no significant assets or
liabilities other than its ownership interest (not to exceed 1%) in capital
stock of CEAc Acquisition Corp. and any promissory notes payable to it from
time to time by CEAc Acquisition Corp. and Schuylkill Metals Corporation and
any liabilities permitted pursuant to the terms of this Agreement and (y)
CEAc Acquisition Corp. having no (I) significant assets, other than its
ownership of capital stock of, and promissory notes payable to it by, CEAc,
Tudor and Euro Exide, its beneficial ownership of 100% of the capital stock
of Exide France and its ownership of capital stock of, and promissory notes
payable to it by, any direct or indirect Subsidiary acquired by CEAc
Acquisition Corp., or (II) liabilities, other than as permitted by this
Agreement or the Exide European Refinancing Facility Agreement. At all
times, Exide France shall be operated as a special purpose holding company
having no significant assets, other than its ownership of capital stock of,
and promissory notes payable to it by, any Subsidiary of CEAc Acquisition
Corp. acquired by Exide France, or liabilities, other than as permitted by
this Agreement or the Exide European Refinancing Facility Agreement.
(e) Notwithstanding anything to the contrary contained herein, the
provisions of this Section 9.19 shall not be violated by reason of any
dissolution or liquidation of a Subsidiary in compliance with the
requirements of Section 9.04(ii) or any merger,
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transfer, dissolution or liquidation of a Subsidiary in compliance with the
relevant provisions of Section 10.02.
9.20 New Domestic Wholly-Owned Subsidiaries. To the extent the
--------------------------------------
Company creates or acquires any Domestic Wholly-Owned Subsidiary after the
Effective Date in accordance with the other provisions of this Agreement
(whether as a result of a Permitted Acquisition, a Permitted Sales Branch
Acquisition or otherwise), each such Domestic Wholly-Owned Subsidiary shall
be required to become a party to the Domestic Subsidiaries Guaranty by
executing a counterpart thereof or enter into an amendment thereto
satisfactory to the Administrative Agent and, if requested by the
Administrative Agent or the Required Banks, shall be required to enter into
the Security Documents entered into by the entities which were Domestic
Subsidiary Guarantors on the Initial Borrowing Date, in each case by entering
into counterparts thereof or amendments thereto, in form and substance
satisfactory to the to the extent requested by the Administrative Agent or
the Collateral Agent, Administrative Agent and the Collateral Agent. In
connection with the foregoing, to the extent requested by the Administrative
Agent or the Collateral Agent, the Company shall be required to cause to be
delivered such relevant documentation (including opinions of counsel) of the
type described in Section 5 as the respective Subsidiary would have had
delivered if it were a Credit Party on the Initial Borrowing Date.
Notwithstanding anything to the contrary contained above, the actions
otherwise required by this Section 9.20 shall only be required to be taken to
the extent requested by the Agents or the Required Banks.
SECTION 10. Negative Covenants. The Company covenants and agrees,
------------------
and the Company shall cause each of its Subsidiaries to covenant and agree,
that on and after the Effective Date and until the Total Commitments and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other Obligations (then due and payable
in the case of such other Obligations) incurred hereunder and thereunder, are
paid in full:
10.01 Liens. The Company will not, and will not permit any of its
-----
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of the Company or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to
the Company or any of its Subsidiaries), or assign any right to receive
income or permit the filing of any financing statement under the UCC or any
other similar notice of Lien under any similar recording or notice statute;
provided that the provisions of this Section 10.01 shall not prevent the
- --------
creation, incurrence, assumption or existence of the following (Liens
described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due and payable or Liens for taxes,
assessments or governmental
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charges or levies being contested in good faith and by appropriate
proceedings for which adequate reserves have been established in
accordance with US GAAP (or the equivalent thereof in any country in
which a Foreign Subsidiary is doing business, as applicable);
(ii) Liens in respect of property or assets of the Company or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers', warehousemen's, materialmen's and mechanics'
liens and other similar Liens arising in the ordinary course of
business, and (x) which do not in the aggregate materially detract from
the value of the Company's or such Subsidiary's property or assets or
materially impair the use thereof in the operation of the business of
the Company or such Subsidiary or (y) which are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens in existence (x) on the Effective Date which are
listed, and the property subject thereto described, in Schedule IX and
(y) on the CEAc Acquisition Date on the property and assets of CEAc and
its Subsidiaries which are listed, and the property subject thereto
described, in Schedule XIX (Liens referred to in this clause (iii) are
herein referred to as "Existing Liens"), but only to the respective
date, if any, set forth in such Schedule IX or Schedule XIX, as the case
may be, for the removal and termination of any such Liens;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) Liens upon assets subject to Capitalized Lease Obligations
to the extent permitted by Section 10.05(ix), provided that such Liens
--------
only serve to secure the payment of Indebtedness arising under such
Capitalized Lease Obligation;
(vii) Liens placed upon equipment or machinery used in the
ordinary course of business of the Company or any of its Subsidiaries at
the time of acquisition thereof by the Company or any such Subsidiary or
within 120 days thereafter to secure Indebtedness incurred to pay all or
a portion of the purchase price thereof provided that (x) the aggregate
--------
outstanding principal amount of all Indebtedness secured by Liens
permitted by this clause (vii) shall not at any time exceed $3,000,000
(except to the extent the Indebtedness is incurred to finance purchases
of equipment subject to the Engitec Equipment Commitments, provided that
the aggregate principal amount of Indebtedness incurred pursuant to this
parenthetical shall not exceed $10,000,000) and (y) in all events, the
Lien encumbering the equipment or machinery so acquired does not
encumber any other asset of the Company or such Subsidiary;
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(viii) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now or
hereafter in existence, not securing Indebtedness and not materially
interfering with the conduct of the business of the Company or any of
its Subsidiaries;
(ix) Liens arising from precautionary UCC financing statement
filings regarding operating leases entered into by the Company or any of
its Subsidiaries in the ordinary course of business;
(x) Liens on accounts receivable and proceeds thereof, in each
case so long as (x) said accounts receivable are sold pursuant to the
Receivables Facility in accordance with the requirements of Section
10.02(vi) and (y) the amount of Receivables Facility Attributed
Indebtedness at such time shall not exceed the Receivables Maximum
Commitment Amount;
(xi) Liens securing Indebtedness permitted pursuant to Section
10.05(iv), (vi), (xviii) or (xix), so long as such Liens are limited to
the assets permitted to serve as security for such Indebtedness in
accordance with the provisions of said Section 10.05(iv), (vi), (xviii)
or (xix), as the case may be;
(xii) Liens (other than any Lien imposed by ERISA) (x) incurred
or deposits made in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, (y) to secure the performance of tenders, statutory
obligations (other than excise taxes), surety, stay, customs and appeal
bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed money)
or (z) deposits made in the ordinary course of business to secure
liability for premiums to insurance carriers, provided that the
--------
aggregate amount of deposits at any time pursuant to sub-clause (y) and
sub-clause (z) shall not exceed $5,000,000 in the aggregate;
(xiii) Liens securing Acquired Indebtedness shall be permitted
so long as such Liens existed prior to, and were not created in
contemplation of, the respective Permitted Acquisition, and so long as
the Liens apply only to the properties or assets so acquired pursuant to
the respective Permitted Acquisition;
(xiv) Liens on cash and Cash Equivalents of the Company created
prior to the Effective Date and securing the BIG Notes shall be
permitted to remain in existence until the BIG Notes are repaid in full,
so long as no additional assets or property are pledged as security
therefor after the Effective Date (although earnings on funds deposited
prior to the Effective Date shall be permitted to be retained as
security) (with the amount of cash collateral for the BIG Notes as at
June 30, 1994
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being (Pounds)22,186,416) (with such collateral being herein called the
"BIG Notes Cash Collateral");
(xv) Liens (x) which may exist as a result of the transactions
described in Section 10.02(xii) shall be permitted and (y) on the CEAc
Acquisition Intercompany Notes granted by CEAc US Holdco securing
Indebtedness permitted pursuant to Section 10.05(xviii) or (xix) shall
be permitted;
(xvi) Until the consummation of the CEAc Acquisition or the
earlier repayment of the 2005 Senior Unsecured Notes, the 2005 Senior
Unsecured Notes may be secured by the amounts deposited (and maintained
as cash and Cash Equivalents) in the 2005 Escrow Account;
(xvii) (A) prior to the date which is 40 days after the Exide
European Restructuring Date, the Company may pledge the capital stock of
Euro Exide and Tudor to secure Indebtedness evidenced by the Exide
European Refinancing Facility Agreement and (B) any Person which is CEAc
Acquisition Corp. or a Subsidiary of CEAc Acquisition Corp. may create,
incur, assume or suffer to exist Liens on assets of the respective such
Person securing its Indebtedness which is permitted to be incurred by
such Person under this Agreement; and
(xviii) in connection with the Schuylkill Acquisition, the escrow
arrangements described in Annex II to the Eighth Amendment shall be
permitted, so long as such escrow arrangements apply only to shares of the
capital stock of Exide which is, or may be, issued as partial consideration
in connection with the Schuylkill Acquisition.
10.02 Consolidation, Merger, Purchase or Sale of Assets, etc. The
-------------------------------------------------------
Company will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets, or enter into any sale-leaseback transactions, or purchase or
otherwise acquire (in one or a series of related transactions) any part of
the property or assets (other than purchases or other acquisitions of
inventory, materials, equipment and intangible assets in the ordinary course
of business) of any Person, except that:
(i) Capital Expenditures by the Company and its Subsidiaries
shall be permitted to the extent not in violation of Section 10.08;
(ii) (A) each of the Company and its Subsidiaries (other than
CEAc Acquisition Corp. and its Subsidiaries) may, in the ordinary course
of business, (x) sell, lease or otherwise dispose of any assets which,
in the reasonable judgment of such Person, have become obsolete or worn
out, provided that each such sale, lease
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or other disposition shall be for fair market value and at least 75% of
the consideration therefor shall be in the form of cash and, provided,
further, that the aggregate Net Sale Proceeds of any sale permitted
pursuant to this clause (x) shall not exceed $50,000 and (y) sell, lease
or otherwise dispose of any assets, provided that each such sale or
disposition shall be for fair market value and at least 75% of the
consideration therefor shall be in the form of cash and, provided,
further, that the aggregate Net Sale Proceeds of all assets subject to
sale, lease or other dispositions pursuant to this clause (y) shall not
exceed $5,000,000 in the aggregate in any fiscal year of the Company and
(B) each of CEAc Acquisition Corp. and its Subsidiaries may sell, lease
or dispose of any assets, provided that each such sale, lease or other
disposition shall be in compliance with the terms and conditions
contained in the Exide European Refinancing Facility Agreement as said
Exide European Refinancing Facility Agreement is originally in effect
without giving effect to any subsequent amendments, modifications or
waivers with respect thereto;
(iii) Investments may be made to the extent permitted by
Section 10.06;
(iv) each of the Company and its Subsidiaries may lease (as
lessee) real or personal property in the ordinary course of business;
(v) each of the Company and its Subsidiaries may make sales or
transfers of inventory in the ordinary course of business and consistent
with past practices;
(vi) the Company and its Subsidiaries may sell accounts
receivable pursuant to the Receivables Facility, so long as the amount
of Receivables Facility Attributed Indebtedness shall at no time
outstanding exceed the Receivables Maximum Commitment Amount;
(vii) purchases of Tudor Shares and Tudor Convertible Bonds
shall be permitted to be made by the Company pursuant to the terms of
the Initial Offer to Purchase or Secondary Offer to Purchase, in each
case in accordance with the requirements of this Agreement, and the
Treasury Stock Repurchase may be effected by Tudor in accordance with
the requirements of this Agreement;
(viii) the Company may effect Permitted Acquisitions in
accordance with the requirements of Section 9.15;
(ix) so long as no Default or Event of Default then exists, the
Company may acquire sales branches (or 100% of the capital stock of any
corporation substantially all of whose assets will constitute a sales
branch) so long as (x) the aggregate amount of expenditures for such
acquisitions ("Permitted Sales Branch Acquisitions") do not exceed
$3,000,000 in any fiscal year of the Company and (y) in the case of
Permitted Sales Branch Acquisitions made after the Effective Date and
prior to March 31, 1996, the aggregate amount of the consideration paid
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therefor, when added to the amount of consideration paid for Permitted
Acquisitions during the relevant period, does not exceed the amount
permitted to be paid pursuant to Section 9.15(u) or (v), as the case may
be;
(x) the Company may, pursuant to a bankruptcy plan finally
approved by the respective bankruptcy court, acquire assets of Evanite,
so long as no consideration (other than (i) the conversion of
Indebtedness of Evanite currently held by the Company, (ii) the
assumption by the Company of accounts payable and accrued expenses of
Evanite in an amount not to exceed $1,000,000 and (iii) the assumption
by the Company of certain pre-petition tax obligations of Evanite in an
amount not to exceed $200,000) is required to be paid to obtain such
assets; provided that in no event (and notwithstanding any other
--------
contrary provision of this Agreement) shall the Company or any of its
Subsidiaries acquire Evanite's facilities located in Corvallis,
Oregon;/5/
(xi) a Subsidiary of Euro Exide may acquire, for consideration
consisting of not more than a 20% ownership interest in the entity
acquiring said assets (and with no other consideration to be payable in
connection therewith), intangible assets and/or personal property (but
not Real Estate or fixtures) of Gemala, provided that (and
notwithstanding any other provision of this Agreement) the Company shall
not acquire any Real Property owned or leased by Gemala without the
prior written consent of the Required Banks;
(xii) within 30 days before the last day of any fiscal year of
the Company, so long as no Default or Event of Default then exists, the
Company may sell receivables with an aggregate face amount and/or
inventory with a fair market value not exceeding $100,000,000 in the
aggregate to General Battery Corporation (so long as General Battery
Corporation is a Wholly-Owned Subsidiary of the Company) so long as (a)
the purchase price is paid through the issuance by General Battery
Corporation to the Company of an intercompany promissory note in the
form of Exhibit N which is pledged pursuant to the Pledge Agreement and
(b) any cash collections made on the respective receivables or inventory
(or receivables received in connection with the sale of the inventory)
so sold are used to pay interest or principal on said intercompany note;
(xiii) the CEAc Acquisition may be effected so long as all
conditions precedent contained in Section 6A are met at the time such
acquisition is effected and the CEAc Acquisition Date occurs
simultaneously therewith;
____________________
/5/ The Company was permitted to purchase the Corvallis, Oregon facilities
pursuant to the Consent and Waiver, dated as of February 21, 1995.
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<PAGE>
(xiv) CEAc Acquisition Corp. and its Subsidiaries may sell
accounts receivable to the extent expressly permitted by, and subject
to the limitations contained in, the Exide European Refinancing Facility
Agreement, as the same is originally in effect without giving effect to
any subsequent amendments, modifications or waivers with respect
thereto, in each case so long as all proceeds thereof are applied as
required by the Exide European Refinancing Facility Agreement as said
European Refinancing Facility Agreement is originally in effect without
giving effect to any subsequent amendments, modifications or waivers
with respect thereto;
(xv) the CEAc Restructuring may be effected in accordance with
the requirements of Section I(1) of the Eighth Amendment and in
accordance with Annex I attached to the Eighth Amendment;
(xvi) (A) in connection with the Schuylkill Acquisition
(which may be effected in accordance with the requirements of Section
9.15), the Company may form a new Wholly-Owned Subsidiary which may be
merged with or into SHI to effect the Schuylkill Acquisition and (B) the
entity surviving the merger referred to in the preceding clause (A) may
be merged into the Company;
(xvii) the Exide European Restructuring may be effected in
accordance with the requirements of Section I of the Ninth Amendment and
in accordance with Annex I attached to the Ninth Amendment;
(xviii) any Subsidiary of CEAc Acquisition Corp. may be merged
with or into, or be dissolved or liquidated into, or sell or otherwise
transfer any of its assets to, CEAc Acquisition Corp. or any Subsidiary
of CEAc Acquisition Corp.; and
(xix) the Second Exide European Restructuring may be effected
in accordance with the requirements of Section I of the Tenth Amendment
and in accordance with Annex I attached to the Tenth Amendment.
To the extent the Required Banks waive the provisions of this Section 10.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 10.02, such Collateral (unless sold to the Company
or a Domestic Wholly-Owned Subsidiary of the Company) shall be sold free and
clear of the Liens created by the Security Documents, and the Administrative
Agent and Collateral Agent shall be authorized to take any actions deemed
appropriate in order to effect the foregoing.
10.03 Dividends. The Company shall not, and shall not permit any
---------
of its Subsidiaries to, authorize, declare or pay any Dividends with respect
to the Company or any of its Subsidiaries, except that:
(i) any Subsidiary of the Company (x) may pay Dividends to the
Company or any Wholly-Owned Subsidiary of the Company and (y) if such
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Subsidiary is not a Wholly-Owned Subsidiary, pay Dividends to its
shareholders generally, so long as the Company or its respective Subsidiary
which owns the equity interest or interests in the Subsidiary paying the
Dividends receives at least its proportionate share thereof (based upon its
relative holdings of capital stock in the Subsidiary paying such
Dividends);
(ii) Tudor may (x) effect the Treasury Stock repurchase in
accordance with the requirements of the Purchase Agreement, and (y) so long
as no Default or Event of Default then exists, (i) after the Initial Tender
Offer Date, purchase Tudor Shares and Tudor Convertible Bonds from time to
time at prices which are not in excess of those previously offered pursuant
to the Initial Tender Offer and (ii) after the Initial Tender Offer Date,
effect a reverse stock split or take such other action which requires that
payments be made to holders of Tudor Shares (other than the Company and its
Subsidiaries) to liquidate their positions in Tudor, so long as the
consideration payable by Tudor to eliminate any Tudor Shares or Tudor
Convertible Bonds or fractional interests would not exceed the amount
required to be paid therefor pursuant to the Initial Tender Offer;
(iii) the Company may repurchase the Company Common Stock and/or
options to purchase the Company Common Stock held by directors, executive
officers, members of management or employees of the Company or any of its
Subsidiaries upon the death, disability, retirement or termination of such
director, executive officers, member of management or employee, so long as
(x) no Default or Event of Default then exists or would exist after giving
effect thereto and (y) the aggregate amount of cash expended by the Company
pursuant to this clause (ii) in any fiscal year shall not exceed $500,000;
provided that, in addition to amounts available pursuant to preceding
clause (y) (but subject to the requirements of preceding clause (x)), the
Company may make additional cash purchases in respect of the Company Common
Stock and/or options to purchase the Company Common Stock previously held
by any Person listed above, after the death of such Person, with proceeds
of key-man life insurance maintained by the Company on such Person;
(iv) so long as no Default or Event of Default then exists or would
exist after giving effect thereto, the Company may pay regular quarterly
dividends on its outstanding shares of comon stock, so long as the
aggregate amount of dividends paid pursuant to this clause (iv) does not
exceed $2,000,000 in any fiscal year of the Company;
(v) so long as no Default or Event of Default then exists or would
exist after giving effect thereto, the Company may pay additional Dividends
in an aggregate amount not to exceed $5,000,000 in any fiscal year of the
Company, in each case so long as, at the time the respective Dividend is
paid, the amount thereof
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does not exceed the Company Retained Excess Cash Flow Amount as in effect
immediately before the payment of such Dividend; and
(vi) so long as no Default or Event of Default then exists or would
exist after giving effect thereto, the Company may redeem rights granted to
the shareholders of the Company pursuant to the Shareholder Rights Plan for
a nominal amount.
10.04 Business. (a) The Company will not permit (x) CEAc US Holdco
--------
to engage in any business activities other than those permitted by Section 9.19,
(y) CEAc Acquisition Corp. to engage in any business activities other than those
permitted by Section 9.19, or (z) Exide France to engage in any business
activities other than those permitted by Section 9.19.
(b) The Company will not, and will not permit any of its Subsidiaries
(including CEAc and its Subsidiaries) to, engage (directly or indirectly) in any
business other than the businesses in which the Company and its Subsidiaries
(including CEAc and its Subsidiaries) are engaged on the Fourth Amendment
Effective Date and any other reasonably related businesses.
10.05 Indebtedness. The Company will not, and will not permit any
------------
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Indebtedness which may be deemed to exist pursuant to the
Receivables Facility, so long as the Receivables Facility Attributed
Indebtedness at no time exceeds the Receivables Maximum Commitment Amount
as then in effect;
(iii) Existing Indebtedness (excluding any such Existing
Indebtedness described under items 3, 8, 9, 10, 11, 12, 13, 14 and 17 of
Part I of Schedule VI, which shall only be permitted in accordance with,
and to the extent in compliance with, the requirements of preceding
clause (ii) or following clause (iv)) shall be permitted to the extent
the same is listed in Part I of Schedule VI, but no refinancings or
renewals thereof, provided that the Existing Indebtedness evidenced by
--------
(x) the Senior Notes shall not exceed $150,000,000 (as reduced by any
repayments of principal thereof after the Effective Date) in aggregate
principal amount at any time outstanding and (y) Senior Subordinated
Notes shall not exceed $110,000,000 (as reduced by any repayments of
principal thereof after the Effective Date) in aggregate principal
amount at any time outstanding (it being understood that, as of June 30,
1994, the accredit amount of said Senior Subordinated Notes was
approximately $73,000,000), provided further, that the Existing
-------- -------
Indebtedness described under item 7 of Part I of Schedule VI shall be
refinanced pursuant to the
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Exide European Refinancing Facility and shall not be permitted to remain
outstanding after the Exide European Restructuring Date;
(iv) Exide Canada and its Subsidiaries and any Majority
Subsidiary may incur Indebtedness for their respective working capital
purposes from time to time pursuant to one or more revolving credit or
similar agreements of such Person, provided that (x) the aggregate
principal amount of such Indebtedness at any time outstanding pursuant
to this clause (iv) shall not exceed Cdn.$20,000,000, in the case of
Exide Canada and its Subsidiaries, and the Dollar Equivalent of
$5,000,000, in the case of Majority Subsidiaries, (y) such Indebtedness
may be secured, but only with the assets of Exide Canada and its
Subsidiaries, or such Majority Subsidiary, as the case may be, and (z)
no Person other than Exide Canada and its Subsidiaries, or such Majority
Subsidiary, as the case may be, shall have guaranteed or be contingently
liable for the repayment of such Indebtedness;
(v) Existing Indebtedness of Tudor and its Subsidiaries listed
in Part II of Schedule VI (except that, from and after the Exide
European Restructuring Date, none of the Banesto Debt or Tudor
Convertible Bonds (except to the extent held by the Company and its
Subsidiaries) or any other Indebtedness being refinanced pursuant to the
Exide European Refinancing Facility shall be included as Existing
Indebtedness permitted to be outstanding pursuant to this clause (v) or
refinanced pursuant to succeeding clause (vi)) but no refinancings or
renewals thereof except in compliance with Section 10.05(vi) below;
(vi) Existing Indebtedness of Tudor and its Subsidiaries as
described in preceding clause (v) shall be permitted to be refinanced or
successively refinanced by Tudor and its Subsidiaries, provided that (a)
the aggregate principal amount of the outstanding Indebtedness of Tudor
and its Subsidiaries is not increased as a result thereof, (b) the
aggregate principal amount of Indebtedness permitted to remain
outstanding pursuant to this clause (vi) shall be reduced by the amount
of any permanent repayments and/or prepayments of the principal thereof
made as required by Section 4.02(i), (c) if such Indebtedness is to be
secured, only assets of Tudor and its Subsidiaries shall serve as
security therefor, and the granting of such security shall not violate
the terms of any Indebtedness of the Company and its Subsidiaries which
is to remain outstanding after giving effect thereto (and shall
specifically be required to comply with the provisions of Section 4.8 of
the Senior Note Indenture and Senior Subordinated Note Indenture), (d)
the respective issue of refinancing Indebtedness shall have no
restrictions (x) which would violate the provisions of Section 4.5 of
the Senior Note Indenture or Senior Subordinated Note Indenture or (y)
which would violate any terms of any other Indebtedness of the Company
and its Subsidiaries which is to remain outstanding;
(vii) Indebtedness of CEAc Acquisition Corp. and its
Subsidiaries under Interest Rate Agreements (as defined in the Exide
European Refinancing Facility
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Agreement) entered into under and in compliance with Section 13.2.21 of
the Exide European Refinancing Facility Agreement;
(viii) Indebtedness under (A) Interest Rate Protection or Other
Hedging Agreements (x) in effect on the Eleventh Amendment Effective Date
or (y) existing as a result of Investments permitted pursuant to Section
10.06(xiv) and (B) non-speculative Interest Rate Protection Agreements
entered into after the Eleventh Amendment Effective Date, provided that the
notional amount of Indebtedness subject to this clause (B) shall not exceed
$50,000,000 at any time;
(ix) Indebtedness of CEAc Acquisition Corp. and its Subsidiaries
under Interest Rate Agreements (as defined in the Exide European
Refinancing Facility Agreement) entered into and compliance with Section
13.2.21 of the Exide European Refinancing Facility Agreement;
(x) Indebtedness under Interest Rate Protection or Other Hedging
Agreements in effect on the Eleventh Amendment Effective Date, or
existing as a result of Investments permitted pursuant to Section
10.06(xiv);
(xi) Indebtedness evidenced by Capitalized Lease Obligations not to
exceed $10,000,000 in the aggregate outstanding at any one time;
(xii) Indebtedness subject to Liens permitted under Section
10.01(vii);
(xiii) intercompany Indebtedness among (x) the Company and its
Subsidi aries to extent permitted by Section 10.06(vi) through (ix) and
Section 10.06(xv) and (y) CEAc Acquisition Corp. and its Subsidiaries to
extent permitted by Section 10.06(xvii);
(xiv) Indebtedness of any Wholly-Owned Subsidiary to the Company or
another Wholly-Owned Subsidiary constituting the purchase price in respect
of intercompany transfers of goods made in the ordinary course of business
to the extent not constituting Indebtedness for borrowed money;
(xv) letters of credit issued pursuant to the Existing Chemical
Credit Agreement may remain outstanding so long as supported by Letters of
Credit issued pursuant to this Agreement;
(xvi) Acquired Indebtedness may be assumed or continued after March
31, 1996 by a Subsidiary of the Company acquired pursuant to, or created to
effect, a Permitted Acquisition, so long as the aggregate principal amount
of all Acquired Indebtedness incurred or assumed pursuant to this Agreement
does not exceed $15,000,000;
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(xvii) additional unsecured Indebtedness of the Company and its
Subsidiaries not to exceed $5,000,000 in aggregate principal amount
outstanding at any time;
(xviii) Indebtedness of the Company evidenced by the 2005 Senior
Unsecured Notes in an aggregate principal amount not to exceed
$300,000,000, so long as (x) on the date of the incurrence of such
Indebtedness, the Agents and the Banks shall have received (I) the
certificate last required to be delivered pursuant to Section 9.01(m),
together with accountants' certificates of the type described in Section
6A.13(iv), in each case in form and substance satisfactory to the Agents
and the Required Banks and addressed to the Banks, supporting the opinion
that the 2005 Senior Unsecured Notes may be incurred without causing any
violation of the Senior Note Indenture or the Senior Subordinated Note
Indenture and (II) a legal opinion from Kirkland & Ellis, in form and
substance satisfactory to the Agents and the Required Banks and addressed
to the Banks, to the effect that (A) each Credit Event under this
Agreement, as amended through and including the date of the delivery of
such opinion, may occur without causing any violation of the Senior Note
Indenture, the Senior Subordinated Note Indenture or the 2005 Senior
Unsecured Note Indenture, (B) neither the execution, delivery nor
performance by the Company or any of its Subsidiaries of this Agreement and
the other Credit Documents, as this Agreement and such other Credit
Documents have been amended through and including the date of the delivery
of such opinion, will cause a violation under the Senior Note Indenture,
the Senior Subordinated Note Indenture or the 2005 Senior Unsecured Note
Indenture (except, in each case, such opinion need not cover Credit Events
the result of which will cause the outstanding principal amount of
Revolving Loans and Swingline Loans to exceed $255,000,000 in which case
the occurrence of such Credit Event will be required to comply with the
coverage ratio referred to in the Indentures), and (C) neither the
incurrence of the 2005 Senior Unsecured Notes nor the execution, delivery
and performance by the Company of the 2005 Senior Unsecured Note Indenture
and the other 2005 Senior Unsecured Note Documents will cause a violation
of the Senior Note Indenture or the Senior Subordinated Note Indenture and
(y) on the date of the receipt thereof, $219,937,500 of the proceeds plus
proceeds in an amount equal to the Net Cash Proceeds of that principal
amount of 2005 Senior Unsecured Notes issued pursuant to the 2005 Senior
Unsecured Notes Issuance to the extent in excess of $225,000,000 received
by the Company from the 2005 Senior Unsecured Note Issuance shall be
deposited in a segregated escrow account (the "2005 Escrow Account")
established pursuant to an escrow agreement (the "2005 Escrow Agreement"),
which 2005 Escrow Agreement (I) shall provide that the funds deposited in
the 2005 Escrow Account shall be invested only in cash and Cash
Equivalents, (II) shall provide that the funds deposited in the 2005 Escrow
Account shall only be released (x) on the CEAc Acquisition Date for the
purpose of providing the financing, in part, of the CEAc Acquisition or (y)
in the event the CEAc Acquisition Date does not occur, on the earlier of
(i) July 31, 1995 and (ii) the date upon which the Company's obligations to
consummate the CEAc Acquisi-
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<PAGE>
tion pursuant to the CEAc Stock Purchase Agreement has been terminated,
for the purpose of prepaying (A) the then outstanding principal, accrued
interest and premium with respect to all of the then outstanding 2005
Senior Unsecured Notes and (B) to the extent any amounts remain in the
2005 Escrow Account after giving effect to the application provided in
the immediately preceding clause (A), Loans in the manner provided in
Section 4.02(e)(i), and (III) shall otherwise be in form and substance
satisfactory to the Agents;
(xix) CEAc Existing Indebtedness listed on Schedule XVI but no
refinancings or renewals thereof except in compliance with Section
10.05(xix), as the outstanding principal amount of said CEAc Existing
Indebtedness may be permanently reduced from time to time as required by
Section 4.02(m);
(xx) Indebtedness of CEAc Acquisition Corp. and its Subsidiaries
pursuant to or permitted by the Exide European Refinancing Facility
Agreement, so long as (a) the aggregate outstanding principal amount
thereof at no time exceeds an amount equal to (x) 2,825,900,000 French
Francs (or its equivalent amount in other currencies as calculated
pursuant to the Exide European Refinancing Facility Agreement) less (y)
the amount of any permanent repayments and/or prepayments of the
principal of outstanding Indebtedness under the Exide European Facility
Agreement made as required by Sections 4.02 (m) and/or (o), (b) if such
Indebtedness is to be secured, only assets of CEAc Acquisition Corp. and
its Subsidiaries shall serve as security therefor, and the granting of
such security shall not violate the terms of any Indebtedness of the
Company and its Subsidiaries which is to remain outstanding after giving
effect thereto (and shall specifically be required to comply with the
provisions of Section 4.8 of the Senior Note Indenture, the 2005 Senior
Unsecured Note Indenture and the Senior Subordinated Note Indenture) and
(c) the Exide European Refinancing Facility Agreement shall have no
restrictions (x) which would violate the provisions of Section 4.5 of
the Senior Note Indenture, the 2005 Senior Unsecured Note Indenture or
the Senior Subordinated Note Indenture or (y) which would violate any
terms of any other Indebtedness of the Company and its Subsidiaries
which is to remain outstanding;
(xxi) Indebtedness of CEAc Acquisition Corp. and its
Subsidiaries as described in preceding clauses (xvii) and (xviii) shall
be permitted to be refinanced or successively refinanced by CEAc
Acquisition Corp. and its Subsidiaries, provided that (a) the aggregate
principal amount of the outstanding Indebtedness of CEAc Acquisition
Corp. and its Subsidiaries is not increased as a result thereof, (b) if
such Indebtedness is to be secured, only assets of CEAc Acquisition
Corp. and its Subsidiaries shall serve as security therefor, and the
granting of such security shall not violate the terms of any
Indebtedness of the Company and its Subsidiaries which is to remain
outstanding after giving effect thereto (and shall specifically be
required to comply with the provisions of Section 4.8 of the Senior Note
Indenture, the 2005 Senior Unsecured Note Indenture and the Senior
Subordinated Note
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<PAGE>
Indenture) and (c) the respective issue of refinancing Indebtedness
shall have no restrictions (x) which would violate the provisions of
Section 4.5 of the Senior Note Indenture, the 2005 Senior Unsecured Note
Indenture or the Senior Subordinated Note Indenture or (y) which would
violate any terms of any other Indebtedness of the Company and its
Subsidiaries which is to remain outstanding;
(xxii) from and after the date of the consummation of the
Schuylkill Acquisition in accordance with the requirements of this
Agreement, unsecured Indebtedness of the Company pursuant to (x) the
Contingent Lead Note, (y) the Schuylkill Make Whole Obligations and (z)
the Schuylkill Assumed Tax Liability shall be permitted; and
(xxiii) Indebtedness of the Company pursuant to the Approved
Incremental Financing.
10.06 Advances, Investments and Loans. The Company will not, and
-------------------------------
will not permit any of its Subsidiaries to, directly or indirectly, lend
money or 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, any other Person, or pur chase or own a futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract, or
hold any cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Company and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance
with customary terms;
(ii) the Company and its Subsidiaries may acquire and hold cash
and Cash Equivalents;
(iii) the Company and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs
of such loans and advances) shall not exceed $3,000,000;
(iv) the Company and its Subsidiaries may enter into Interest
Rate Protection or Other Hedging Agreements to the extent permitted in
Section 10.05(iii) or (viii) and Interest Rate Agreements as defined in,
and to the extent permitted by, Section 10.05(vii);
(v) transactions expressly permitted pursuant to Sections 10.02
and 10.03 shall, to the extent constituting Investments, be permitted
pursuant to this Section 10.06;
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<PAGE>
(vi) the Company or any of its Wholly-Owned Domestic Subsidiaries
may make intercompany loans to the Company or any other Wholly-Owned
Domestic Subsidiary, provided that (x) each such intercompany loan is
evidenced by an intercompany note in the form of Exhibit N (each, an
"Intercompany Note"), (y) each Intercompany Note shall be pledged to the
Collateral Agent pursuant to the Pledge Agreement and (z) the aggregate
principal amount thereof at any time outstanding (determined without regard
to any write-downs or write-offs of such loans and advances) shall not
exceed $10,000,000;
(vii) the Company or any of its Wholly-Owned Domestic Subsidiaries
may make intercompany loans to any Wholly-Owned Foreign Subsidiary, so long
as (x) the consideration given by the Company or any Wholly-Owned Domestic
Subsidiary in exchange for the amount owed in respect of such intercompany
loan by such Wholly-Owned Foreign Subsidiary consists of shares of capital
stock of the Company and (y) in the case of intercompany loans other than
pursuant to the preceding clause (x), the aggregate principal amount
thereof does not exceed $10,000,000 at any time outstanding (determined
without regard to any write-downs or write-offs thereof);
(viii) Wholly-Owned Foreign Subsidiaries may make intercompany
loans to one another;
(ix) Foreign Subsidiaries may make intercompany loans to Company
and its Domestic Subsidiaries so long as each such intercompany loan is
subject to the terms of the subordination provisions in the form of
Exhibit O;
(x) Investments in Subsidiaries which exist from time to time as
a result of the issuance of Letters of Credit from time to time
hereunder shall be permitted;
(xi) the Company may establish Subsidiaries to the extent
permitted by Section 10.16;
(xii) Investments of (w) the Company and its Subsidiaries
(other than CEAc Acquisition Corp. and its Subsidiaries) existing on the
Effective Date and listed on Schedule X, (x) the Company in CEAc US
Holdco in connection with the initial capitalization thereof (including
for this purpose the equity capitalization thereof and any indebtedness
capitalization represented by CEAc Acquisition Intercompany
Indebtedness) in an amount not to exceed $421,950,000, (y) CEAc US
Holdco in CEAc Acquisition Corp. in connection with the initial
capitalization thereof in an amount not to exceed $421,950,000 and (z)
CEAc Acquisition Corp. and its Subsidiaries existing on the CEAc
Acquisition Date and listed on Schedule XIX (such Investments permitted
pursuant to this clause (xii), "Existing Investments") shall be
permitted;
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<PAGE>
(xiii) (A) the Company may (x) make intercompany loans to BIG
(the "BIG Intercompany Loans"), so long as the source of such BIG
Intercompany Loans shall consist solely of BIG Notes Cash Collateral and
the aggregate principal amount of BIG Intercompany Loans (determined
without regard to any write-downs or write-offs thereof) does not exceed
the outstanding principal amount of the BIG Notes outstanding as of the
Effective Date, (y) to the extent the obligations to repay such BIG
Intercompany Loans have been transferred from BIG to Euro Exide, sell
its rights to receive payments under such BIG Intercompany Loans to CEAc
Acquisition Corp., the consideration for which shall consist solely of
the issuance by CEAc Acquisition Corp. to the Company of an intercompany
note (the "CEAc Equity Note") and (z) contribute such CEAc Equity Note
to the capital of, and/or purchase (with the purchase price to consist
solely of the transfer of the CEAc Equity Note) additional capital stock
of, CEAc Acquisition Corp., provided, that on the date of the
--------
contribution permitted pursuant to this clause (z), the Company shall
have taken any and all actions requested by the Collateral Agent with
respect to the pledge of such capital stock to the Collateral Agent
pursuant to the Initial Pledge Agreement and (B) to the extent that CEAc
Acquisition Corp. is the owner of the rights to receive payments with
respect to the BIG Intercompany Loans, CEAc Acquisition Corp. may
contribute such BIG Intercompany Loans to the capital of, and/or
purchase additional common stock of, Euro Exide;
(xiv) the Company and its Subsidiaries may in the ordinary
course of business enter into (a) non-speculative commodities futures
agreements for raw materials reasonably related to the production needs
of the Company and its Subsidiaries, (b) non-speculative Currency
Hedging Agreements and (c) Interest Rate Protection or Other Hedging
Agreements with CEAc Acquisition Corp. or any of its Subsidiaries in
connection with Interest Rate Agreements under, and as defined in,
Section 10.05(vii);
(xv) CEAc Acquisition Corp. may effect open market purchases of
Remaining Tudor Shares and/or Remaining Tudor Convertible Bonds,
provided that (v) no Default or Event of Default shall have occurred and
--------
be continuing or result from such purchase, (w) such purchase is not
made in connection with a Secondary Tender Offer, (x) the price per
share paid by CEAc Acquisition Corp. in connection with each such
purchase of Remaining Tudor Shares shall not exceed 1145 Pesetas, and
(y) the aggregate price paid by CEAc Acquisition Corp. in connection
with all such purchases of Remaining Tudor Shares and Remaining Tudor
Convertible Bonds shall not exceed the Secondary Tender Offer Maximum
Offered Consideration;
(xvi) Investments represented by the CEAc Acquisition
Intercompany Notes executed and delivered in accordance with Section
6A.09(c) shall be permitted;
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<PAGE>
(xvii) CEAc Acquisition Corp. or any of its Subsidiaries may make
intercompany loans to CEAc Acquisition Corp. or any other Subsidiary of
CEAc Acquisition Corp. provided that the aggregate principal amount thereof
at any time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed the amounts
permitted pursuant to the Exide European Refinancing Facility Agreement;
(xviii) Investments made by CEAc or any of its Subsidiaries in an
aggregate amount not to exceed $6,000,000 pursuant to the Sale Agreement,
dated October 1, 1994, between the State Treasury of the Republic of Poland
and CEAc;
(xix) CEAc Acquisition Corp. or any of its Wholly-Owned Subsidiaries
may acquire the equity interests of Sonnenschein outstanding on the CEAc
Acquisition Date and not owned by them, provided that the aggregate amount
--------
of the consideration thereof does not exceed 26,000,000 Deutsche Marks;
(xx) Investments of the Company in Wholly-Owned Subsidiaries of
the Company created after the Exide European Restructuring Date in
connection with the initial capitalization of a Majority Subsidiary of
such Wholly-Owned Subsidiary in an amount thereof not to exceed
$3,000,000 individually and $10,000,000 for all Investments made
pursuant to this clause (xx), provided that Investments permitted
--------
pursuant to this clause (xx) shall (A) consist solely of equipment owned
by the Company and (B) reduce the amount otherwise permitted to effect
Permitted Acquisitions pursuant to Section 9.15 by an amount equal to
the Investments made by the Company pursuant to this clause (xx);
(xxi) [INTENTIONALLY OMITTED];
(xxii) CEAc Acquisition Corp. may effect open market purchases
of Remaining CEAc Shares, provided that (x) no Default or Event of
--------
Default shall exist at the time of any such purchase or immediately
after giving effect thereto and (y) the aggregate price paid by CEAc
Acquisition Corp. in connection with all such purchases of Remaining
CEAc Shares shall not exceed $1,500,000; and
(xxiii) CEAc Acquisition Corp. and its Subsidiaries may make
additional Investments and asset acquisitions (so long as each such
Investment and/or asset acquisition is permitted pursuant to the Exide
European Refinancing Facility Agreement) in the ordinary course of
business in an aggregate amount not to exceed $35,000,000 (or in the
case of Investments and/or asset acqusitions other than in Dollars, the
Dollar Equivalent thereof) at any time.
10.07 Transactions with Affiliates. The Company will not, and
----------------------------
will not permit any of its Subsidiaries to, enter into any transaction or
series of related transactions, whether or not in the ordinary course of
business, with any Affiliate of the Company or any
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<PAGE>
of its Subsidiaries, other than in the ordinary course of business and on
terms and conditions substantially as favorable to the Company or such
Subsidiary as would reasonably be obtained by the Company or such Subsidiary
at that time in a comparable arm's-length transaction with a Person other
than an Affiliate, except that:
(i) Dividends may be paid to the extent provided in Section
10.03;
(ii) Investments may be made to the extent provided in Section
10.06;
(iii) in the case of any transaction between the Company and
one or more of its Subsidiaries, or between a Subsidiary and a direct or
indirect parent of such Subsidiary which is also a Subsidiary of the
Company, the respective transaction shall only be required to be on
terms and conditions substantially as favorable to the Company or the
respective parent Subsidiary as would have been obtained by such Person
at such time in a comparable arms'-length transaction with a Person
other than an Affiliate;
(iv) customary fees may be paid to non-officer directors of the
Company;
(v) the Company may share proceeds of Environmental Insurance
Recoveries with predecessor entities and owners of such predecessor
entities on terms deemed fair and reasonable by the Board of Directors
of the Company, as evidenced by a board resolution;
(vi) transactions disclosed in Note 13 to the Company's fiscal
year 1994 audited financial statements delivered to the Banks prior to
the Effective Date shall be permitted;
(vii) the CEAc Restructuring may be effected in accordance with
the requirements of the Eighth Amendment;
(viii) the Exide European Restructuring may be effected in
accordance with the requirements of the Ninth Amendment; and
(ix) the Second Exide European Restructuring may be effected in
accordance with the requirements of the Tenth Amendment.
10.08 Capital Expenditures. (a) (i) The Company will not, and
--------------------
will not permit any of its Subsidiaries (other than CEAc Acquisition Corp.
and its Subsidiaries) to, make any Capital Expenditures, except that (A)
during the period from the Effective Date until March 31, 1997, the Company
may make Capital Expenditures of up to $20,000,000 to build and construct
improvements with respect to the Bristol Facility and (B) the Company and its
Subsidiaries (other than CEAc Acquisition Corp. and its Subsidiaries) shall
be permitted to make other Capital Expenditures, (w) during the period from
the
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<PAGE>
Effective Date to and including the last day of the fiscal year ending March
31, 1995, so long as the aggregate amount thereof does not exceed
$20,000,000, (x) during the fiscal year of the Company ended in March 1996,
so long as the aggregate amount thereof does not exceed $34,000,000, (y)
during the fiscal year of the Company ended in March 1997, so long as the
aggregate amount thereof does not exceed $32,000,000 and (z) during any
fiscal year of the Company ending thereafter, not in excess of $40,000,000.
(ii) In addition to Capital Expenditures permitted pursuant to the
preceding clause (i) and the following clause (iii), to the extent that the
amount of Capital Expenditures (including all Capital Expenditures made
during the respective fiscal year pursuant to preceding clause (i)(B) or as a
result of this clause (ii), but excluding Capital Expenditures made pursuant
to preceding clause (i)(A) or following clause (iii)) made by the Company and
its Subsidiaries (other than CEAc US Holdco, Tudor and their respective
Subsidiaries) during any fiscal year of the Company are less than the amount
permitted to be made pursuant to preceding clause (i)(B) (without giving
effect to any additional amount available as a result of this clause (ii) or
following clause (iii)), such amount may be carried forward and utilized by
the Company and its Subsidiaries (other than CEAc US Holdco, Tudor and their
respective Subsidiaries) to make Capital Expenditures in excess of the amount
permitted above in the immediately succeeding fiscal year, provided that no
amount once carried forward to the next fiscal year may be carried forward to
a fiscal year thereafter.
(iii) In addition to the Capital Expenditures permitted to be made
pursuant to preceding clauses (i) and (ii), the Company and its Subsidiaries
(other than CEAc US Holdco, Tudor and their respective Subsidiaries, except
as permitted by subclause (z) below) may (x) make additional Capital
Expenditures at any time so long as the amount of such Capital Expenditures
made at any time does not exceed the Company Retained Excess Cash Flow Amount
at such time (as determined immediately before giving effect to the
respective Capital Expenditures), (y) with proceeds of Environmental
Insurance Recoveries actually received by the Company after the Effective
Date (and which will be retained by the Company for its own account after
giving effect to any payments by the Company as described in Section 10.07),
make additional Capital Expenditures (not exceeding $10,000,000 million in
the aggregate) to fund the innovative technology cleanup of the Brown Battery
Site and (z) make additional Capital Expenditures to effect the CEAc
Acquisition in accordance with the relevant requirements of Section 10.02.
(b)(i) The Company will not permit CEAc Acquisition Corp. or any
of its Subsidiaries to make any Capital Expenditures, except that
Subsidiaries of CEAc Acquisition Corp. shall be permitted to make Capital
Expenditures during any fiscal year of the Company not in excess of (x) in
the case of the Company's fiscal year ended March 31, 1996, $70,000,000 and
(y) for any fiscal year ended thereafter, $75,000,000.
(ii) In addition to Capital Expenditures permitted pursuant to the
preceding clause (i), to the extent that the amount of Capital Expenditures
(including all Capital
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<PAGE>
Expenditures pursuant to preceding clause (i) and pursuant to this clause
(ii)) made by Subsidiaries of CEAc Acquisition Corp. during any fiscal year
of the Company (beginning with the fiscal year ended March 31, 1996) are less
than the amount permitted to be made pursuant to preceding clause (i)
(without giving effect to any additional amount available as a result of this
clause (ii)), such amount may be carried forward and utilized by Subsidiaries
of CEAc Acquisition Corp. to make Capital Expenditures in excess of the
amount permitted above in the immediately succeeding fiscal year, provided
that no amount once carried forward to the next fiscal year may be carried
forward to a fiscal year thereafter.
(iii) In addition to the Capital Expenditures permitted to be made
pursuant to preceding clauses (i) and (ii), the CEAc Acquisition and the
Exide European Restructuring may be effected in accordance with the
applicable requirements of Section 10.02.
10.09 Consolidated Fixed Charge Coverage Ratio. The Company will
----------------------------------------
not permit the Consolidated Fixed Charge Coverage Ratio for any period of
four consecutive fiscal quarters (taken as one accounting period) ended on a
date set forth below to be less than the ratio set forth opposite such date
below:
<TABLE>
<CAPTION>
Date Ratio
---- -----
<S> <C>
March 31, 1997 1.00:1
March 31, 1998 and each March 31 thereafter 1.25:1
</TABLE>
10.10 Minimum Consolidated EBITDA (a) The Company will not permit
---------------------------
the Company Consolidated EBITDA for any period of four consecutive fiscal
quarters, in each case taken as one accounting period, ended during a period
set forth below to be less than the amount set forth opposite such period
below:
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
From and including the last day
of the fiscal quarter ended in
March, 1996 to but excluding the
last day of the fiscal quarter
ended in June, 1996 $ 60,000,000
Thereafter from and including the
last day of the fiscal quarter
ended in June, 1996 to but excluding
the last day of the fiscal quarter
ended in September, 1996 $ 63,000,000
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Thereafter from and including the
last day of the fiscal quarter
ended in September, 1996 to but
excluding the last day of the
fiscal quarter ended in
December, 1996 $ 65,000,000
Thereafter from and including the
last day of the fiscal quarter
ended in December, 1996 to but
excluding the last day of the
fiscal quarter ended in
March, 1997 $ 80,000,000
Thereafter from and including
the last day of the fiscal
quarter ended in March, 1997
to but excluding the last day
of the fiscal quarter ended in
March, 1998 $100,000,000
Thereafter from and including the
last day of the fiscal quarter
ended in March, 1998 to but
excluding the last day of the
fiscal quarter ended in
March, 1999 $125,000,000
Thereafter $145,000,000
</TABLE>
(b) The Company will not permit the Combined Consolidated EBITDA
for (i) the period beginning on October 1, 1994 and ended on the last day of
the fiscal quarter ended closest to March 31, 1995 (taken as one accounting
period), to be less than $50,000,000 or (ii) any period of four consecutive
fiscal quarters, in each case taken as one accounting period, ended during a
period set forth below to be less than the amount set forth opposite such
period below:
<TABLE>
<CAPTION>
Period Amount
------ ------
<S> <C>
Ended after April 1, 1995 to
but excluding the last day of
the fiscal quarter ended in
September, 1995 $150,000,000
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Thereafter from and including
the last day of the fiscal
quarter ended in September,
1995 to but excluding the last
day of the fiscal quarter
ended in December, 1995 $175,000,000
Thereafter from and including
the last day of the fiscal
quarter ended in December,
1995 to but excluding the last
day of the fiscal quarter
ended in March, 1996 $200,000,000
Thereafter from and including
the last day of the fiscal
quarter ended in March, 1996
to but excluding the last day
of the fiscal quarter ended in
December, 1996 $210,000,000
Thereafter from and including
the last day of the fiscal
quarter ended in December,
1996 to but excluding the last
day of the fiscal quarter
ended in March, 1997 $230,000,000
Thereafter from and including
the last day of the fiscal
quarter ended in March, 1997
to but excluding the last day
of the fiscal quarter ended in
March, 1998 $275,000,000
Thereafter $300,000,000
</TABLE>
10.11 Maximum Leverage Ratios. (a) The Company will not permit,
-----------------------
at any time during a period listed below, the ratio of Company Consolidated
Indebtedness at such time to Company Consolidated EBITDA for the period of
four consecutive fiscal quarters (taken as one accounting period) last ended
prior to the date of determination, to exceed the ratio set forth below
opposite the respective period in which the determination is being made:
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<PAGE>
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From and including the
last day of the fiscal quarter
ended in March, 1996 to but excluding
the last day of the fiscal quarter
ended in June, 1996 10.75:1
Thereafter from and including the
last day of the fiscal quarter
ended in June, 1996 to but excluding
the last day of the fiscal quarter
ended in September, 1996 9.50:1
Thereafter from and including the
last day of the fiscal quarter
ended in September, 1996 to but
excluding the last day of the
fiscal quarter ended in
December, 1996 9.25:1
Thereafter from and including the
last day of the fiscal quarter
ended in December, 1996 to but
excluding the last day of the
fiscal quarter ended in
March, 1997 8.00:1
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Thereafter from and including the
last day of the fiscal quarter
ended in March, 1997 to but
excluding the last day of the
fiscal quarter ended in
March, 1998 7.00:1
Thereafter from and including the
last day of the fiscal quarter
ended in March, 1998 to but
excluding the last day of the
fiscal quarter ended in
March, 1999 6.00:1
Thereafter from and including the
last day of the fiscal quarter
ended in March, 1999 to but
excluding the last day of the
fiscal quarter ended in
March, 2000 5.50:1
</TABLE>
(b) The Company will not permit, at any time during a period
listed below, the ratio of Combined Consolidated Indebtedness at such
time to Combined Consolidated EBITDA for the period of four consecutive
fiscal quarters (taken as one accounting period) ended prior to the date
of determination, to exceed the ratio set forth below opposite the
respective period in which the determination is being made:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
From and including the last
day of the fiscal quarter
ended in March, 1996 to
but excluding the last day of
the fiscal quarter ended
in June, 1996 7.00:1
Thereafter from and including the
last day of the fiscal quarter
ended in June, 1996 to but excluding
the last day of the fiscal quarter
ended in September, 1996 7.00:1
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Thereafter from and including the
last day of the fiscal quarter
ended in September, 1996 to but excluding
the last day of the fiscal quarter
ended in December, 1996 7.00:1
Thereafter from and including the
last day of the fiscal quarter
ended in December, 1996 to but excluding
the last day of the fiscal quarter
ended in March, 1997 6.50:1
Thereafter from and including the
last day of the fiscal quarter
ended in March, 1997 to but excluding
the last day of the fiscal quarter
ended in March, 1998 5.00:1
Thereafter from and including the
last day of the fiscal quarter ended
in March, 1998 to but excluding the
last day of the fiscal quarter
ended in March, 1999 3.75:1
Thereafter from and including the last
day of the fiscal quarter ended in
March, 1999 to but excluding the last
day of the fiscal quarter ended in
March, 2000 3.50:1
Thereafter 3.00:1
</TABLE>
10.12 Limitation on Modifications of Indebtedness; Modifications
----------------------------------------------------------
of Certificate of Incorporation, By-Laws and Certain Other Agreements; etc.
- ---------------------------------------------------------------------------
The Company will not, and will not permit any of its Subsidiaries to:
(i) amend or modify, or permit the amendment or modification of,
any provision of the Existing Indebtedness, the CEAc Existing
Indebtedness, the Approved Incremental Financing (after the consummation
thereof), the Exide European Refinancing Facility Agreement (although
the provisions of this Section 10.12(i) shall cease to be applicable to
the Exide European Refinancing Facility Agreement on the earlier of (x)
the date of the consummation of the Approved Incremental Financing and
(y) the date upon which the Company achieves the ratio
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referred to in Section 10.11(a) for the 1999 fiscal year of the Company),
the 2005 Senior Unsecured Note Indenture, any 2005 Senior Unsecured Note or
of the Receivables Facility or of any agreement (including, without
limitation, any purchase agreement, indenture, loan agreement or security
agreement) relating thereto other than any amendments or modifications to
the Existing Indebtedness (except that amendments or modification to either
Indenture shall require the consent of the Required Banks), the CEAc
Existing Indebtedness, the Approved Incremental Financing, the Exide
European Refinancing Facility Agreement or the Receivables Facility which
do not in any way adversely affect the interests of the Banks;
(ii) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for value
of, or any prepayment or redemption as a result of any asset sale,
change of control or similar event of, any Senior Notes or Senior
Subordinated Notes or 2005 Senior Unsecured Notes or the Approved
Incremental Financing (after the consummation thereof) (it being
understood and agreed that the 2005 Senior Unsecured Note Exchange will
be permitted as described in the third "WHEREAS" clause contained in the
Fifth Amendment);
(iii) amend, modify or change its certificate of incorporation
or analogous organizational documentation (including, without
limitation, by the filing or modification of any certificate of
designation) or by-laws, or any agreement entered into by it, with
respect to its capital stock (including any Shareholders' Agreement), or
enter into any new agreement with respect to its capital stock, in each
case which would in any way adversely affect the interests of the Banks,
except for such amendments, modifications or changes necessary in
connection with the implementation of the Shareholder Rights Plan;
(iv) amend or modify or change any provision of the Acquisition
Documents or the Initial Tender Offer Documents (other than
modifications to the Initial Tender Offer Documents which (x) do not
increase the consideration payable in connection with the Initial Tender
Offer, (y) do not alter the conditions contained in the Initial Offer to
Purchase and (z) are not adverse in any respect to the interests of the
Banks) or, after the approval thereof by the Banks, the Secondary Tender
Offer Documents (other than modifications to the Secondary Tender Offer
Documents which (x) do not increase the consideration payable in
connection with the Secondary Tender Offer, (y) do not alter the
conditions contained in the Secondary Offer to Purchase and (z) are not
adverse in any respect to the interests of the Banks); or
(v) amend or modify or change any provision of the CEAc
Acquisition Documents, other than modifications which (x) do not
materially alter the price or
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terms of the CEAc Acquisition and (y) are not adverse in any respect to
the interests of the Banks.
10.13 Limitation on Certain Restrictions on Subsidiaries. The
--------------------------------------------------
Company will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Subsidiary to (a)
pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits owned by the Company or any
Subsidiary of the Company, or pay any Indebtedness owed to the Company or a
Subsidiary of the Company, (b) make loans or advances to the Company or any
of the Company's Subsidiaries or (c) transfer any of its properties or assets
to the Company, except for such encumbrances or restrictions existing under
or by reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) restrictions contained in the Receivables Facility as an
effect on the Effective Date, (iv) restrictions contained in any other issue
of Existing Indebtedness to the extent such restrictions are described in
Schedule VII and any restrictions contained in the Exide European Refinancing
Facility Agreement (so long as such restrictions are not more restrictive in
any material respect than those contained in the CEAc Refinancing Credit
Facility and the Tudor Refinancing Facility Agreement) or any issue of CEAc
Existing Indebtedness to the extent such restrictions are described on
Schedule XVII, (v) customary provisions restricting subletting or assignment
of any lease governing a leasehold interest of the Company or a Subsidiary of
the Company, (vi) customary provisions restricting assignment of any
licensing agreement entered into by the Company or a Subsidiary of the
Company in the ordinary course of business, (vii) any holder of a Lien
permitted pursuant to this Agreement may restrict the transfer of the
respective asset or assets subject thereto, (viii) restrictions contained in
any issue of Indebtedness which refinanced Indebtedness described in
preceding clause (iv) so long as the restrictions are no more restrictive
than those contained in the Indebtedness being refinanced and are no more
restrictive than the restrictions described in Schedule VII or XVII, as the
case may be, and (ix) restrictions existing or created with respect to Tudor
or any of its Subsidiaries, related to Indebtedness of Tudor or any of its
Subsidiaries, and which expressly provide that (except in the case of (x) an
event of default which has lead to an acceleration of such Indebtedness or
(y) the failure to pay such Indebtedness in full at the final maturity of
such Indebtedness) Tudor or such Subsidiary, as the case may be, may make
payments, loans, advances and transfers to the Company in an amount equal to
100% of its Adjusted Consolidated Net Income (as such term is defined in the
Indentures (other than the 2005 Senior Unsecured Note Indenture) as in effect
on February 3, 1995) subsequent to October 2, 1994 (provided that in the
event such payments, loans, advances and transfers are made in the form of
asset transfers, such assets shall be valued at the value of such assets set
forth on the Company's books under GAAP).
10.14 Limitation on Issuances of Capital Stock. (a) The Company
----------------------------------------
shall not issue any capital stock or any options or warrants to purchase, or
securities convertible into, capital stock, except for (i) issuances of
common stock of the Company or any options or warrants to purchase common
stock of the Company, (ii) issuances of common stock and
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debt securities convertible into common stock of the Company pursuant to the
terms of the Approved Incremental Financing and (iii) issuances of preferred
stock of the Company pursuant to the Shareholder Rights Plan.
(b) Except as expressly permitted by Section 10.02(xi) and Section
10.06(xiii), the Company shall not permit any of its Subsidiaries to issue
any capital stock (including by way of sales of treasury stock) or any
options or warrants to purchase, or securities convertible into, capital
stock, except (i) for transfers and replacements of then outstanding shares
of capital stock, (ii) for stock splits, stock dividends and additional
issuances which do not decrease the percentage ownership of the Company or any
of its Subsid iaries in any class of the capital stock of such Subsidiary, and
(iii) to qualify directors to the extent required by applicable law. All capital
stock issued in accordance with this Section 10.14 shall, to the extent required
by a Pledge Agreement, be delivered to the Collateral Agent for pledge pursuant
to the respective Pledge Agreement.
10.15 Certain Sale-Leaseback Transactions. The Company shall not
-----------------------------------
enter into, or suffer to exist, any Attributable Indebtedness within the
meaning of Section 4.08 of the Senior Note Indenture, whether arising from
sale-leaseback transactions or otherwise.
10.16 Limitation on Creation of Subsidiaries. Except for the
--------------------------------------
acquisition of Tudor, CEAc, Permitted Acquisitions and Permitted Sales Branch
Acquisitions, and except for the creation of CEAc US Holdco as a direct
Wholly-Owned Subsidiary of the Company, of CEAc Acquisition Corp. as a direct
Wholly-Owned Subsidiary of CEAc US Holdco and of Exide France as a direct
Wholly-Owned Subsidiary of CEAc Acquisition Corp., in each case to effect the
CEAc Acquisition and for the creation of new Wholly-Owned Subsidiaries as
contemplated by the definition of Permitted Acquisitions and by Section
10.02(x), (xi), (xiv), (xvi) and (xviii), in each case effected or
established in accordance with the applicable requirements of this Agreement,
neither the Company nor any of its Subsidiaries shall establish, create or
acquire any additional Subsidiaries without the prior written consent of the
Required Banks. At the time of the creation, establishment or acquisition of
any Subsidiary, any capital stock thereof required to be pledged pursuant to
any Pledge Agreement shall be pledged in accordance with the terms thereof,
and all action required to be taken pursuant to Section 9.20 shall be taken
in connection with the creation, establishment or acquisition of the
respective Subsidiary. Notwithstanding anything to the contrary contained in
the immediately preceding sentence, the Company may from time to time form
Wholly-Owned Subsidiaries in connection with exporting, tax planning or other
purposes incidental to the Company's business, so long as each Subsidiary
created or established pursuant to this sentence at no time has more than
$1,000,000 in assets.
10.17 Initial Tender Offer. The Company shall not permit the
--------------------
Initial Tender Offer to be consummated or the Initial Tender Offer Date to
occur, unless each of the following conditions is satisfied at the time
thereof:
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(i) all conditions to the consummation of the Initial Tender
Offer contained in the Initial Offer to Purchase have been satisfied;
(ii) as a result of the consummation of the Initial Tender
Offer, the Company shall directly own at least 51% of the outstanding
shares of capital stock of Tudor on a fully diluted basis, and at least
51% of the outstanding voting stock of Tudor;
(iii) the purchase price per Tudor Share shall not exceed that
set forth in the Purchase Agreement, and the capitalization of Tudor
shall be as represented in the Purchase Agreement (which Purchase
Agreement shall be in the form delivered to the Banks prior to the
Effective Date, without giving effect to any changes thereto after the
Effective Date);
(iv) the Spanish agencies responsible for the defense of
competition shall have expressly approved the acquisition by the Company
of the majority shareholding of Tudor pursuant to the Initial Tender
Offer;
(v) the Government (as such term is defined in the Initial Offer
to Purchase) shall not have made its authorization subject to compliance
with any condition (other than immaterial conditions complied with by
the Company);
(vi) the Initial Tender Offer Date shall occur on or before
December 31, 1994;
(vii) the requirements of Section 9.16 shall have been
satisfied with respect to the Initial Tender Offer; and
(viii) on the Initial Tender Offer Date, the Company shall have
duly authorized, executed and delivered before a notary in the kingdom
of Spain a pledge agreement governed by Spanish law and in form and
substance satisfactory to the Collateral Agent and its U.S. and Spanish
counsel pursuant to which the Company shall pledge all Tudor Shares and
Tudor Convertible Bonds acquired by it pursuant to the Initial Tender
Offer (subject to the percentage limitations for Foreign Subsidiaries
voting stock as contemplated by the Initial Pledge Agreement) (as
modified, supplemented or amended from time to time, the "Tudor Shares
Pledge Agreement"), which pledge agreement shall secure the Obligations
on the same basis as the Initial Pledge Agreement, but shall be in
appropriate form under Spanish law, and the Company shall have taken all
action deemed necessary or desirable by the Collateral Agent or its
Spanish counsel in connection therewith.
10.18 Secondary Tender Offer. (a) The Company shall not permit
----------------------
the Secondary Tender Offer to be commenced unless all conditions contained in
Section 6 are
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satisfied (whether or not the Secondary Tender Offer Credit Support is issued
in connection with the Secondary Tender Offer) prior to the commencement
thereof.
(b) The Company shall not permit the Secondary Tender Offer to be
consummated or the Secondary Tender Offer Date to occur, unless each of the
following conditions is satisfied at the time thereof:
(i) all conditions to the consummation of the Secondary Tender
Offer contained in the Secondary Offer to Purchase have been satisfied;
(ii) the aggregate purchase price offered pursuant to the
Secondary Tender Offer shall not be in excess of the amount permitted to
be paid pursuant to Section 6.02 of this Agreement;
(iii) the Secondary Tender Offer Filing Date shall have
occurred within six months after the Initial Tender Offer Filing Date,
and the Secondary Tender Offer Date shall have occurred within 90 days
after the Secondary Tender Offer Filing Date; and
(iv) the requirements of Section 9.16 shall have been satisfied
with respect to the Secondary Tender Offer.
10.19 Section 4.3(a)(i) Indebtedness. The Company will not, and
------------------------------
will not permit any of its Subsidiaries to, incur any Indebtedness (other
than Indebtedness constituting Revolving Loans and Swingline Loans) under
Section 4.3(a)(i) of the Senior Note Indenture, under Section 4.3(a)(i) of
the 2005 Senior Unsecured Note Indenture or under Section 4.3(a)(i) of the
Senior Subordinated Note Indenture in excess of an amount equal to (x) the
amount of Indebtedness permitted to be incurred pursuant to Section 4.3(a)(i)
of the respective Indenture, less (y) the Total Revolving Loan Commitment as
then in effect.
SECTION 11. Events of Default. Upon the occurrence of any of the
-----------------
following specified events (each an "Event of Default"):
11.01 Payments. The Company shall (i) default in the payment when
--------
due of any principal of any Loan, any Note or any Unpaid Drawing or (ii)
default, and such default shall continue unremedied for two or more Business
Days, in the payment when due of any interest on any Loan or Note, or any
Fees or any other amounts owing hereunder or thereunder; or
11.02 Representations, etc. Any representation, warranty or
---------------------
statement made by any Credit Party herein or in any other Credit Document or
in any certificate delivered pursuant hereto or thereto shall prove to be
untrue in any material respect on the date as of which made or deemed made;
or
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<PAGE>
11.03 Covenants. The Company shall (i) default in the due
---------
performance or observance by it of any term, covenant or agreement contained
in Section 9.01(g)(i), 9.01(n), 9.08, the second sentence of Section 9.11(b),
9.14 , 9.15, 9.17, 9.18, 9.19, 9.21 or Section 10 or Section 14.19 or (ii)
default in the due performance or observance by it of any other term,
covenant or agreement (other than those referred to in Sections 11.01 and
11.02 and clause (i) of this Section 11.03) contained in this Agreement and
such default shall continue unremedied for a period of 30 days after written
notice to the Company by any Agent or any Bank; or
11.04 Default Under Other Agreements. The Company or any of its
------------------------------
Subsidiaries shall (i) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or (ii)
default in the observance or performance of any agreement or condition
relating to any Indebtedness (other than the Obligations) or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or holders)
to cause (determined without regard to whether any notice is required), any
such Indebtedness to become due prior to its stated maturity, or (iii) any
Indebtedness (other than the Obligations) of the Company or any of its
Subsidiaries shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior to the
stated maturity thereof, provided that it shall not be a Default or Event of
--------
Default under this Section 11.04 unless the aggregate principal amount of all
Indebtedness as described in preceding clauses (i) through (iii), inclusive,
is at least $5,000,000; or
11.05 Bankruptcy, etc. The Company or any of its Subsidiaries
----------------
shall commence a voluntary case concerning itself under Title 11 of the
United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Company or any of its Subsidiaries and the petition is
not controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code)
is appointed for, or takes charge of, all or substantially all of the
property of the Company or any of its Subsidiaries, the Company or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency
or liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Company or any of its Subsidiaries, or there is
commenced against the Company or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days, or the Company or any of
their Subsidiaries is adjudicated insolvent or bankrupt; or any order of
relief or other order approving any such case or proceeding is entered; or
the Company or any of its Subsidiaries suffers any appointment of any
custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or the Company or any
of its Subsidiaries makes a general assignment for the benefit of creditors;
or any corporate action
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is taken by the Company or any of its Subsidiaries for the purpose of
effecting any of the foregoing; or
11.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
-----
funding standard required for any plan year or part thereof or a waiver of
such standard or extension of any amortization period is sought or granted
under Section 412 of the Code, any Plan shall have had or is likely to have a
trustee appointed to administer such Plan, any Plan is, shall have been or is
likely to be terminated or to be the subject of termination proceedings under
ERISA, any Plan shall have an Unfunded Current Liability, a contribution
required to be made to a Plan or a Foreign Pension Plan has not been timely
made, the Company or any Subsidiary of the Company or any ERISA Affiliate has
incurred or is likely to incur a liability to or on account of a Plan under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212
of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code, or the
Company or any Subsidiary of the Company has incurred or is likely to incur
liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired employees
or other former employees (other than as required by Section 601 of ERISA) or
employee pension benefit plans (as defined in Section 3(2) of ERISA) or
Foreign Pension Plans; (b) there shall result from any such event or events
the imposition of a lien, the granting of a security interest, or a liability
or a material risk of incurring a liability; (c) which lien, security
interest or liability, individually and/or in the aggregate, in the opinion
of the Required Banks, will have a material adverse effect upon the business,
operations, condition (financial or otherwise) or prospects of the Company or
any Subsidiary of the Company; or
11.07 Security Documents. At any time after the execution and
------------------
delivery thereof, any of the Security Documents shall cease to be in full
force and effect, or shall cease in any material respect to give the
Collateral Agent for the benefit of the Secured Creditors the Liens, rights,
powers and privileges purported to be created thereby (including, without
limitation, a perfected security interest in, and Lien on, all of the
Collateral), in favor of the Collateral Agent, superior to and prior to the
rights of all third Persons (except as permitted by Section 10.01), and subject
to no other Liens (except as permitted by Section 10.01), or any Credit Party
shall default in any material respect in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed
pursuant to any of the Security Documents and such default shall continue beyond
any grace period specifically applicable thereto pursuant to the terms of such
Security Document; or
11.08 Guarantees. (i) After the execution and delivery thereof,
----------
any Guaranty or any provision thereof shall cease to be in full force or
effect as to the relevant Guarantor, or any Guarantor or Person acting by or
on behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under the relevant 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 its Guaranty or (ii) for any
reason
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whatsoever (and whether or not through any fault or inability on the part of
the Company), the Tudor Guaranty is not executed and delivered by the date
required by Section 9.21; or
11.09 Judgments. One or more judgments or decrees shall be
---------
entered against the Company or any of its Subsidiaries involving in the
aggregate for the Company and its Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) of $5,000,000 or more,
and all such judgments and decrees either shall not have been vacated,
discharged or stayed or bonded pending appeal for any period of 60 days from
the entry thereof; or
11.10 Change of Control. A Change of Control shall occur; or
-----------------
11.11 Receivables Facility. At any time prior to September 1,
--------------------
1995, the Receivables Facility Commitment as then in effect shall be less
than $40,000,000, or at any time prior to September 1, 1995, the Receivables
Financier shall have ceased purchasing receivables pursuant to the
Receivables Facility (except to the extent such purchases are being made
pursuant to a replacement Receivables Facility) for a period in excess of
three consecutive Business Days;
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Administrative Agent, upon the written
request of the Required Banks, shall by written notice to the Company, take
any or all of the following actions, without prejudice to the rights of the
Agents, any Bank or the holder of any Note to enforce its claims against any
Credit Party (provided that, if an Event of Default specified in Section
--------
11.05 shall occur with respect to the Company, the result which would occur
upon the giving of written notice by the Administrative Agent to the Company
as specified in clauses (i) and (ii) below shall occur automatically without
the giving of any such notice): (i) declare the Total Commitments
terminated, whereupon all Commitments of each Bank shall forthwith terminate
immediately and any Commitment Commission shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and the Notes and all
Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or
other notice of any kind, all of which are hereby waived by each Credit
Party; (iii) terminate any Letter of Credit, which may be terminated, in
accordance with its terms; (iv) direct the Company to pay (and the Company
agrees that upon receipt of such notice, or upon the occurrence of an Event
of Default specified in Section 11.05 with respect to the Company, it will
pay) to the Collateral Agent at the Payment Office such additional amount of
cash, to be held as security by the Collateral Agent, as is equal to the
aggregate Stated Amount of all Letters of Credit then outstanding; (v)
enforce, as Collateral Agent, all of the Liens and security interests created
pursuant to the Security Documents; and (vi) apply any cash collateral held
for the benefit of the Banks pursuant to Section 4.02 to repay the respective
outstanding Obligations.
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SECTION 12. Definitions and Accounting Terms.
--------------------------------
12.01 Defined Terms. As used in this Agreement, the following
-------------
terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Acquired Indebtedness" means Indebtedness of a Subsidiary of the
Company assumed or acquired as a result of a Permitted Acquisition, so long
as the respective Indebtedness existed prior to the respective Permitted
Acquisition and was not incurred in connection with, or in contemplation of,
the Permitted Acquisition or the respective Person becoming a Subsidiary of
the Company, and provided that no Person other than the respective Subsidiary
created or acquired as a result of the respective Permitted Acquisition shall
have any liability (contingent or otherwise) with respect to any Acquired
Indebtedness. Notwithstanding anything to the contrary contained above, the
Engitec Equipment Commitments and Schuylkill Assumed Guaranty and L/C
Obligations shall be deemed to constitute Acquired Indebtedness.
"Acquisition" shall mean the purchase by the Company for cash of at
least 52% of the Tudor Shares pursuant to the Purchase Agreement.
"Acquisition Documents" shall mean the Purchase Agreement and all
other documents entered into or delivered in connection with the Purchase
Agreement.
"Additional Collateral" shall mean all property (whether real or
personal) in which security interests are granted (or have been purported to
be granted) (and continue to be in effect at the time of determination)
pursuant to Section 9.11 or 9.12.
"Additional Mortgage" shall have the meaning provided in Section
9.11(a).
"Additional Mortgaged Property" shall have the meaning provided in
Section 9.11(a).
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 9.11 or 9.12.
"Additional Tudor Letter of Credit" shall have the meaning provided
in Section 2.01(a)(vii).
"Additional Tudor Letter of Credit Sub-Limit" at any time shall
mean an amount equal to $25,000,000. Notwithstanding anything to the
contrary contained above, upon the occurrence of the Initial Tender Offer
Termination Date (without the successful consummation of the Initial Tender
Offer), the Additional Tudor Letter of Credit Sub-Limit shall be reduced to
$0.
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"Additional Tudor Supportable Indebtedness" shall mean obligations
of Tudor and its Subsidiaries in respect of their Indebtedness for borrowed
money (other than Banesto Debt and Tudor Convertible Bonds) incurred for
their working capital purposes.
"Adjusted Available Revolving Loan Commitment" for each Bank shall
mean at any time such Bank's Revolving Loan Commitment less such Bank's
Adjusted RL Percentage of the Blocked Commitment, if any, at such time.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market
as published in the most recent Federal Reserve System publication entitled
"Select Interest Rates," published weekly on Form H.15 as of the date hereof,
or if such publication or a substitute containing the foregoing rate
information shall not be published by the Federal Reserve System for any
week, the weekly average offering rate determined by the Administrative Agent
on the basis of quotations for such certificates received by it from three
certificate of deposit dealers in New York of recognized standing or, if such
quotations are unavailable, then on the basis of other sources reasonably
selected by the Administrative Agent, by (y) a percentage equal to 100% minus
the stated maximum rate of all reserve requirements as specified in
Regulation D applicable on such day to a three-month certificate of deposit
of a member bank of the Federal Reserve System in excess of $100,000
(including, without limitation, any marginal, emergency, supplemental,
special or other reserves), plus (2) the then daily net annual assessment
rate as estimated by the Administrative Agent for determining the current
annual assessment payable by the Administrative Agent to the Federal Deposit
Insurance Corporation for insuring three-month certificates of deposit.
"Adjusted RL Percentage" shall mean (x) at a time when no Bank
Default exists, for each Bank, such Bank's RL Percentage and (y) at a time
when a Bank Default exists (i) for each Bank that is a Defaulting Bank, zero
and (ii) for each Bank that is a Non-Defaulting Bank, the percentage
determined by dividing such Bank's Revolving Loan Commitment at such time by
the Adjusted Total Revolving Loan Commitment at such time, it being
understood that all references herein to Revolving Loan Commitments and the
Adjusted Total Revolving Loan Commitment at a time when the Total Revolving
Loan Commitment or Adjusted Total Revolving Loan Commitment, as the case may
be, has been terminated shall be references to the Revolving Loan Commitments
or Adjusted Total Revolving Loan Commitment, as the case may be, in effect
immediately prior to such termination, provided that (A) no Bank's Adjusted
--------
RL Percentage shall change upon the occurrence of a Bank Default from that in
effect immediately prior to such Bank Default if after giving effect to such
Bank Default, and any repayment of Revolving Loans and Swingline Loans at
such time pursuant to Section 4.02(a) or otherwise, the sum of (i) the
aggregate outstanding principal amount of Revolving Loans of all Non-
Defaulting Banks, plus (ii) the aggregate outstanding principal amount of
Swingline Loans, plus (iii) the Revolving Letter of Credit Outstandings,
exceed the Adjusted Total Revolving Loan Com-
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mitment; (B) the changes to the Adjusted RL Percentage that would have become
effective upon the occurrence of a Bank Default but that did not become
effective as a result of the preceding clause (A) shall become effective on
the first date after the occurrence of the relevant Bank Default on which the
sum of (i) the aggregate outstanding principal amount of the Revolving Loans
of all Non-Defaulting Banks, plus (ii) the aggregate outstanding principal
amount of Swingline Loans, plus (iii) the Letter of Credit Outstandings, is
equal to or less than the Adjusted Total Revolving Loan Commitment; and (C)
if (i) a Non-Defaulting Bank's Adjusted RL Percentage is changed pursuant to
the preceding clause (B) and (ii) any repayment of such Bank's Revolving
Loans or of Unpaid Drawings participated in by Revolving Credit Participants
or of Swingline Loans, that were made during the period commencing after the
date of the relevant Bank Default and ending on the date of such change to
its Adjusted RL Percentage must be returned to the Company as a preferential
or similar payment in any bankruptcy or similar proceeding of the Company,
then the change to such Non-Defaulting Bank's Adjusted RL Percentage effected
pursuant to said clause (B) shall be reduced to that positive change, if any,
as would have been made to its Adjusted RL Percentage if (x) such repayments
had not been made and (y) the maximum change to its Adjusted RL Percentage
would have resulted in the sum of the outstanding principal of Revolving
Loans made by such Bank plus such Bank's new Adjusted RL Percentage of the
outstanding principal amount of Swingline Loans and of Revolving Letter of
Credit Outstandings equalling such Bank's Revolving Loan Commitment at such
time.
"Adjusted Total Available Revolving Loan Commitment" shall mean at
any time the Total Available Revolving Loan Commitment at such time less the
aggregate Revolving Loan Commitments of all Defaulting Banks at such time.
"Adjusted Total Revolving Loan Commitment" shall mean at any time
the Total Revolving Loan Commitment less the aggregate Revolving Loan
Commitments of all Defaulting Banks.
"Administrative Agent" shall mean BTCo, in its capacity as
Administrative Agent for the Banks hereunder provided that (i) if BTCo shall
resign as an Agent hereunder, one of the remaining Agents (who, if there is
more than one remaining Agent, shall be selected by the then remaining
Agents) or, if there are no remaining Agents, the respective successor Agent,
shall become the replacement Administrative Agent, in each case so long as
the respective replacement Agent consents thereto, and (ii) BTCo or its
successor shall continue to act as Collateral Agent until such replacement
Administrative Agent shall have been selected.
"Affiliate" shall mean, with respect to any Person, any other
Person (including, for purposes of Section 10.07 only, all directors,
officers and partners of such Person) directly or indirectly controlling,
controlled by, or under direct or indirect common control with, such Person;
provided, however, that for purposes of Section 10.07, an Affiliate of the
- -------- -------
Company shall include any Person that directly or indirectly owns more than
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5% of any class of the capital stock of the Company and any officer or
director of the Company or any such Person. A Person shall be deemed to
control another Person if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
other Person, whether through the ownership of voting securities, by contract
or otherwise.
"Agent" shall mean each of Bankers Trust Company, Bank of America
National Trust and Savings Association and Bank of Montreal, each in its
capacity as Agent for the Banks hereunder, and shall (x) exclude any Person
which has theretofore resigned as an Agent pursuant to Section 13.09 and (y)
include any successor to any of the respective Agents appointed pursuant to
Section 13.09.
"Agreement" shall mean this Credit Agreement, as amended, modified
or supplemented from time to time.
"Applicable Commitment Commission Percentage" shall mean, at any
time, a percentage per annum equal to 1/2 of 1%; provided, that from and
--------
after the first day of any Margin Reduction Period (the "Start Date") to and
including the last day of such Margin Reduction Period (the "End Date"), the
Applicable Commitment Commission Percentage shall be 3/8 of 1% per annum if,
but only if, as of the last day of the most recent fiscal quarter ended
immediately prior to such Start Date (the "Test Date") all of the following
conditions are met:
(i) the Consolidated Interest Coverage Ratio for the Test Period
ended on such Test Date shall be greater than 3.5:1.00; and
(ii) Company Consolidated Indebtedness shall be equal to or less than
$575,000,000.
Notwithstanding anything to the contrary contained above, the Applicable
Commitment Commission Percentage shall be 1/2 of 1% per annum (x) at all
times prior to September 30, 1995 and (y) at any time that a Default or an
Event of Default shall exist.
"Applicable Margin" shall mean a percentage per annum equal to (I)
at any time prior to June 1, 1995, (i) (A) in the case of Loans other than
Tranche B Term Loans which are maintained as Base Rate Loans, 1.00% and (B)
in the case of Tranche B Term Loans which are maintained as Base Rate Loans,
1.50%, and (ii) (A) in the case of Loans other than Tranche B Term Loans
which are maintained as Eurodollar Loans, 2.25% and (B) in the case of
Tranche B Term Loans which are maintained as Eurodollar Loans, 2.75% and (II)
at any time on and after June 1, 1995, (i)(A) in the case of Loans other than
Tranche B Term Loans which are maintained as Base Rate Loans, 1.25%, less the
then applicable Interest Reduction Discount and (B) in the case of Tranche B
Term Loans which are maintained as Base Rate Loans, 1.75%, and (ii)(A) in the
case of Loans other than Tranche B Term Loans which are maintained as
Eurodollar Loans, 2.50%, less the then
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applicable Interest Reduction Discount and (B) in the case of Tranche B Term
Loans which are maintained as Eurodollar Loans, 3.00%.
"Approved Incremental Financing" shall mean additional financing
obtained by the Company in the form of (i) unsecured Indebtedness of the
Company convertible into the common stock of the Company and/or (ii)
unsecured Indebtedness; provided, that such Indebtedness shall only be deemed
--------
Approved Incremental Financing in the event, and only in the event, that (v)
such Indebtedness shall be incurred in a single transaction (including any
provisions for over-allotments, if any) and shall result in Net Cash Proceeds
equal to or in excess of $150,000,000, (w) all terms and conditions relating
to such Indebtedness shall be acceptable to the Agents, and all documentation
relating thereto shall be in form and substance satisfactory to the Agents,
(x) such Indebtedness shall have no restrictions (a) which would violate the
provisions of Section 4.5 of the Senior Note Indenture, the 2005 Senior
Unsecured Note Indenture or the Senior Subordinated Note Indenture or (b)
which would violate any term of any other Indebtedness of the Company and its
Subsidiaries which is to remain outstanding and (y) notwithstanding the
requirements of Section 4.02(d)(i), the Company shall utilize 100% of the net
cash proceeds of such Indebtedness to make mandatory prepayments of Term
Loans pursuant to Section 4.02(e).
"Available Revolving Loan Commitment" for any Bank shall mean, at
any time, the Revolving Loan Commitment of such Bank as then in effect less
such Bank's RL Percentage of the amount of the Blocked Commitment, if any, at
such time.
"BA" shall mean Bank of America National Trust and Savings
Association in its individual capacity (and shall include any local affiliate
designated by such Bank to issue Letters of Credit).
"Banesto" shall mean, collectively, Banco Espanol de Credito, S.A.
and its consolidated banks, affiliates and subsidiaries.
"Banesto Debt" shall mean the Indebtedness of the Company to
Banesto described in Part II on Schedule VI hereto and designated on a line
item as "Banesto" or "Banco de Santander."
"Banesto Debt Documents" shall mean any and all agreements,
certificates, instruments and other documentation at any time entered into by
the Tudor or any of its Subsidiaries in connection with the Banesto Debt.
"Banesto Letter of Credit" shall have the meaning provided in
Section 2.01(a)(v).
"Bank" shall mean each financial institution listed on Schedule I,
as well as any Person which becomes a "Bank" hereunder pursuant to Section
1.13 and/or 14.04(b).
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"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing
(including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.03(c) or (ii) a Bank having notified in
writing the Company and/or the Administrative Agent that it does not intend
to comply with its obligations under Section 1.01(c) or Section 2, in the
case of either clause (i) or (ii) as a result of any takeover of such Bank by
any regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 11.05.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in
excess of the Adjusted Certificate of Deposit Rate and (ii) the Prime Lending
Rate.
"Base Rate Loan" shall mean each Loan designated or deemed
designated as such by the Company at the time of the incurrence thereof or
conversion thereto.
"BIG" shall mean B.I.G. Batteries Group, Limited.
"BIG Intercompany Loans" shall have the meaning provided in Section
10.06(xiii).
"BIG Notes" shall mean the Existing Indebtedness described under
item 7 of Part I on Schedule VI.
"BIG Notes Cash Collateral" shall have the meaning provided in
Section 10.01.
"Blocked Commitment" shall mean (1) for the period from and
including the Initial Borrowing Date until the issuance of the Treasury Stock
Letter of Credit, the Tudor Convertible Bond Letter of Credit and each
Banesto Letter of Credit which is, or will be, required to be delivered to
the Seller or Banesto in accordance with the Purchase Agreement, the Initial
Blocked Commitment, (2) for the period, if any, after the issuance of each of
the Treasury Stock Letter of Credit, the Tudor Convertible Bond Letter of
Credit and each Banesto Letter of Credit required to be delivered in
accordance with the requirements of the Purchase Agreement until the Initial
Tender Offer Date, $0, (3) for the period from the Initial Tender Offer Date
until the Secondary Tender Offer Filing Date, that amount as is equal to the
Secondary Tender Offer Blocked Commitment as in effect from time to time, and
(4) for the period after the Secondary Tender Offer Filing Date, $0.
"BMO" shall mean Bank of Montreal in its individual capacity (and
shall include any local affiliate designated by such Bank to issue Letters of
Credit to be denominated in currencies other than Dollars).
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"Borrowing" shall mean the borrowing of one Type of Loan of a
single Tranche from all the Banks having Commitments of the respective
Tranche (or from BTCo in the case of Swingline Loans) on a given date (or
resulting from a conversion or conversions on such date) having in the case
of Eurodollar Loans the same Interest Period, provided that Base Rate Loans
--------
incurred pursuant to Section 1.10(b) shall be considered part of the related
Borrowing of Eurodollar Loans.
"Borrowing Base" shall mean, as at any date on which the amount
thereof is being determined, an amount equal to the sum of (x) 75% of
Eligible Receivables and (y) 60% of Eligible Inventory. The Borrowing Base
in effect at any given time shall be the Borrowing Base derived from the
Borrowing Base Certificate most recently delivered in compliance with Section
9.01(n); provided, that so long as the most recent Borrowing Base Certificate
--------
required to be delivered has not have so delivered the Borrowing Base in
effect will be zero.
"Borrowing Base Certificate" shall have the meaning provided in
Section 9.01(n).
"Borrowing Base Deficiency" shall mean, at any time, the amount, if
any, by which the sum of the aggregate principal amount of Revolving Loans
and Swingline Loans then outstanding plus the Revolving Letter of Credit
Outstandings at such time exceeds the Borrowing Base then in effect.
"Brown Battery Site" shall mean the site located in Pennsylvania as
described in footnote 14 to the financial statements prepared by Arthur
Andersen & Co. and contained in the Company's Form 10-K, dated June 22, 1994,
for the fiscal year ended March 31, 1994.
"BTCo" shall mean Bankers Trust Company in its individual capacity
(and shall include any local affiliate designated by such Bank to issue
Letters of Credit to be denominated in currencies other than Dollars).
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) above and which is also a day
for trading by and between banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
GAAP, including all such expenditures with respect to fixed or capital assets
(including, without limitation, expenditures for maintenance and repairs
which should be capitalized in
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accordance with GAAP) and the amount of Capitalized Lease Obligations
incurred by such Person. Notwithstanding to the contrary contained above,
(x) all amounts spent during the period from the Effective Date to the last
day of the Company's fiscal year ended in March, 1995 in connection with
Permitted Sales Branch Acquisitions and Permitted Acquisitions shall be
treated as Capital Expenditures, (y) all amounts spent after March 31, 1995
in connection with Permitted Acquisitions and Permitted Sales Branch
Acquisitions shall be excluded from Capital Expenditures and (z) Capital
Expenditures (determined without regard to this sentence) made in connection
with, but following, the consummation of the Schuylkill Acquisition in an
aggregate amount not to exceed $10,000,000, in each case if made prior to
March 31, 1996 and financed with Indebtedness permitted pursuant to Section
10.05(x), shall not be included as Capital Expenditures, although such
expenditures to the extent not financed with the proceeds of such
Indebtedness or (whether or not financed with the proceeds of such
Indebtedness) made after March 31, 1996 shall be included as Capital
Expenditures.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under GAAP, are or will be required to be capitalized on
the books of such Person, in each case taken at the amount thereof accounted
for as indebtedness in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or
any agency or instrumentality thereof (provided that the full faith and
--------
credit of the United States is pledged in support thereof) having maturities
of not more than one year from the date of acquisition, (ii) time deposits
and certificates of deposit of any commercial bank having, or which is the
principal banking subsidiary of a bank holding company organized under the
laws of the United States, any State thereof, the District of Columbia or any
foreign jurisdiction having capital, surplus and undivided profits
aggregating in excess of $200,000,000, with maturities of not more than one
year from the date of acquisition by such Person, (iii) repurchase
obligations with a term of not more than 90 days for underlying securities of
the types described in clause (i) above entered into with any bank meeting
the qualifications specified in clause (ii) above, (iv) commercial paper
issued by any Person incorporated in the United States rated at least A-1 or
the equivalent thereof by Standard & Poor's Corporation or at least P-1 or
the equivalent thereof by Moody's Investors Service, Inc. and in each case
maturing not more than one year after the date of acquisition by such Person,
(v) investments in money market funds substantially all of whose assets are
comprised of securities of the types described in clauses (i) through (iv)
above, (vi) demand deposit accounts maintained in the ordinary course of
business not in excess of $100,000 in the aggregate, (vii) with respect to
Foreign Subsidiaries organized under the laws of an Approved Country,
government obligations of Canada, the United Kingdom, the Kingdom of Spain
and of any other country approved by the Administrative Agent or whose debt
securities are rated by S&P and/or Moody's A-1 or P-1, or the equivalent
thereof (if a short-term debt rating is provided by either) or at least AA or
AA2, with equivalent thereof (if a long-term unsecured debt rating is
provided by either) (each such country, and "Approved Country"),
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in each case, with maturities of less than 12 months and (viii) the
investments by Foreign Subsidiaries in banks or other financial
institutions that are not otherwise provided for above to the extent
necessitated by commercial trade requirements or due to a lack of approved
bank investment alternatives as individually approved by a senior financial
officer of the Company, in each case, with maturities of less than 6
months.
"CEAc" shall mean Compagnie Europeenne d'Accumulateurs S.A., a
corporation organized under the laws of the Republic of France.
"CEAc Acquisition" shall mean the acquisition by the Company of
99.7% of the equity interests of CEAc pursuant to the CEAc Acquisition
Documents.
"CEAc Acquisition Amount" shall mean the aggregate cash
consideration (including fees and expenses payable in connection with the
CEAc Transaction, but excluding payments made in respect of intercompany
indebtedness owed by CEAc and its Subsidiaries to the CEAc Seller or any of
their respective Subsidiaries) to be paid by the Company to the CEAc Seller
in connection with the CEAc Acquisition; provided that the CEAc Acquisition
Amount shall be adjusted (upward or downward, as appropriate) by reason of
post-closing adjustments to the purchase price and any payments by the
relevant parties pursuant to claims for breach of contract or warranty or
similar claims in connection with the CEAc Acquisition.
"CEAc Acquisition Corp." shall mean Exide Holdings France, S.A.,
a corporation organized under the laws of the Republic of France.
"CEAc Acquisition Date" shall mean the date upon which the CEAc
Acquisition is consummated in accordance with the terms and conditions
contained in the CEAc Acquisition Stock Purchase Agreement and the
conditions precedent contained in Section 6A shall have been satisfied
pursuant to the terms contained therein.
"CEAc Acquisition Documents" shall mean the CEAc Acquisition
Stock Purchase Agreement, the CEAc Acquisition Warranty Agreement, the CEAc
Supply Agreements and all other documents entered into or delivered in
connection with the CEAc Acquisition Stock Purchase Agreement.
"CEAc Acquisition Intercompany Indebtedness" shall have the
meaning provided in Section 6A.09.
"CEAc Acquisition Intercompany Notes" shall have the meaning
provided in Section 6A.09.
"CEAc Acquisition Percentage" shall mean, at any time, 100% of
the amount required to be distributed; provided that in the case of
applications pursuant to Section 4.02(m) to the extent resulting from
events requiring repayments effected by non-
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Wholly-Owned Subsidiaries of CEAc Acquisition Corp., the amount to be
repatriated shall be 100% of the amount received by the respective non-
Wholly-Owned Subsidiary, after deduction for minority interests to the
extent amounts are required to be paid to such minority interest in order
to repatriate the funds to CEAc Acquisition Corp.
"CEAc Acquisition Stock Purchase Agreement" shall mean the Stock
Purchase Agreement between the Company and CEAc Seller, in form and
substance satisfactory to the Agents and the Required Banks, as the same
may be amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof.
"CEAc Acquisition Warranty Agreement" shall mean the Warranty
Agreement by and between the Company and Fiat, in form and substance
satisfactory to the Agents and the Required Banks, as the same may be
amended, modified or supplemented from time to time in accordance with the
terms hereof and thereof.
"CEAc Adjusted Consolidated Net Income" for any period shall mean
CEAc Consolidated Net Income for such period plus, without duplication, the
sum of the amount of all net non-cash charges (including, without
limitation, depreciation, amortization, deferred tax expense and non-cash
interest expense, but excluding any net non-cash charges reflected in CEAc
Adjusted Consolidated Working Capital) and net non-cash losses which were
included in arriving at CEAc Consolidated Net Income for such period less
the sum of the amount of all net non-cash gains (exclusive of items
reflected in CEAc Adjusted Consolidated Working Capital) included in
arriving at CEAc Consolidated Net Income for such period.
"CEAc Adjusted Consolidated Working Capital" at any time shall
mean CEAc Consolidated Current Assets (but excluding therefrom all cash and
Cash Equivalents) less CEAc Consolidated Current Liabilities.
"CEAc Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of CEAc Acquisition Corp. and its consolidated
Subsidiaries.
"CEAc Consolidated Current Liabilities" shall mean, at any time,
the consolidated current liabilities of CEAc Acquisition Corp. and its
consolidated Subsidiaries at such time, but excluding (i) the current
portion of any long-term Indebtedness which would otherwise be included
therein, (ii) the current portion of Indebtedness constituting Capitalized
Lease Obligations and (iii) the amount of any Indebtedness of CEAc or any
of its Subsidiaries which is owed to the Company or any of its other
Subsidiaries.
"CEAc Consolidated Net Income" shall mean, for any period, the
consolidated net after tax income of CEAc Acquisition Corp. and its
Subsidiaries determined on a consolidated basis in accordance with French
GAAP; provided that (x) to the extent that CEAc Acquisition Corp. or any of
its Subsidiaries pays any Dividends, or makes payments with respect to
Indebtedness (including without limitation the CEAc
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Acquisition Intercompany Notes) owing, to the Company or any of its
Domestic Wholly-Owned Subsidiaries (other than CEAc Acquisition Corp. and
its Subsidiaries) or any payments of management fees or other amounts are
paid to the Company or such Subsidiaries of the Company during the
respective period (but excluding all repatriations to the extent required
pursuant to Section 4.02(m)), such amounts shall be deducted (without
duplication of amounts already deducted in determining CEAc Consolidated
Net Income) in determining CEAc Consolidated Net Income (taking the Dollar
Equivalent of the amount of any such payment made in currencies other than
Dollars at the time the respective payment is made), regardless of the
treatment of such amounts under French GAAP and (y) except as provided in
preceding clause (x), CEAc Consolidated Net Income shall not be reduced by
any interest or other expenses associated with promissory notes payable by
CEAc Acquisition Corp. and/or its Subsidiaries to, or loans or advances
incurred by CEAc Acquisition Corp. and its Subsidiaries from, the Company
and its Subsidiaries.
"CEAc Divestiture Analysis" shall mean, collectively, (i) the
letter, dated February 16, 1995, from Alan Gauthier to David Bailey of
Bankers Trust Company and (ii) the letter, dated February 22, 1995, from
Alan Gauthier to David Bailey of Bankers Trust Company.
"CEAc Equity Note" shall have the meaning provided in Section
10.06(xiii).
"CEAc Excess Cash Flow" shall mean, for any period, the remainder
of (a) the sum of (i) CEAc Adjusted Consolidated Net Income for such
period, (ii) the decrease, if any, in CEAc Adjusted Consolidated Working
Capital from the first day to the last day of such period and (iii) the
aggregate Net Sale Proceeds from sales of assets (excluding sales of
inventory in the ordinary course of business) by CEAc Acquisition Corp. and
its Subsidiaries during such period to the extent the proceeds thereof were
not required to be applied pursuant to Section 4.02 and to the extent such
proceeds are not already reflected in CEAc Adjusted Consolidated Net Income
for such period, minus (b) the sum of (i) the amount of Capital
Expenditures made by CEAc Acquisition Corp. and its Subsidiaries on a
consolidated basis during such period pursuant to and in accordance with
Section 10.08(b)(i) and (ii) (but not including Capital Expenditures made
pursuant to Section 10.08(b)(iii)), except to the extent financed with the
proceeds of Indebtedness or pursuant to Capitalized Lease Obligations, (ii)
the aggregate amount of permanent principal payments of Indebtedness for
borrowed money of CEAc Acquisition Corp. and its Subsidiaries and the
permanent principal payments of Indebtedness for borrowed money of CEAc
Acquisition Corp. and its Subsidiaries and the permanent repayment of the
principal component of Capitalized Lease Obligations of CEAc Acquisition
Corp. and its Subsidiaries (excluding payments with proceeds of asset sales
or Indebtedness and excluding payments of Indebtedness to the Company or
any of its Subsidiaries) and (iii) the increase, if any, in CEAc Adjusted
Consolidated Working Capital from the first day to the last day of such
period. The foregoing calculation (and all components as used therein)
shall be made in French Francs; provided that the amount of CEAc Excess
Cash Flow for any Excess Cash
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Payment Period shall be the Dollar Equivalent of the amount so determined,
with the calculation of the Dollar Equivalent of such amount to be made on
the respective Excess Cash Payment Date.
"CEAc Existing Indebtedness" shall have the meaning provided in
Section 6A.09.
"CEAc 1994 Consolidated Financial Statements" shall mean the
"1994 CEAc Financial Statements" as defined in the CEAc Acquisition
Warranty Agreement.
"CEAc 1993 Consolidated Financial Statements" shall mean the
"1993 CEAc Financial Statements" as defined in the CEAc Acquisition
Warranty Agreement.
"CEAc Projections" shall have the meaning provided in Section
6A.13.
"CEAc Refinancing" shall have the meaning provided in Section
6A.09.
"CEAc Refinancing Amount" shall mean an amount equal to the
amount of Indebtedness of CEAc to be assumed and/or refinanced in
connection with the CEAc Acquisition.
"CEAc Refinancing Credit Facility" shall have the meaning
provided in Section 6A.09.
"CEAc Refinancing Documents" shall have the meaning provided in
Section 6A.09.
"CEAc Restructuring" shall have the meaning provided in the
recitals to the Eighth Amendment.
"CEAc Restructuring Date" shall have the meaning provided in
Section I(1) of the Eighth Amendment.
"CEAc Seller" shall collectively mean Fiat and Sicind SpA, an
Italian corporation which is a wholly-owned subsidiary of Fiat.
"CEAc Shares" shall mean the shares of capital stock of CEAc.
"CEAc Supply Agreements" shall mean the long-term supply
agreements entered into in the form of Schedule 6.1.8 and 6.1.9 to the CEAc
Acquisition Stock Purchase Agreement, as same may thereafter be amended,
modified or supplemented from time to time in accordance with the terms
hereof and thereof.
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"CEAc Transaction" shall mean, collectively, the CEAc
Acquisition, the CEAc Refinancing, the Subject Shares Issuance, the 2005
Senior Unsecured Notes Issuance and the payment of all fees and expenses in
connection therewith.
"CEAc US Holdco" shall mean Exide International, Inc., a Delaware
corporation.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from
time to time, 42 U.S.C. (S) 9601 et seq.
-- ---
"Change of Control" shall mean at any time (i) a "Change of
Control" under and as defined in the Senior Note Indenture or the Senior
Subordinated Note Indenture shall have occurred; (ii) (y) any "Person" or
"group" (as such terms are used in Sections 13(d) and 14(d of the Exchange
Act), is or becomes the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of 20% or more on
a fully diluted basis of the voting and economic interests of the Company
or shall have the right to elect a majority of the directors of the Company
or (iii) the Board of Directors of the Company shall cease to consist of a
majority of Continuing Directors.
"Clean-Down Period" shall mean any period of 30 consecutive days
during the period beginning January 1 and terminating March 31 of each
calendar year, during which no more than $20,000,000 in aggregate principal
amount of Revolving Loans and Swingline Loans shall be outstanding.
"CNMV" shall have the meaning provided in Section 5.08.
"Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, and the regulations promulgated and the rulings issued
thereunder. Section references to the Code are to the Code, as in effect at
the date of this Agreement and any subsequent provisions of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal)
with respect to which any security interests have been granted (or
purported to be granted) pursuant to any Security Document, including,
without limitation, all Pledge Agreement Collateral, all Security Agreement
Collateral, all Mortgaged Properties, all cash and Cash Equivalents de
livered as collateral pursuant to Section 4.02 or 11 hereof and all
Additional Collateral, if any. Without limiting the foregoing, the term
"Collateral" includes all Restricted Collateral and all Unrestricted
Collateral.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security
Documents.
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"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.05.
"Combined Consolidated EBIT" shall mean, for any period, Combined
Consolidated Net Income, before Combined Consolidated Interest Expense and
provision for taxes and without giving effect to any extraordinary gains or
losses or gains or losses from sales of assets other than inventory sold in
the ordinary course of business.
"Combined Consolidated EBITDA" shall mean, for any period,
Combined Consolidated EBIT, adjusted by adding thereto the amount of all
amortization of intangibles and depreciation, in each case that were
deducted in arriving at Combined Consolidated EBIT for such period.
Notwithstanding anything to the contrary contained above or elsewhere in
this Agreement, in calculating Combined Consolidated EBITDA (x) so long as
the Company continues to own at least 89% of the fully diluted equity of
Tudor, Tudor shall be included as a Wholly-Owned Subsidiary of the Company
acquired on October 1, 1994 and (y) from and after the CEAc Acquisition
Date and so long as the Company directly or indirectly owns at least 99.7%
of the fully-diluted equity of CEAc, CEAc shall be treated as a Wholly-
Owned Subsidiary of the Company acquired on April 1, 1994.
"Combined Consolidated Indebtedness" shall mean, at any time, all
Indebtedness of the Company and its Subsidiaries (including Tudor and its
Subsidiaries and, from and after the CEAc Acquisition Date, CEAc
Acquisition Corp. and its Subsidiaries) determined on a consolidated basis
required to be accounted for as debt in accordance with GAAP; provided that
(x) the aggregate Letter of Credit Outstandings at any time (without
duplication of any underlying supported Indebtedness already included in
Combined Consolidated Indebtedness) shall be included as a component of
Combined Consolidated Indebtedness (and shall thereby increase same by the
amount of such Letter of Credit Outstandings, regardless of whether a
different treatment is required in accordance with GAAP), (y) at any time,
the amount of Receivables Facility Attributed Indebtedness shall be treated
as Combined Consolidated Indebtedness regardless of whether a different
treatment is required in accordance with GAAP and (z) to the extent the BIG
Notes are collateralized by cash or Cash Equivalents, such amount shall not
be included in Combined Consolidated Indebtedness regardless of whether a
different treatment is required in accordance with GAAP.
"Combined Consolidated Interest Expense" shall mean, for any
period, the total consolidated cash interest expense of the Company and its
Subsidiaries (including CEAc Acquisition Corp. and its Subsidiaries, on the
same basis as is provided in the last sentence of the definition of
Combined Consolidated EBITDA) for such period plus, without duplication,
that portion of Capitalized Lease Obligations of the Company and its
Subsidiaries (including CEAc Acquisition Corp. and its Subsidiaries)
representing the interest factor (except to the extent not payable in cash)
for such period, in each case net of the total consolidated cash interest
income of the Company and its Subsidiaries (including CEAc Acquisition
Corp. and its Subsidiaries) for such period, but excluding the
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amortization of any deferred financing costs incurred in connection with
this Agreement, all determined on a combined basis; provided that in
determining Combined Consolidated Interest Expense (x) all fees, service
charges and other costs, as well as all collections or other amounts
retained by the Receivables Financier which are in excess of amounts paid
to the Company by it for the purchase of receivables pursuant to the
Receivables Facility, shall be treated as interest expense of the Company
regardless of the treatment of such amounts under GAAP and (y) such
interest expense shall be determined after giving effect to any Interest
Rate Protection or Other Hedging Agreements then in effect.
"Combined Consolidated Net Income" shall mean, for any period,
the consolidated net after tax income of the Company and its Subsidiaries
(including Tudor and its Subsidiaries and, if the CEAc Acquisition Date has
occurred, including CEAc Acquisition Corp. and its Subsidiaries, on the
same basis as is provided in the last sentence of the definition of
Combined Consolidated EBITDA) determined on a consolidated basis in
accordance with GAAP.
"Commitment" shall mean any of the commitments of any Bank, i.e.
----
whether the Tranche A Term Loan Commitment, Tranche B Term Loan Commitment,
Tranche C Term Loan Commitment or Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Company" shall have the meaning provided in the first paragraph
of this Agreement.
"Company Adjusted Consolidated Net Income" for any period shall
mean Company Consolidated Net Income for such period plus, without
duplication, the sum of the amount of all net non-cash charges (including,
without limitation, depreciation, amortization, deferred tax expense and
non-cash interest expense, but excluding any net non-cash charges reflected
in Company Adjusted Consolidated Working Capital) and net non-cash losses
which were included in arriving at Company Consolidated Net Income for such
period less the sum of the amount of all net non-cash gains (exclusive of
items reflected in Company Adjusted Consolidated Working Capital) included
in arriving at Company Consolidated Net Income for such period.
"Company Adjusted Consolidated Working Capital" at any time shall
mean Company Consolidated Current Assets (but excluding therefrom all cash
and Cash Equivalents) less Company Consolidated Current Liabilities.
"Company Consolidated Current Assets" shall mean, at any time,
the consolidated current assets of the Company and its consolidated
Subsidiaries (excluding Tudor and its Subsidiaries and, from and after the
CEAc Acquisition Date, CEAc Acquisition Corp. and its Subsidiaries).
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"Company Consolidated Current Liabilities" shall mean, at any
time, the consolidated current liabilities of the Company and its
consolidated Subsidiaries (excluding Tudor and its Subsidiaries and, from
and after the CEAc Acquisition Date, CEAc Acquisition Corp. and its
Subsidiaries) at such time, but excluding (i) the current portion of any
Indebtedness under this Agreement and any other long-term Indebtedness
which would otherwise be included therein and (ii) the current portion of
Indebtedness constituting Capitalized Lease Obligations.
"Company Consolidated EBIT" shall mean, for any period, the
Company Consolidated Net Income, before Company Consolidated Interest
Expense of the Company and provision for taxes and without giving effect to
any extraordinary gains or losses or gains or losses from sales of assets
other than inventory sold in the ordinary course of business.
"Company Consolidated EBITDA" shall mean, for any period, Company
Consolidated EBIT, adjusted by adding thereto the amount of all
amortization of intangibles and depreciation, in each case that were
deducted in arriving at Company Consolidated EBIT for such period.
"Company Consolidated Fixed Charges" for any period shall mean
the sum, without duplication, of (i) Company Consolidated Interest Expense
for such period and (ii) the aggregate scheduled principal amount of all
amortization payments on all Indebtedness (but excluding Scheduled Repayments
and any payments which will be owing as a result of reductions, including
Scheduled Commitment Reductions, to the Total Revolving Loan Commitment) of
the Company and its Subsidiaries (other than CEAc Acquisition Corp. and its
Subsidiaries) for such period (as determined on the first day of the
respective period).
"Company Consolidated Indebtedness" shall mean, at any time, all
Indebtedness of the Company and its Subsidiaries (excluding (x) CEAc
Acquisition Corp. and its Subsidiaries and (y) for the purpose of
determining compliance with Section 10.11(a)(ii) only, the Approved
Incremental Financing (after the consummation thereof)) determined on a
consolidated basis required to be accounted for as debt in accordance with
GAAP; provided that (x) the aggregate Letter of Credit Outstandings at any
time (but excluding the Stated Amount of any outstanding Banesto Letters of
Credit) shall be included (without duplication of any underlying supported
Indebtedness already included in Company Consolidated Indebtedness) as a
component of Company Consolidated Indebtedness (and shall thereby increase
same by the amount of such Letter of Credit Outstandings, regardless of
whether a different treatment is required in accordance with GAAP), (y) at
any time, the amount of Receivables Facility Attributed Indebtedness shall
be treated as Company Consolidated Indebtedness regardless of whether a
different treatment is required in accordance with GAAP and (z) to the
extent the BIG Notes are collateralized by cash or Cash Equivalents, such
amount shall not be included in Company Consolidated Indebtedness
regardless of whether a different treatment is required in accordance with
GAAP.
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"Company Consolidated Interest Expense" shall mean, for any
period, the total consolidated interest expense of the Company and its
Subsidiaries (excluding CEAc Acquisition Corp. and its Subsidiaries) for
such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, that portion of Capitalized Lease
Obligations of the Company and its Subsidiaries (excluding CEAc Acquisition
Corp. and its Subsidiaries) representing the interest factor for such
period, in each case net of the total consolidated cash interest income
(excluding any such interest income in respect of promissory notes payable
by, or in respect of loans or advances made to, CEAc Acquisition Corp. and
its Subsidiaries) of the Company and its Subsidiaries (excluding CEAc
Acquisition Corp. and its Subsidiaries) for such period, but excluding (A)
for the purpose of determining compliance with Section 10.09 only, (x) the
amortization of any deferred financing costs and (y) accrued interest
expense on the Senior Subordinated Notes to the extent, and only to the
extent, such interest is not required to be paid during such period and (B)
for all other purposes, the amortization of any deferred financing costs
incurred in connection with this Agreement, all determined on a combined
basis; provided that in determining Company Consolidated Interest Expense
(w) CEAc Acquisition Corp. and its Subsidiaries shall be excluded (and
shall not be treated as Subsidiaries of the Company); (x) all Letter of
Credit Fees paid by the Company shall be treated as interest expense of the
Company regardless of the treatment of such fees under GAAP; (y) all fees,
service charges and other costs, as well as all collections or other
amounts retained by the Receivables Financier which are in excess of
amounts paid to the Company by it for the purchase of receivables pursuant
to the Receivables Facility, shall be treated as interest expense of the
Company regardless of the treatment of such amounts under GAAP and (z) such
interest expense shall be determined after giving effect to any Interest
Rate Protection or Other Hedging Agreements then in effect.
"Company Consolidated Net Income" shall mean, for any period, the
consolidated net after tax income of the Company and its Subsidiaries
(other than CEAc Acquisition Corp. and its Subsidiaries) determined on a
consolidated basis in accordance with US GAAP; provided that (x) except as
provided below in clause (y), all net income of CEAc Acquisition Corp. and
its Subsidiaries shall be excluded, (y) for the purpose of determining
compliance with Section 10.09 only, to the extent that the Company or any
of its Domestic Wholly-Owned Subsidiaries receives any payments of
Dividends from CEAc Acquisition Corp., any payments from CEAc Acquisition
Corp. and its Subsidiaries in respect of principal or interest on
intercompany loans extended prior to the Ninth Amendment Effective Date by
the Company or its Domestic Wholly-Owned Subsidiary to such Persons or any
payments of management fees or other amounts from CEAc Acquisition Corp.
and its Subsidiaries during the respective period, such amounts (except
that no such amounts paid pursuant to Section I(1)(vi) of the Ninth
Amendment shall be so included) shall be included (without duplication of
amounts already included therein) in Company Consolidated Net Income
(taking the Dollar Equivalent of the amount of any such payments made in
currencies other than Dollars at the time the respective payment is made),
regardless of the treatment of such amounts under US GAAP and (z) Company
Consolidated Net Income shall not include any amounts representing interest
accrued (which
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has not been paid in cash) on promissory notes payable to the Company and
its Subsidiaries by, or loans and/or advances made by the Company and its
Subsidiaries to, CEAc Acquisition Corp. or its Subsidiaries.
"Company Excess Cash Flow" shall mean, for any period, the
remainder of (a) the sum of (i) Company Adjusted Consolidated Net Income
for such period, (ii) the decrease, if any, in Company Adjusted
Consolidated Working Capital from the first day to the last day of such
period and (iii) the aggregate Net Sale Proceeds from the sales of assets
(excluding sales of inventory in the ordinary course of business) by the
Company and its Subsidiaries (other than Tudor, CEAc Acquisition Corp. and
their respective Subsidiaries) during such period to the extent the
proceeds thereof were not required to be applied pursuant to Section 4.02
and to the extent such proceeds are not already reflected in Company
Adjusted Consolidated Net Income for such period, minus (b) the sum of (i)
the amount of Capital Expenditures made by the Company and its Subsidiaries
(other than Tudor, CEAc Acquisition Corp. and their respective
Subsidiaries) on a consolidated basis during such period pursuant to and in
accordance with Section 10.08(a)(i) or (ii), except to the extent financed
with the proceeds of Indebtedness or pursuant to Capitalized Lease
Obligations, (ii) the aggregate amount of permanent principal payments of
Indebtedness for borrowed money of the Company and its Subsidiaries (other
than Tudor, CEAc Acquisition Corp. and their respective Subsidiaries) and
the permanent principal payments of Indebtedness for borrowed money of the
Company and its Subsidiaries (other than Tudor, CEAc Acquisition Corp. and
their respective Subsidiaries) and the permanent repayment of the principal
component of Capitalized Lease Obligations of the Company and its
Subsidiaries (other than Tudor, CEAc Acquisition Corp. and their respective
Subsidiaries) (excluding (1) payments with proceeds of asset sales, (2)
payments pursuant to the CEAc Refinancing or with the proceeds of other
Indebtedness or equity, (3) payments to Tudor, CEAc Acquisition Corp. and
their respective Subsidiaries and (4) payments of Loans or other
Obligations, provided that repayments of Loans shall be deducted in
--------
determining Company Excess Cash Flow if such repayments were (x) required
as a result of a Scheduled Repayment under Section 4.02(b), (c) or (n) (but
not as a reduction to the amount of Scheduled Repayments pursuant to
another provision of this Agreement) or (y) made as a voluntary prepayment
pursuant to Section 4.01 with internally generated funds (but in the case
of a voluntary prepayment of Revolving Loans, only to the extent
accompanied by a voluntary reduction to the Total Revolving Loan
Commitment)) during such period, (iii) the increase, if any, in Company
Adjusted Consolidated Working Capital from the first day to the last day of
such period and (iv) the aggregate amount of Dividends paid by the Company
during such period pursuant to Section 10.03(iv). Notwithstanding anything
to the contrary contained above, to the extent that any Environmental
Insurance Recoveries would otherwise be included in Company Excess Cash
Flow, such amounts shall be excluded therefrom.
"Company Retained Excess Cash Flow Amount" shall initially be $0,
which amount shall be (x) increased on each Excess Cash Payment Date, so
long as any repayment required pursuant to Section 4.02(g)(i) has been
made, by an amount equal to
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the Retained Excess Cash Flow Percentage of Company Excess Cash Flow for
the immediately preceding Excess Cash Payment Period and (y) decreased (i)
on each Excess Cash Payment Date where Company Excess Cash Flow for the
immediately preceding Excess Cash Payment Period is a negative amount, by
such amount, (ii) at the time any Capital Expenditure is made pursuant to
Section 10.08(a)(iii)(x), by the amount thereof, (iii) at the time any
Permitted Acquisition is made after March 31, 1996, by the amount of cash
expended (except to the extent representing retained proceeds of common
stock issuances by the Company), and the principal amount of Acquired
Indebtedness incurred or assumed by the Company and its Subsidiaries, in
connection therewith, (iv) on the date any Dividend is paid pursuant to
Section 10.03(v), by the amount thereof and (v) at the time any Permitted
Sales Branch Acquisition is made after March 31, 1996, by the amount of
cash expended in connection therewith.
"Consent Solicitation" shall have the meaning provided in Section
6A.18.
"Consolidated Fixed Charge Coverage Ratio" for any period shall
mean the ratio of (x) Company Consolidated EBITDA less the amount of all
Capital Expenditures made by the Company and its Subsidiaries (other than
CEAc Acquisition Corp. and its Subsidiaries, and excluding Capital
Expenditures made to effect the Acquisition or the CEAc Acquisition) for
such period to (y) Company Consolidated Fixed Charges for such period.
"Consolidated Interest Coverage Ratio" shall mean, for any
period, the ratio of (x) Company Consolidated EBITDA for such period to (y)
Company Consolidated Interest Expense for such period.
"Consolidated Net Tangible Asset Amount" shall initially mean $43
million; provided that at the time of the delivery of any certificate
pursuant to Section 9.01(m) which shows that 10% of Consolidated Net
Tangible Assets (as defined in the Senior Note Indenture) is in excess of
$40 million, the Consolidated Net Tangible Asset Amount shall thereafter
(until the delivery of the next such certificate) be equal to the greater
of (x) the Consolidated Net Tangible Asset Amount as theretofore in effect
or (y) 9.9% of the amount of Consolidated Net Tangible Assets as shown in
the officer's certificate last delivered pursuant to Section 9.01(m).
"Contingent Lead Note" shall mean the unsecured promissory note
of Exide issued by it as partial consideration in connection with the
Schuylkill Acquisition, which promissory note shall be as described in
Section 1.4(b) of the Schuylkill Purchase Agreement attached as part of
Annex II to the Eighth Amendment.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary
obligations") of any other Person (the "primary obligor") in any manner,
whether directly or indirectly, including, without limitation, any
obligation of such
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Person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (x) for the purchase or payment
of any such primary obligation or (y) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
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endorsements of instruments for deposit or collection in the ordinary
course of business. The amount of any Contingent Obligation shall be deemed
to be an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made (or, if
the less, the maximum amount of such primary obligation for which such
Person may be liable pursuant to the terms of the instrument evidencing
such Contingent Obligation) or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person
is required to perform thereunder) as determined by such Person in good
faith.
"Continuing Directors" shall mean the directors of the Company on
the Effective Date and each other director, if such director's nomination
for election to the Board of Directors of the Company is recommended by a
majority of the then Continuing Directors.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement,
each Note, each Security Document, the Domestic Subsidiaries Guaranty, the
Tudor Guaranty and, after the execution and delivery thereof, each
additional guaranty or security document executed pursuant to Section 9.11
and Section 9.12.
"Credit Event" shall mean the making of any Loan or the issuance
of any Letter of Credit.
"Credit Party" shall mean the Company and each Guarantor.
"Currency Hedging Agreements" shall mean any foreign exchange
contract, currency swap agreement, futures contract, option contract,
synthetic cap or other similar agreement designed to protect the Persons
entering into same against fluctuations in currency values.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
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"Dividend" with respect to any Person shall mean that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders or authorized or made any other distribution, payment or
delivery of property (other than common stock of such Person) or cash to
its stockholders as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for a consideration any shares of any
class of its capital stock outstanding on or after the Effective Date (or
any options or warrants issued by such Person with respect to its capital
stock), or set aside any funds for any of the foregoing purposes, or shall
have permitted any of its Subsidiaries to purchase or otherwise acquire for
a consideration any shares of any class of the capital stock of such Person
outstanding on or after the Effective Date (or any options or warrants
issued by such Person with respect to its capital stock). Without limiting
the foregoing, "Dividends" with respect to any Person shall also include
all payments made or required to be made by such Person with respect to any
stock appreciation rights, plans, equity incentive or achievement plans or
any similar plans or setting aside of any funds for the foregoing purposes.
"Documents" shall mean the Credit Documents, the Acquisition
Documents, the CEAc Acquisition Documents and the Tender Offer Documents.
"Dollar Equivalent" shall mean, with respect to any currency
other than Dollars, the amount of Dollars into which such currency could be
converted at the Exchange Rate.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiaries Guaranty" shall have the meaning provided
in Section 5.11.
"Domestic Subsidiary" shall mean each Subsidiary of the Company
which is not a Foreign Subsidiary.
"Domestic Subsidiary Guarantor" shall mean each Domestic
Subsidiary of the Company which has executed the Domestic Subsidiaries
Guaranty or a counterpart thereof.
"Domestic Wholly-Owned Subsidiary" shall mean each Domestic
Subsidiary which is a Wholly-Owned Subsidiary of the Company.
"Drawing" shall have the meaning provided in Section 2.04(b).
"Due Diligence Reports" shall mean, collectively, the due
diligence reports prepared in connection with the CEAc Acquisition by (i)
Lovell White Durrant, (ii) Loeff Claeys Verbeke, (iii) Gide Loyrette Nouel,
(iv) De Bandt, Van Hecke & Lagae, (v) Heller, Lober, Bahn & Partners, (vi)
Gorrissen & Federspiel, (vii) Gianni, Origoni & Partners,
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(viii) Zeyen Beghin Feider, (ix) Bruckhaus Westrick Stegemann, (x)
Wiersholm, Mellbye & Bech, (xi) Poroy & Ozulku, (xii) Lagerlof & Leman and
(xiii) J&H Garrigues, and any other due diligence report, other than an
Environmental Report, prepared by counsel in connection with the CEAc
Acquisition.
"Effective Date" shall have the meaning provided in Section
14.10.
"Eighth Amendment" shall mean the Eighth Amendment, Consent and
Agreement, dated as of August 17, 1995, to this Agreement.
"Eighth Amendment Effective Date" shall have the meaning provided
in Section IV(4) of the Eighth Amendment.
"Eleventh Amendment" shall mean the Eleventh Amendment, Consent,
Waiver and Agreement, dated as of May 17, 1996, to this Agreement.
"Eleventh Amendment Effective Date" shall have the meaning
provided in the Eleventh Amendment.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Eligible Inventory" shall mean the gross dollar value (valued at
the lower of cost (determined on a first in-first out basis) or market
value) of the inventory of the Company and its Domestic Wholly-Owned
Subsidiaries which are party to the Security Agreement which conforms to
the representations and warranties contained in the Security Agreement
including, without limitation, that the Collateral Agent shall have and
maintain, for the benefit of the Secured Creditors, a first priority
perfected security interest in all such inventory, which inventory
constitutes raw materials, work-in-progress or finished goods and which is
not, in the Company's good faith opinion and consistent with past practice,
excess, obsolete or unmerchantable, less (i) any supplies (other than raw
materials), spare parts and goods returned to suppliers, (ii) inventory
subject to any Lien other than the Liens created under the Security
Documents or (iii) any market reserves maintained by the Com pany and its
Subsidiaries.
"Eligible Receivables" shall mean the total face amount of the
receivables of the Company and its Domestic Wholly-Owned Subsidiaries which
are party to the Security Agreement (excluding receivables which are in any
way subject to the Receivables Facility) which conform to the
representations and warranties contained in the Security Agreement
(including, without limitation, that the Collateral Agent shall have and
maintain, for the benefit of the Secured Creditors, a first priority
perfected security interest in all such receivables), and at all times
continue to be acceptable to the Collateral Agent in its reason able
judgment less any returns, discounts, claims, credits and allowances of any
nature (whether issued, owing, granted or outstanding) and less reserves
for any other matter
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affecting the creditworthiness of account debtors with respect to the
receivables and excluding (i) bill and hold (deferred shipment)
transactions, (ii) contracts or sales to any Affiliate of the Company or
any governmental entity, (iii) all receivables which have not been paid in
full within 90 days after the due date thereof or the amount of such
receivables which have been disputed by the account debtor, (iv) sales to
account debtors residing or located outside the United States, (v)
receivables of any account debtor with respect to which any action or event
of the types described in Section 11.05 has occurred, (vi) receivables of
any account debtor of which 50% or more of the aggregate outstanding
receivables of such account debtor owed to the Company and its Domestic
Wholly-Owned Subsidiaries would be excluded pursuant to clause (iii), (vii)
receivables of any account debtor arising out of a consignment arrangement
and (viii) to the extent that the receivables of any account debtor exceed
20% of the total outstanding receivables of all account debtors owed to the
Company and its Domestic Wholly-Owned Subsidiaries, the receivables of such
account debtor in excess of such 20%.
"Employee Benefit Plans" shall have the meaning provided in
Section 5.05.
"Employment Agreements" shall have the meaning provided in
Section 5.05.
"End Date" shall have the meaning provided in the definition of
Applicable Commitment Commission Percentage.
"Engitec Equipment Commitments" shall mean financing commitments
for the purchase of Engitec processing equipment by SMC and/or SHI, which
in no event shall exceed (or require expenditures pursuant thereto in
excess of) $10,000,000.
"Environmental Claims" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of non compliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit
issued, or any approval given, under any such Environmental Law (hereafter,
"Claims"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief in connection with alleged injury or threat of injury to
health, safety or the environment due to the presence of Hazardous
Materials.
"Environmental Insurance Recoveries" shall mean any recoveries
(whether consisting of payments of claims or amounts received pursuant to,
or in settlement of, litigation) from insurance carriers representing
amounts asserted as owing to the Company or its Subsidiaries under
insurance policies in respect of environmental claims or liabilities.
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"Environmental Law" means any applicable Federal, state, foreign
or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy and rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial
or administrative order, consent decree or judgment, to the extent binding
on the Company or any of its respective Subsidiaries, relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act,
33 U.S.C. (S) 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. (S)
-- ----
2601 et seq.; the Clean Air Act, 42 U.S.C. (S) 7401 et seq.; the Safe
-- ---- -- ----
Drinking Water Act, 42 U.S.C. (S) 3803 et seq.; the Oil Pollution Act of
-- ----
1990, 33 U.S.C. (S) 2701 et seq.; the Emergency Planning and the Community
-- ----
Right-to-Know Act of 1986, 42 U.S.C. (S) 11001 et seq., the Hazardous
-- ----
Material Transportation Act, 49 U.S.C. (S) 1801 et seq. and the
-- ----
Occupational Safety and Health Act, 29 U.S.C. (S) 651 et seq. (to the
-- ----
extent it regulates occupational exposure to Hazardous Materials); and any
state and local or foreign counterparts or equivalents, in each case as
amended from time to time.
"Environmental Report" shall mean, collectively, the following
environmental reports prepared in connection with the CEAc Acquisition: (i)
Environmental Audit at the CEAc Auxerre Site prepared by Dames & Moore
dated January 12, 1995; (ii) Environmental Audit at the CEAc Clichy Site
prepared by Dames & Moore dated January 11, 1995; (iii) Environmental Audit
at the CEAc Lille Site prepared by Dames & Moore dated January 11, 1995;
(iv) Environmental Audit at the CEAc Nanterre Site prepared by Dames &
Moore dated January 12, 1995; (v) Environmental Audit at the CEAc Nimes
Site prepared by Dames & Moore dated January 11, 1995; (vi) Environmental
Audit at the CEAc Peronne Site prepared by Dames & Moore dated January 11,
1995; (vii) Environmental Audit at the CEAc Group GAST Site, Pont-Sainte-
Maxence, prepared by Dames & Moore dated January 12, 1995; (viii)
Environmental Audit at the CEAc Vierzon Site prepared by Dames & Moore
dated January 10, 1995; (ix) Legal Assessment of Environmental Situation at
CEAc Facilities in France prepared by Gide Loyrette Nouel dated January 16,
1995; (x) Environmental Due Diligence Report: Accumulateurs Tudor (Belgium)
prepared by ERM Belgium dated January 1995; (xi) Environmental Due
Diligence Report: CMP Batterijen (Mortsel) prepared by ERM Belgium dated
January 1995; (xii) Environmental Due Diligence Report: prepared by De
Bandt, Van Hecke & Lague dated January 9, 1995 and supplemented January 17,
1995; (xiii) Phase I Environmental Site Assessment AS GmbH Werk Weiden
prepared by Fugro-Ecolyse B.V. dated January 1995; (xiv) Phase I
Environmental Site Assessment Sonnenschein Lithium GmbH (Budingen) prepared
by Fugro-Ecolyse B.V. dated January 1995; (xv) Phase I Environmental Site
Assessment AS GmbH Hauptverwaltung und Werk Budingen (Thiergarten) prepared
by Fugro-Ecolyse B.V. dated January 1995; (xvi) Environmental Audit Report
prepared by Bruckhaus Westrick Stegemann dated January 13, 1995; (xvii)
Environmental Due Diligence Report: CGA - Casalnuovo Plant, Italy prepared
by ERM Italia s.r.l. dated January 1995; (xviii) Environmental Due
Diligence Report: SINAC, Romano di Lombardia Plant, Italy prepared by ERM
Italia s.r.l. dated November 1994; (xix) Environmental Due Diligence
Report: F.A.Y. - Fumane Plant, Italy prepared by ERM
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Italia s.r.l. dated November 1994; (xx) Environmental Legal Audit prepared
by Gianni, Origoni & Partners dated January 13, 1995; (xxi) Draft Report
Phase I Environmental Site Assessment CMP Batterijen B.V. (Vlaardingen)
prepared by Fugro-Ecolyse B.V. dated January 1995; (xxii) Due Diligence
Report prepared by Loeff Claeys Verbeke dated January 13, 1995; (xxiii)
Phase I Environmental, Health & Safety Audit: Centra S.A., Poznan, Poland,
prepared by ERM Polska dated January 1995; (xxiv) Phase I Environmental,
Health & Safety Audit: Centra S.A. Czarnkow, Poland, prepared by ERM Polska
dated January 1995; (xxv) Environmental Due Diligence Report prepared by
Gide Loyrette Nouel dated January 1995; (xxvi) Environmental Health &
Safety Audit of CMP Limited prepared by Environmental Resources Management
dated January 1995; and (xxvii) Environmental Audit Report prepared by
Lovell White Durrant dated January 10, 1995, and any other environmental
report prepared in connection with the CEAc Acquisition.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section
3(9) of ERISA) which together with the Company or any Subsidiary of the
Company would be deemed to be a "single employer" (i) within the meaning of
Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the
Company or a Subsidiary of the Company being or having been a general
partner of such person.
"Escudos" shall mean the freely transferable lawful money of
Portugal.
"Euro Exide" means Euro Exide, Ltd.
"Eurodollar Loan" shall mean each Loan designated as such by the
Company at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-
class banks in the New York interbank Eurodollar market by BTCo for Dollar
deposits of amounts in immediately available funds comparable to the
outstanding principal amount of the Eurodollar Loan of BTCo with maturities
comparable to the Interest Period applicable to such Eurodollar Loan
commencing two Business Days thereafter as of 10:00 A.M. (New York time) on
the date which is two Business Days prior to the commencement of such
Interest Period, divided (and rounded off to the nearest 1/16 of 1%) by (b)
a percentage equal to 100% minus the then stated maximum rate of all
reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves required by applicable
law) applicable to any member bank of the Federal Reserve System in respect
of Eurocurrency funding or liabilities as defined in Regulation D (or any
successor category of liabilities under Regulation D).
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"Evanite" shall mean Evanite Fiber Corporation.
"Event of Default" shall have the meaning provided in Section 11.
"Excess Cash Flow Percentage" shall mean a percentage which shall
be equal to 75%; provided that if on the relevant Excess Cash Payment Date
the Interest Reduction Discount then in effect is 1/2 of 1% or greater,
then the Excess Cash Flow Percentage for the respective Excess Cash Payment
Date and Excess Cash Payment Period shall instead be 50%.
"Excess Cash Payment Date" shall mean the date occurring 95 days
after the last day of each fiscal year of the Company (beginning with its
fiscal year ended March 31, 1996).
"Excess Cash Payment Period" shall mean with respect to the
repayment required on each Excess Cash Payment Date, (x) in the case of
Company Excess Cash Flow, the immediately preceding fiscal year of the
Company, (y) in the case of Tudor Excess Cash Flow, the period of four
consecutive fiscal quarters (taken as one accounting period) ended closest
to the immediately preceding March 31 and (z) in the case of CEAc Excess
Cash Flow, the period of four consecutive (taken as one accounting period
and including the whole of such period, even if a portion thereof occurs
prior to the CEAc Acquisition Date) ended closest to the immediately
preceding March 31.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Rate" shall mean, when converting any amount
denominated in a currency (the "First Currency") into another currency (the
"Second Currency"), the rate determined in good faith by the Administrative
Agent at the opening of business (or close of business in the case of
determinations of reimbursement obligations with respect to Drawings) in
New York, on the date as to which any determination thereof is to be made,
as the spot rate at which such First Currency is offered for sale to the
Administrative Agent against delivery of the Second Currency by the
Administrative Agent. If for any reason the Exchange Rate for any currency
cannot be calculated as provided above, the Administrative Agent shall
calculate the Exchange Rate on such basis as it deems fair and equitable.
In determining the Stated Amount of any Letter of Credit denominated in a
currency other than Dollars, the Stated Amount thereof shall be determined
by converting any currency other than Dollars into Dollars, with (A) for
purposes of Sections 1.01(c), 1.01(d), 2.01(d) and 4.02(a), the Exchange
Rate to be calculated (x) on the date of the issuance of such Letter of
Credit, and (y) on the first Business Day of each calendar month thereafter
and (B) for purposes of Section 3.01, the Exchange Rate shall be calculated
on the first day of each month in the quarterly period in which the
respective payment is due pursuant to said Sections. The Exchange Rate for
all reimbursement obligations with respect to Letters of Credit (including,
without limitation, pursuant to Sections 2.04 and
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2.05) shall be determined by using the Exchange Rate for conversion of any
currency other than Dollars into Dollars as in effect on the date the
respective Unpaid Drawing was paid by the Administrative Agent.
"Exide Canada" shall mean Exide Canada, Inc.
"Exide European Refinancing" shall have the meaning provided in
the recitals to the Ninth Amendment.
"Exide European Refinancing Facility Agreement" shall have the
meaning provided in the recitals to the Ninth Amendment.
"Exide European Restructuring" shall have the meaning provided in
the recitals to the Ninth Amendment.
"Exide European Restructuring Date" shall have the meaning
provided in Section I(1) of the Ninth Amendment.
"Exide France" shall mean Exide France SA, a corporation
organized under the laws of the Republic of France.
"Exide Letter of Credit" shall have the meaning provided in
Section 2.01(a)(i).
"Existing Chemical Credit Agreement" shall mean that certain
Amended and Restated Credit Agreement, dated as of December 17, 1992 among
the Company, the various lending institutions party thereto and Chemical
Bank, as agent thereunder, as in effect on the Effective Date.
"Existing Indebtedness" shall mean all Indebtedness of the
Company and its Subsidiaries or of Tudor and its Subsidiaries which is to
remain outstanding after giving effect to the Initial Borrowing Date,
provided that such Indebtedness shall only constitute Existing Indebtedness
to the extent same is listed on Schedule VI and does not exceed in
principal amount at any time outstanding the respective amount listed in
said Schedule VI.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.05.
"Existing Investments" shall have the meaning provided in Section
10.06.
"Existing Liens" shall have the meaning provided in Section
10.01(iii).
"Existing Swap" shall mean the rate swap transaction originally
entered into prior to the Effective Date between the Company and Chemical
Bank, which provides, for
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the period from September 1, 1995 through September 1, 2000, that the
Company shall pay interest on the notional amount of $60,000,000 to
Chemical Bank at a fixed rate of 8.98% per annum and that Chemical Bank
shall pay interest to the Company on such notional amount at a floating 6-
month LIBOR rate.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average
of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York or, if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from
three Federal Funds brokers of recognized standing selected by the
Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to
in Section 3.01.
"Fiat" shall mean Fiat SpA, a corporation organized under the
laws of Italy.
"Fifth Amendment" shall mean the Fifth Amendment to this
Agreement, dated as of April 18, 1995.
"Fifth Amendment Effective Date" shall have the meaning provided
in the Fifth Amendment.
"Final Draft CEAc Acquisition Stock Purchase Agreement" shall
mean the draft of the CEAc Acquisition Stock Purchase Agreement, draft
dated March 1, 1995, in the form furnished to the Agents and the Banks
prior to the date of the Fourth Amendment.
"Final Draft CEAc Acquisition Warranty Agreement" shall mean the
draft of the CEAc Acquisition Warranty Agreement, attached as Annex A to
the Final Draft CEAc Acquisition Stock Purchase Agreement in the form
furnished to the Agents and the Banks on or prior to the date of the Fourth
Amendment.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established
or maintained outside the United States of America by the Company or any
one or more of its Subsidiaries primarily for the benefit of employees of
the Company or such Subsidiaries residing outside the United States of
America, which plan, fund or other similar program provides, or results in,
retirement income, a deferral of income in contemplation of retirement or
payments to
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be made upon termination of employment, and which plan is not subject to
ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Company
that is incorporated under the laws of any jurisdiction other than the
United States of America, any State thereof, the United States Virgin
Islands or Puerto Rico.
"Foreign Subsidiary Guaranty" shall have the meaning provided in
Section 9.12.
"Fourth Amendment" shall mean the Fourth Amendment to this
Agreement, dated as of March 6, 1995.
"Fourth Amendment Effective Date" shall have the meaning provided
in the Fourth Amendment.
"French GAAP" shall mean generally accepted accounting principles
in the Republic of France consistently applied throughout the periods
involved (except to the extent a change is mandated pursuant to said
generally accepted accounted principles, is concurred in by the CEAc's
independent public accountants and is disclosed in writing with the
respective financial statements where the change is first made).
"GAAP" shall mean US GAAP, French GAAP or Spanish GAAP, as
applicable.
"Gemala" shall mean Gemala Holdings Limited.
"Guarantor" shall mean each Subsidiary Guarantor, each Foreign
Subsidiary party to a Foreign Subsidiary Guaranty, if any, and, after the
execution and delivery thereof, Tudor pursuant to the Tudor Guaranty.
"Guaranty" shall mean the Domestic Subsidiaries Guaranty, the
Tudor Guaranty and, after the execution and delivery thereof, each Foreign
Subsidiary Guaranty.
"Hazardous Materials" means (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could
become friable, urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing levels of
polychlorinated biphenyls, and radon gas; (b) any chemicals, materials or
substances defined as or included in the definition of "hazardous
substances," "hazardous waste," "hazardous materials," "extremely hazardous
substances," "restricted hazardous waste," "toxic substances," "toxic
pollutants," "contaminants," or "pollutants," or words of similar import,
under any applicable Environmental Law; and (c) any other chemical,
material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority under Environmental Laws.
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"Indebtedness" shall mean, as to any Person, without duplication,
(i) all indebtedness (including principal, interest, fees and charges) of
such Person for borrowed money or for the deferred purchase price of
property or services, (ii) the maximum amount available to be drawn under
all letters of credit issued for the account of such Person and all unpaid
drawings in respect of such letters of credit, (iii) all Indebtedness of
the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Lien on any property owned by such Person,
whether or not such Indebtedness has been assumed by such Person (to the
extent of the value of the respective property), (iv) the aggregate amount
required to be capitalized under leases under which such Person is the
lessee, (v) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e.,
----
take-or-pay and obligations, (vi) all Contingent Obligations of such Person
and (vii) all obligations under any Interest Rate Protection Agreement or
Other Hedging Agreement or under any similar type of agreement.
"Indentures" shall mean each of the Senior Note Indenture, the
2005 Senior Unsecured Note Indenture and the Senior Subordinated Note
Indenture.
"Initial Approval" shall mean the approval of CNMV of the Initial
Tender Offer.
"Initial Blocked Commitment" at any time shall be the Dollar
Equivalent of all amounts which will be required to be covered through the
issuance of the Treasury Stock Letter of Credit, the Tudor Convertible Bond
Letter of Credit and each Banesto Letter of Credit which is, or will be,
required to be delivered to the Seller or Banesto in accordance with the
Purchase Agreement (it being understood that, as such Letters of Credit are
issued, the Initial Blocked Commitment will be reduced to such amounts, if
any, as must be reserved under the Total Revolving Loan Commitment to be
covered by such Letters of Credit that have not yet been issued), with the
amount of the Initial Blocked Commitment to be determined from time to time
in good faith by the Administrative Agent.
"Initial Borrowing Date" shall mean the date occurring on or
after the Effective Date on which the initial Credit Event hereunder
occurs.
"Initial Offer to Purchase" shall mean the Offer to Purchase
issued by the Company in connection with the Initial Tender Offer, as
amended, modified or supplemented from time to time in accordance with
Section 10.12 or with the consent of the Required Banks.
"Initial Pledge Agreement" shall have the meaning provided in
Section 5.12.
"Initial Tender Offer" shall mean the tender offer commenced by
the Company pursuant to the Initial Offer to Purchase.
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"Initial Tender Offer Credit Support" shall have the meaning
provided in Section 2.01(a)(ii).
"Initial Tender Offer Date" shall mean the date upon which the
Initial Tender Offer is consummated in accordance with the terms and
conditions contained in the Initial Tender Offer Documents.
"Initial Tender Offer Documents" shall mean, collectively, (i)
the Initial Offer to Purchase and related documents filed with the CNMV
and/or distributed to the Tudor Shareholders in connection therewith and
(ii) the Acquisition Documents.
"Initial Tender Offer Filing Date" shall mean the date upon which
the Company makes a filing with CNMV in connection with seeking the Initial
Approval.
"Initial Tender Offer Termination Date" shall have the meaning
provided in Section 3.03(i).
"Intercompany Note" shall have the meaning provided in Section
10.06.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement, interest rate floor agreement or other
similar agreement or arrangement.
"Interest Rate Protection or Other Hedging Agreement" shall mean
any Currency Hedging Agreement or Interest Rate Protection Agreement.
"Interest Reduction Discount" shall mean initially zero and from
and after any Start Date occurring on or after September 30, 1995 to and
including the corresponding End Date:
(A) 1/4 of 1% if, but only if, as of the Test Date for such Start
Date both of the following conditions are met and the conditions set
forth in none of clauses (B), (C), (D), (E) and (F) below are
satisfied:
(i) the Consolidated Interest Coverage Ratio for the Test Period
ended on such Test Date shall be greater than 2.00:1; and
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(ii) Company Consolidated Indebtedness shall be equal to or less
than $800,000,000 at such time;
(B) 1/2 of 1% if, but only if, as of the Test Date for such
Start Date both of the following conditions are met and the conditions
set forth in none of clauses (C), (D), (E) and (F) below are
satisfied:
(i) the Consolidated Interest Coverage Ratio for the Test
Period ended on such Test Date shall be greater than 2.25:1; and
(ii) Company Consolidated Indebtedness shall be equal to or less
than $725,000,000 at such time;
(C) 3/4 of 1% if, but only if, as of the Test Date for such
Start Date both of the following conditions are met and the conditions
set forth in none of clauses (D), (E) and (F) below are satisfied:
(i) the Consolidated Interest Coverage Ratio for the Test
Period ended on such Test Date shall be greater than 3.0:1; and
(ii) Company Consolidated Indebtedness shall be equal to or less
than $650,000,000 at such time;
(D) 1% if, but only if, as of the Test Date for such Start Date
both of the following conditions are met and the conditions set forth
in none of clauses (E) and (F) below are satisfied:
(i) the Consolidated Interest Coverage Ratio for the Test
Period ended on such Test Date shall be greater than 3.5:1; and
(ii) Company Consolidated Indebtedness shall be equal to or less
than $575,000,000 at such time;
(E) 1-1/4% if, but only if, as of the Test Date for such Start
Date both of the following conditions are met and the conditions set
forth in clause (F) below are not satisfied:
(i) the Consolidated Interest Coverage Ratio for the Test
Period ended on such Test Date shall be greater than 4.0:1; and
(ii) Company Consolidated Indebtedness shall be equal to or less
than $500,000,000 at such time; or
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(F) 1-1/2% if, but only if, as of the Test Date for such Start
Date both of the following conditions are met:
(i) the Consolidated Interest Coverage Ratio for the Test
Period ended on such Test Date shall be greater than 4.5:1; and
(ii) Company Consolidated Indebtedness shall be equal to or less
than $425,000,000 at such time.
Notwithstanding anything to the contrary contained above in this
definition, (x) the Interest Reduction Discount shall be reduced to zero at
all times when there shall exist a Default or an Event of Default and (y)
in no event shall the Interest Reduction Discount exceed (A) in the case of
Loans other than Tranche B Term Loans which are maintained as Base Rate
Loans, 1.25% and (B) in the case of Loans other than Tranche B Term Loans
which are maintained as Eurodollar Loans, 1.50%
"Investment" shall have the meaning provided in Section 10.6.
"Issuing Bank" shall mean any of BTCo, BA or BMO, and any Bank
which at the request of the Company and with the consent of each Agent
agrees, in such Bank's sole discretion, to become an Issuing Bank for the
purpose of issuing Letters of Credit pursuant to Section 2. To the extent
any Letter of Credit is denominated in a currency other than Dollars, any
Bank described above may cause a local affiliate of such Bank to issue the
respective Letter of Credit, and such local affiliate shall be deemed to be
the Issuing Bank of such Letter of Credit for purposes of this Agreement.
"L/C Supportable Indebtedness" shall mean (i) obligations of the
Company and its Subsidiaries (other than Tudor and its Subsidiaries)
incurred in the ordinary course of business with respect to insurance
obligations and workers' compensation, surety bonds and other similar
statutory obligations and (ii) such other obligations of the Company and
its Subsidiaries (other than Tudor and its Subsidiaries) as are reasonably
acceptable to the respective Issuing Bank and otherwise permitted to exist
pursuant to the terms of this agreement.
"Leaseholds" of any Person means all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall mean each Exide Letter of Credit, each
Banesto Letter of Credit, the Treasury Stock Letter of Credit, the Tudor
Convertible Bond Letter of Credit, the Initial Tender Offer Credit Support,
the Secondary Tender Offer Credit Support and each Additional Tudor Letter
of Credit issued under this Agreement. Notwithstanding the fact that the
Initial Tender Offer Credit Support and the Secondary Tender Offer Credit
Support shall be issued in the form of a bank guarantee by the
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respective Issuing Bank, such bank guarantee shall be treated for all
purposes of this Agreement as a Letter of Credit issued hereunder.
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Limit" at any time shall mean an amount equal
to (x) $35 million plus (y) the aggregate Stated Amounts of all Letters of
Credit outstanding at such time pursuant to any of clauses (iii) through
(vi), inclusive, of Section 2.01(a).
"Letter of Credit Outstandings" shall mean, at any time, the sum
of (i) the aggregate Stated Amount of all outstanding Letters of Credit and
(ii) the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the UCC or any other similar recording or notice statute, and
any lease having substantially the same effect as any of the foregoing).
"Loan" shall mean each Tranche A Term Loan, each Tranche B Term
Loan, each Tranche C Term Loan, each Revolving Loan and each Swingline
Loan.
"Majority Banks" of any Tranche shall mean those Non-Defaulting
Banks which would constitute the Required Banks under, and as defined in,
this Agreement if all outstanding Obligations of the other Tranches under
this Agreement were repaid in full and all Commitments with respect thereto
were terminated.
"Majority Subsidiary" shall mean a Subsidiary of a Wholly-Owned
Subsidiary of the Company that receives Investments of the type permitted
pursuant to Section 10.06(xx).
"Management Agreements" shall have the meaning provided in
Section 5.05.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(e).
"Margin Reduction Period" shall mean each period which shall
commence on a date on which the financial statements are delivered pursuant
to Section 9.01(b) or (c) and which shall end on the earlier of (i) the
date of actual delivery of the next financial statements pursuant to
Section 9.01(b) or (c) and (ii) the latest date on which the next financial
statements are required to be delivered pursuant to Section 9.01(b) or (c).
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"Margin Stock" shall have the meaning provided in Regulation U.
"Maturity Date" shall mean, with respect to any Tranche of Loans,
the Tranche A Term Loan Maturity Date, the Tranche B Term Loan Maturity
Date, the Tranche C Term Loan Maturity Date or the Revolving Loan Maturity
Date, as the case may be.
"Maximum Swingline Amount" shall mean $5,000,000.
"Minimum Unutilized Revolving Loan Commitment" shall mean
$50,000,000.
"Mortgage" shall have the meaning provided in Section 5.14 and,
after the execution and delivery thereof, shall include each Additional
Mortgage.
"Mortgage Amendment" shall have the meaning provided in Section
6A.12(b).
"Mortgage Policies" shall have the meaning provided in Section
5.14.
"Mortgaged Property" shall have the meaning provided in Section
5.14 and, after the execution and delivery of any Additional Mortgage,
shall include the respective Additional Mortgaged Property.
"Net Cash Proceeds" shall mean for any event requiring a
repayment pursuant to Section 4.02 or for the Subject Shares Issuance, the
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 from such event, net of reasonable transaction
costs (including, as applicable, any underwriting, brokerage or other
customary commissions and reasonable legal, advisory and other fees and
expenses associated therewith) received from any such event.
"Net Sale Proceeds" shall mean for any sale of assets, the 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 from any sale of assets, net of reasonable
transaction costs (including, without limitation, any underwriting,
brokerage or other customary selling commissions and reasonable legal,
advisory and other fees and expenses, including title and recording
expenses, associated therewith) and payments of unassumed liabilities
relating to the assets sold at the time of, or within 30 days after, the
date of such sale, the amount of such gross cash proceeds required to be
used to repay any Indebtedness (other than Indebtedness of the Banks
pursuant to this Agreement, other than the Senior Subordinated Notes and
the Senior Notes and other than any Indebtedness of Tudor and its
Subsidiaries entitled to the benefits of a Letter of Credit issued
hereunder) which is secured by the respective assets which were sold, and
the
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estimated marginal increase in income taxes which will be payable by the
Company's consolidated group with respect to the fiscal year in which the
sale occurs as a result of such sale; but excluding any portion of any such
gross cash proceeds which the Company determines in good faith should be
reserved for post-closing adjustments (to the extent the Company delivers
to the Banks a certificate signed by its chief financial officer,
controller or chief accounting officer as to such determination), it being
understood and agreed that on the day that all such post-closing
adjustments have been determined, (which shall not be later than six months
following the date of the respective asset sale), the amount (if any) by
which the reserved amount in respect of such sale or disposition exceeds
the actual post-closing adjustments payable by the Company or any of its
Subsidiaries shall constitute Net Sale Proceeds on such date received by
the Company and/or any of its Subsidiaries from such sale, lease, transfer
or other disposition.
"Ninth Amendment" shall mean the Ninth Amendment, Consent and
Agreement, dated as of November 22, 1995, to this Agreement.
"Ninth Amendment Effective Date" shall have the meaning provided
in Section IV(4) of the Ninth Amendment.
"Non-Defaulting Bank" shall mean and include each Bank other than
a Defaulting Bank.
"Note" shall mean each Tranche A Term Note, each Tranche B Term
Note, each Tranche C Term Note, each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03.
"Notice of Conversion" shall have the meaning provided in Section
1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at 130 Liberty Street, New York, New York 10006, Attention: Mary
Kay Coyle, or such other office as the Agent may hereafter designate in
writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Agents, the
Administrative Agent, the Collateral Agent or any Bank pursuant to the
terms of Agreement or any other Credit Document.
"Offer to Purchase" shall mean the Initial Offer to Purchase and
the Secondary Offer to Purchase.
"Option Shares" shall mean the 1,378,125 Tudor Shares defined as
Option Shares pursuant to the Purchase Agreement.
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"Participant" shall have the meaning provided in Section 2.04(a).
"Parent Support Agreement" shall mean the Parent Support
Agreement to be entered into in connection with the Tudor Refinancing, but
only upon the delivery to the Agent for cancellation of the Tudor
Convertible Bond Letter of Credit and all theretofore outstanding Banesto
Letters of Credit, as described in Section I(3) of the Eighth Amendment.
"Payment Office" shall mean the office of the Agent located at
One Bankers Trust Plaza, New York, New York 10006, or such other office as
the Agent may hereafter designate in writing as such to the other parties
hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean the RL Percentage and the TL Percentage,
as the case may be.
"Permitted Acquisition" shall mean the acquisition by the Company
of all or substantially all of the assets of any Person (or all or
substantially all of the assets of a product line or division of any
Person) not already a Subsidiary of the Company or 100% of the capital
stock of any such Person (which capital stock may be purchased by the
Company, or acquired by way of a merger of the acquired Person with or into
a newly created Wholly-Owned Subsidiary of the Company created to effect
the respective Permitted Acquisition), provided, that any such acquisition
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shall only be a Permitted Acquisition so long as (A) the consideration
therefor consists solely of cash and/or common stock of the Company (issued
at fair market value determined as of the date of such Permitted
Acquisition) and (B) the assets acquired will be used solely in, or the
business of the Person whose stock is acquired consists solely of, any or
all of the same business lines to the extent permitted by Section 10.04.
Neither the assets acquired by way of any Permitted Acquisition, nor any
Person created or acquired as a result of a Permitted Acquisition, shall be
permitted to have any Indebtedness outstanding at the time of, or
immediately after giving effect to, the respective Permitted Acquisition,
except that any Subsidiary acquired pursuant to, or established to effect,
a Permitted Acquisition, may assume or continue Acquired Indebtedness as a
result of a Permitted Acquisition effected after March 31, 1996 in
accordance with the requirements of Section 9.15, so long as (x) the
aggregate principal amount of all Acquired Indebtedness so incurred or
assumed does not exceed $15,000,000 and (y) the principal amount of
Acquired Indebtedness incurred or assumed in connection with any Permitted
Acquisition shall be treated as a utilization of, and shall reduce, the
Company Retained Excess Cash Flow Amount. Notwithstanding anything to the
contrary contained in the immediately preceding sentence, an acquisition
shall be a Permitted Acquisition only if all requirements of Section 9.15
with respect to Permitted Acquisitions are met with respect thereto.
Notwithstanding anything to the contrary contained in the immediately
preceding sentence, (x) the consideration payable in connection with the
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Schuylkill Acquisition shall be as described in Annex II to the Eighth
Amendment and (y) an acquisition shall be a Permitted Acquisition only if
all the applicable requirements of Section 9.15 with respect to Permitted
Acquisitions are met with respect thereto.
"Permitted Acquisition Notice" shall have the meaning provided in
Section 9.15.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Agents in their reasonable discretion.
"Permitted Liens" shall have the meaning provided in Section
10.01.
"Permitted Sales Branch Acquisitions" shall have the meaning
provided in Section 10.02.
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government
or political subdivision or any agency, department or instrumentality
thereof.
"Pesetas" shall mean the freely transferable lawful money of the
Kingdom of Spain.
"Plan" shall mean any multiemployer or single-employer plan, as
defined in Section 4001 of ERISA, which is maintained or contributed to by
(or to which there is an obligation to contribute of), the Company or a
Subsidiary of the Company or an ERISA Affiliate, and each such plan for the
five year period immediately following the latest date on which the
Company, a Subsidiary of the Company or an ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in each of the Pledge Agreements.
"Pledge Agreements" shall mean the Initial Pledge Agreement and,
after the execution and delivery thereof, the Tudor Shares Pledge Agreement
and any other pledge agreement executed and delivered pursuant to the
requirements of this Agreement.
"Pledged Securities" shall mean "Pledged Securities" as defined
in each of the Pledge Agreements.
"Pledged Stock" shall mean "Pledged Stock" as defined in the
Pledge Agreement.
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"Preliminary Offering Memorandum" shall mean the Preliminary
Offering Memorandum, dated as of April 10, 1995, providing for the issuance
by the Company of an aggregate principal amount of $225,000,000 of the 2005
Senior Unsecured Notes, as in effect on the Fifth Amendment Effective Date
and with any amendments, modifications or supplements thereto as are
reasonably satisfactory to the Agents and Required Banks.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to
change when and as such prime lending rate changes. The Prime Lending Rate
is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer. BTCo may make com mercial loans or
other loans at rates of interest at, above or below the Prime Lending Rate.
"Projections" shall have the meaning provided in Section 5.15.
"Purchase Agreement" shall mean the Purchase Agreement, dated as
of July 22, 1994, between the Company and the Seller as in effect on the
Effective Date and as amended, modified or supplemented from time to time
in accordance with the terms hereof and thereof.
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December, occurring after the Initial Borrowing
Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as
the same may be amended from time to time, 42 U.S.C. (S) 6901 et seq.
-- ----
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Receivables Facility" shall mean (i) the Receivables Purchase
Agreement, dated as of February 17, 1994, between the Company, as seller,
and Three Rivers Funding Corporation, as buyer, as such Receivables
Purchase Agreement is in effect on the Effective Date, but giving effect to
(x) extensions of the termination date thereunder, (y) increases in the
committed amount thereof after the Effective Date, but only if the
respective increases are approved in writing by the Required Banks, and (z)
other changes thereto approved by the Required Banks and (ii) any
additional or substitute or replacement receivables facility so long as
such facility and all documentation therefor, and the committed amount
thereof, is approved in writing by the Required Banks.
"Receivables Facility Attributed Indebtedness" at any time shall
mean the aggregate amount theretofore paid to the Company and/or its
Subsidiaries in respect of the receivables sold by it pursuant to the
Receivables Facility, in each case to the extent the respective receivables
have not yet been repaid by the respective account debtor or repurchased by
the Company (it being the intent of the parties that the amount of
Receivables Facility Attributed Indebtedness at any time outstanding
approximate as closely
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as possible the principal amount of indebtedness which would be outstanding
at such time under the Receivables Facility if same were structured as a
secured lending agreement rather than a purchase agreement).
"Receivables Facility Commitment" shall mean the aggregate
commitments to purchase receivables pursuant to the Receivables Facility as
in effect from time to time.
"Receivables Financier" shall mean Three Rivers Funding
Corporation or any other purchaser pursuant to the Receivables Facility as
then in effect.
"Receivables Maximum Commitment Amount" shall initially mean
$40,000,000; provided that such amount may be increased from time to time
after the Initial Borrowing Date as the Receivables Facility Commitment
pursuant to the Receivables Facility (or the various facilities comprising
the Receivables Facility) is increased; provided further that (i) the
Receivables Maximum Commitment Amount shall at no time exceed $90,000,000
and (ii) on each date upon which the Receivables Commitment is increased to
an amount in excess of $40,000,000 (or in excess of the highest amount to
which the Receivables Maximum Commitment Amount has theretofore been raised
after the Initial Borrowing Date and before such increase), there shall be
a reduction to the Total Revolving Loan Commitment in the amount of such
increase pursuant to Section 3.03(k).
"Recovery Event" shall mean the receipt by the Company or any of
its Subsidiaries of any cash insurance proceeds or condemnation award
payable by reason of theft, loss, physical destruction, damage,
condemnation or any other similar event with respect to any property or
assets of the Company or any of its Subsidiaries. The term "Recovery Event"
shall not include the receipt of proceeds of any Environmental Insurance
Claim.
"Refinancing" shall mean by the Company of all amounts
outstanding and the termination of all commitments under the refinancing of
the Existing Chemical Credit Agreement and the release of any guaranties of
security in connection therewith.
"Register" shall have the meaning provided in Section 14.15.
"Regulation D" shall mean Regulation D 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 establishing reserve requirements.
"Regulation G" shall mean Regulation G 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.
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"Regulation T" shall mean Regulation T 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.
"Regulation U" shall mean Regulation U 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.
"Regulation X" shall mean Regulation X 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,
disposing or migration into the environment.
"Remaining CEAc Shares" shall mean the CEAc Shares which were not
purchased by CEAc Acquisition Corp. on the CEAc Acquisition Date, which in
the aggregate represent not more than .3% of the aggregate outstanding
capital stock of CEAc.
"Remaining Tudor Convertible Bonds" shall mean the Tudor
Convertible Bonds which were not tendered in the Initial Tender Offer
(other than such Tudor Convertible Bonds held by the Seller which the
Seller has agreed not to tender in accordance with the Purchase Agreement).
"Remaining Tudor Shares" shall mean the Tudor Shares which were
not tendered in the Initial Tender Offer (other than the Option Shares).
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(b) of ERISA with respect to a Plan other than those events as to which
the 30-day notice period is waived under subsection .13, .14, .16, .18, .19
or .20 of PBGC Regulation Section 2615.
"Required Appraisals" shall have the meaning provided in Section
9.11(f).
"Required Banks" shall mean Non-Defaulting Banks, the sum of
whose out standing Tranche A Term Loans and TL Percentages of Tranche A
Letter of Credit Outstandings, Tranche B Term Loans, Tranche C Term Loans
(or, if prior to the Tranche C Term Loan Borrowing Date, Tranche C Term
Loan Commitments) and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and Adjusted
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RL Percentages of Swingline Loans and Revolving Letter of Credit
Outstandings) represent an amount greater than 50% of the sum of all
outstanding Tranche A Term Loans and Tranche A Letter of Credit
Outstandings of Non-Defaulting Banks, all outstanding Tranche B Term Loans
of Non-Defaulting Banks, all outstanding Tranche C Term Loans (or, if prior
to the Tranche C Term Loan Borrowing Date, Tranche C Term Loan Commitments)
of Non-Defaulting Banks and the Adjusted Total Revolving Loan Commitment
(or after the termination thereof, the sum of the then total outstanding
Revolving Loans of Non-Defaulting Banks and the aggregate Adjusted RL
Percentages of all Non-Defaulting Banks of the total outstanding Swingline
Loans and Revolving Letter of Credit Outstandings at such time).
"Required Tranche C Banks" shall mean Non-Defaulting Banks, the
sum of whose outstanding Tranche C Term Loans (or, if prior to the Tranche
C Term Loan Borrowing Date, Tranche C Term Loan Commitments) represents an
amount greater than 50% of the sum of all outstanding Tranche C Term Loans
(or, if prior to the Tranche C Term Loan Borrowing Date, Tranche C Term
Loan Commitments) of Non-Defaulting Banks.
"Restricted Collateral" shall mean any Principal Property, or any
shares of capital stock or indebtedness of any Restricted Subsidiary, with
all of the preceding terms defined by reference to the Senior Note
Indenture as in effect on the Effective Date; provided that,
notwithstanding anything to the contrary contained above, in no event shall
(i) the capital stock of CEAc US Holdco or its Subsidiaries constitute
Restricted Collateral, (ii) the capital stock of, or promissory notes
payable by the Subsidiary formed to effect the Schuylkill Acquisition (or
any Subsidiary acquired pursuant to the Schuylkill Acquisition) constitute
Restricted Collateral or (iii) any other capital stock or Indebtedness
which is permitted to secure all amounts outstanding under this Agreement
as a result of the provisions of Section 4.8(v) of the Senior Note
Indenture (as added pursuant to the First Supplemental Indenture thereto)
constitute Restricted Collateral.
"Restricted Collateral Amount" shall mean the sum of (i) $162
million plus (ii) the remainder of (A) the Consolidated Net Tangible Asset
Amount at such time (which Consolidated Net Tangible Asset Amount shall at
all times be at least $43 million, and shall at all times be at least equal
to the highest amount which the Consolidated Net Tangible Asset Amount has
theretofore been), less (B) $1,000,000, minus (iii) the aggregate cash
proceeds realized after the Effective Date from the enforcement of remedies
pursuant to the Security Documents, but only to the extent representing
proceeds of Restricted Collateral actually applied to repay principal of
Loans.
"Restricted Collateral Secured Portion" shall have the meaning
provided in Section 14.17(b).
"Retained Excess Cash Flow Percentage" shall mean a percentage
which shall be equal to 25%; provided that if on the relevant Excess Cash
Payment Date the
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Excess Cash Flow Percentage is 50%, then the Retained Excess Cash Flow
Percentage shall also be 50%.
"Returns" shall have the meaning provided in Section 8.09.
"Revolver Letter of Credit Fee" shall have the meaning provided
in Section 3.01(b).
"Revolving Allocated Portion" of the Initial Tender Offer Credit
Support shall mean the Stated Amount thereof less the Tranche A Allocated
Portion thereof at such time.
"Revolving Credit Participant" shall have the meaning provided in
Section 2.04(a).
"Revolving Letter of Credit Outstandings" shall mean at any time,
the sum of (i) the Revolving Allocated Portion of the Stated Amount of the
Initial Tender Offer Credit Support, (ii) the aggregate Stated Amount of
all other outstanding Letters of Credit (i.e., all Letters of Credit other
than the Initial Tender Offer Credit Support), (iii) the amount of all
Unpaid Drawings under the Initial Tender Offer Credit Support to the extent
same are participated in by the Revolving Credit Participants pursuant to
Section 2.04 and (iv) the amount of all Unpaid Drawings under all other
Letters of Credit (i.e., all Letters of Credit other than the Initial
Tender Offer Credit Support).
"Revolving Loan" shall have the meaning provided in Section
1.01(c).
"Revolving Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I hereto directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced
from time to time pursuant to Sections 3.02, 3.03, 4.02 and/or 11 or (y)
adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 1.13 or 14.04(b).
"Revolving Loan Maturity Date" shall mean September 30, 1999.
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the
Total Revolving Loan Commitment at such time, provided that if the RL
--------
Percentage of any Bank is to be determined after the Total Revolving Loan
Commitment has been terminated, then the RL Percentages of the Banks shall
be determined immediately prior (and without giving effect) to such
termination.
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"Scheduled Commitment Reduction" shall have the meaning provided
in Section 3.03(d).
"Scheduled Commitment Reduction Date" shall have the meaning
provided in Section 3.03(d).
"Scheduled Repayments" shall mean the Tranche A Scheduled
Repayments, the Tranche B Scheduled Repayments and the Tranche C Scheduled
Repayments.
"Schuylkill Acquisition" shall have the meaning provided in the
recitals to the Eighth Amendment.
"Schuylkill Acquisition Assumed Liabilities" shall mean and
include each of (i) the Contingent Lead Note, (ii) the Schuylkill Assumed
Tax Liability, (iii) the Engitec Equipment Commitments, (iv) the Schuylkill
Assumed Guaranty and L/C Obligations and (v) the Schuylkill Make Whole
Obligations.
"Schuylkill Assumed Guaranty and L/C Obligations" shall mean the
obligations with respect to the outstanding guarantees and letters of
credit supporting environmental and workers' compensation responsibilities
of SMC and/or SHI, which in no event shall exceed in aggregate amount at
any time outstanding $2,200,000.
"Schuylkill Assumed Tax Liability" shall mean tax liabilities
assumed in connection with the Schuylkill Acquisition, and in accordance
with the terms of the Schuylkill Purchase Agreement, which at the time of
the consummation of the Schuylkill Acquisition shall, in the good faith
judgment of the Company, not exceed $500,000 in the aggregate.
"Schuylkill Make Whole Obligations" shall mean the obligations of
the Company pursuant to Article 3 of the Schuylkill Purchase Agreement as
attached as part of Annex II to the Eighth Amendment.
"Schuylkill Purchase Agreement" shall have the meaning provided
in the recitals to the Eighth Amendment.
"SEC" shall have the meaning provided in Section 9.01(h).
"Second Exide European Restructuring" shall have the meaning
provided in the recitals to the Tenth Amendment.
"Secondary Approval" shall mean the approval of CNMV of the
Secondary Tender Offer.
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"Secondary Offer to Purchase" shall mean the Offer to Purchase to
be issued by the Company in connection Secondary Tender Offer in form and
substance satisfactory to the Agents and the Required Banks.
"Secondary Tender Offer" shall mean a tender offer commenced by
the Company pursuant to the Secondary Offer to Purchase.
"Secondary Tender Offer Blocked Commitment" shall mean an amount
equal to the remainder of (x) $239 million minus (y) the aggregate purchase
price paid (or, if greater, required to be paid) by the Company for the
purchase of Tudor Shares and Tudor Convertible Bonds actually tendered
pursuant to the Initial Tender Offer, calculated by taking the Dollar
Equivalent thereof at the time the respective payments are made (or, to the
extent not yet made, the Dollar Equivalent thereof at the time of
determination); provided that the Secondary Tender Offer Blocked Commitment
shall be (x) reduced from time to time to the extent that reductions are
made to the Total Revolving Loan Commitment after the Initial Tender Offer
Date pursuant to Section 3.02(a) which specifically are allocated to reduce
the Secondary Tender Offer Blocked Commitment as provided in said Section
3.02(a) and (y) reduced to $0 immediately after such time, if any, as the
Total Revolving Loan Commitment is reduced pursuant to Section 3.03(f).
"Secondary Tender Offer Credit Support" shall have the meaning
provided in Section 2.01(a)(vi).
"Secondary Tender Offer Date" shall mean the date of the
consummation of the Secondary Tender Offer.
"Secondary Tender Offer Documents" shall mean the Secondary Offer
to Purchase and related documents filed with the CNMV and/or distributed to
the Tudor Shareholders in connection therewith.
"Secondary Tender Offer Filing Date" shall mean the date upon
which the Company makes a filing with CNMV in connection with seeking the
Secondary Approval.
"Secondary Tender Offer Maximum Offered Consideration" shall mean
the maximum amount which will be required to be paid by the Company in
connection with the consummation of the purchase of the Remaining Tudor
Shares and the Remaining Tudor Convertible Bonds pursuant to the Secondary
Tender Offer if all such shares and bonds are tendered in accordance with
the terms thereof.
"Secondary Tender Offer Payment" shall mean the amount, if any,
paid (or, if greater, required to be paid) by the Company in connection
with the consummation of the purchase of the Remaining Tudor Shares and the
Remaining Tudor Convertible Bonds pursuant to the Secondary Tender Offer.
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"Section 4.04(b)(ii) Certificate" shall have the meaning provided
in Section 4.04(b).
"Secured Creditors" shall have the meaning assigned that term in
the Security Documents.
"Secured Interest Rate Protection or Other Hedging Agreement"
shall mean any Interest Rate Protection or Other Hedging Agreement which is
secured pursuant to the Security Documents in accordance with the terms
thereof, but shall in any event exclude any such agreement which
constitutes Existing Indebtedness prior to the Effective Date and remains
outstanding thereafter.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Agreement" shall have the meaning provided in Section
5.13.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in each Security Agreement.
"Security Document" shall mean each Pledge Agreement, the
Security Agreement, each Mortgage and, after the execution and delivery
thereof, each Additional Mortgage, each Tudor Security Document and each
Additional Security Document.
"Seller" shall mean Corporacion Industrial y Financiera de
Banesto.
"Seller Convertible Bonds" means the 299,827 Tudor Convertible
Bonds owned by the Seller as described in the Purchase Agreement.
"Seller Tender Date" shall mean the date upon which the Seller
delivers certificates representing 14,412,929 Tudor Shares pursuant to the
terms of the Initial Tender Offer and the Purchase Agreement.
"Senior Note Indenture" shall mean the Indenture, dated as of
December 17, 1992, between the Company and Bank of Montreal Trust Company,
as trustee, pursuant to which the Senior Notes were issued.
"Senior Notes" shall mean the Company's 10-3/4% Senior Notes due
2002 issued pursuant to the Senior Note Indenture.
"Senior Subordinated Note Indenture" shall mean the Indenture,
dated as of December 17, 1992, between the Company and The Bank of New
York, as trustee, pursuant to which the Senior Subordinated Notes were
issued.
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"Senior Subordinated Notes" shall mean the Company's 12-1/4%
Senior Subordinated Deferred Coupon Debentures due 2004, issued pursuant to
the Senior Subordinated Note Indenture.
"Seventh Amendment" shall mean the Seventh Amendment to this
Agreement, dated as of April 24, 1995.
"Seventh Amendment Effective Date" shall have the meaning
provided in the Seventh Amendment.
"Shareholder Rights Plan" shall mean the Shareholder Rights Plan
of the Company as described in Schedule XXI.
"Shareholders' Agreements" shall have the meaning provided in
Section 5.05.
"SHI" shall have the meaning provided in the recitals to the
Eighth Amendment.
"Sixth Amendment" shall mean the Sixth Amendment to this
Agreement, dated as of April 21, 1995.
"Sixth Amendment Effective Date" shall have the meaning provided
in the Sixth Amendment.
"SLCV" shall have the meaning provided in Section 2.01.
"SMC" shall have the meaning provided in the recitals to the
Eighth Amendment.
"Sonnenschein" shall mean Accumulatorenfabrik Sonnenschein GmbH,
a German corporation registered in Budingen, Germany.
"Spanish GAAP" shall mean generally accepted accounting
principles in the Kingdom of Spain consistently applied throughout the
periods involved (except to the extent a change is mandated pursuant to
said generally accepted accounted principles, is concurred in by the
Tudor's independent public accountants and is disclosed in writing with the
respective financial statements where the change is first made).
"Specified Competition Counsel" shall mean, collectively, (i)
with respect to France, Gide Loyrette Nouel, (ii) with respect to Spain,
J&H Garrigues, (iii) with respect to the United Kingdom, Lovell White
Durrant, and (iv) with respect to Belgium, De Bandt, Van Hecke & Lagae.
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"Specified Competition Counsel Opinions" shall mean,
collectively, (i) the Memorandum, dated February 16, 1995, from Gide
Loyrette Nouel addressed to Carter Emerson of Kirkland & Ellis; (ii) the
Memorandum, dated February 20, 1995, from Lovell White Durrant addressed to
Carter Emerson of Kirkland Ellis; (iii) the Memorandum, dated February 17,
1995, from J&H Garrigues addressed to Carter Emerson of Kirkland & Ellis;
and (iv) the Memorandum, dated February 16, 1995, from De Bandt, Van Hecke
& Lagae addressed to Carter Emerson of Kirkland & Ellis.
"Specified Jurisdiction" shall mean each of France, Spain, the
United Kingdom and Belgium.
"Standby Letter of Credit" shall have the meaning provided in
Section 2.01(a)(i).
"Start Date" shall have the meaning provided in the definition of
Applicable Commitment Commission Percentage.
"Stated Amount" of each Letter of Credit shall, at any time, mean
the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then
be met); provided, that the "Stated Amount" of each Letter of Credit
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denominated in a currency other than Dollars shall be, on any date of
calculation, the Dollar Equivalent of the maximum amount available to be
drawn in the respective currency thereunder (determined without regard to
whether any conditions to drawing could then be met). Notwithstanding
anything to the contrary contained above, for purposes of making
calculations pursuant to this Agreement, the Stated Amount of (x) the
Initial Tender Offer Credit Support at any time after the occurrence of the
Initial Tender Offer Date shall be calculated from time to time by the
Administrative Agent in good faith based upon what it believes is the
maximum amount which could be drawn thereunder (based upon the aggregate
purchase price required to be paid for the Tudor Shares and Tudor
Convertible Bonds actually tendered pursuant to the Initial Tender Offer),
provided that such calculation shall not alter the liabilities of the Banks
to participate in the Initial Tender Offer Credit Support as provided in
Section 2 and (y) the Secondary Tender Offer Credit Support at any time
after the occurrence of the Secondary Tender Offer Date shall be calculated
from time to time by the Administrative Agent in good faith based upon what
it believes is the maximum amount which could be drawn thereunder (based
upon the aggregate purchase price required to be paid for the Remaining
Tudor Shares and Remaining Tudor Convertible Bonds actually tendered
pursuant to the Secondary Tender Offer), provided that such calculation
shall not alter the liabilities of the Banks to participate in the
Secondary Tender Offer Credit Support as provided in Section 2.
"Subject Shares" shall mean 5,175,000 shares of common stock of
the Company issued pursuant to the Subject Shares Issuance.
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"Subject Shares Issuance" shall mean the public issuance of the
Subject Shares pursuant to a form S-1 Registration Statement, dated
November 23, 1994, with the Subject Shares Issuance to include the related
exercise of the underwriters' over-allotment option.
"Subrogation Rights Agreement" shall have the meaning provided in
Section 5.21.
"Subsidiary" shall mean, as to any Person, (i) 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 stock of 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 and/or one or more Subsidiaries of such Person and (ii) any
partnership, association, joint venture or other entity in which such
Person and/or one or more Subsidiaries of such Person has more than a 50%
equity interest at the time. Notwithstanding anything to the contrary
contained above, for purposes of Section 8 of this Agreement, Tudor and its
Subsidiaries shall at all times be included as Subsidiaries of the Company,
regardless of whether the Initial Tender Offer shall have been consummated,
until such time, if any, as the Initial Tender Offer is withdrawn,
cancelled or declared void without the purchase of Tudor Shares thereunder
and the reduction to the Total Revolving Loan Commitment contemplated by
Section 3.03(i) is effected.
"Subsidiary Guarantor" shall mean each Subsidiary of the Company
which is, or becomes, party to a Guaranty.
"Supermajority Banks" of any Tranche shall mean those Non-
Defaulting Banks which would constitute the Required Banks under, and as
defined in, this Agreement if (x) all outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments with
respect thereto were terminated and (y) the percentage "50%" contained
therein were changed to "66-2/3%."
"Swingline Bank" shall mean BTCo.
"Swingline Expiry Date" shall mean the date which is five
Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loans" shall have the meaning provide in Section
1.01(d).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Termination Date" shall mean the earlier of (x) the
90th day after the Initial Borrowing Date or (y) that date upon which the
Agents determine in their
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sole discretion (and notify the Company) that the primary syndication (and
resultant addition of institutions as Banks pursuant to Section 14.04) has
been completed.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Tax Sharing Agreements" shall have the meaning provided in
Section 5.05.
"Tender Offer" shall mean the Initial Tender Offer and the
Secondary Tender Offer.
"Tender Offer Documents" shall mean collectively, the Initial
Tender Offer Documents and, after the entering into or dissemination
thereof, the Secondary Tender Offer Documents.
"Tenth Amendment" shall mean the Tenth Amendment, Consent and
Agreement, dated as of March 28, 1996, to this Agreement.
"Tenth Amendment Effective Date" shall have the meaning provided
in Section III (4) of the Ninth Amendment.
"Term Loan" shall mean any Tranche A Term Loan, Tranche B Term
Loan or Tranche C Term Loan.
"Term Loan Commitment" shall mean each Tranche A Term Loan
Commitment, Tranche B Term Loan Commitment, and Tranche C Term Loan
Commitment, with the Term Loan Commitment of any Bank at any time to equal
the sum of its Tranche A Term Loan Commitment, Tranche B Term Loan
Commitment and Tranche C Term Loan Commitment as then in effect.
"Test Date" shall have a meaning provided in the definition of
Applicable Commitment Commission Percentage.
"Test Period" shall mean the period of four consecutive fiscal
quarters (taken as one accounting period) ended on the respective Test
Date.
"Third Amendment Effective Date" shall have the meaning provided
in the Third Amendment to this Agreement, dated as of February 3, 1995.
"TL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Tranche A Term
Loan Commitment of such Bank at such time and the denominator of which is
the Total Tranche A Term Loan Commitment at such time, provided that if the
--------
T L Percentage of any Bank is to be determined after the Total Tranche A
Term Loan Commitment has been terminated, then
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the TL Percentages of the Banks shall be determined immediately prior
(without giving effect) to such termination.
"Total Available Revolving Loan Commitment" shall mean at any
time, the Total Revolving Loan Commitment less the Blocked Commitment, if
any, at such time.
"Total Commitments" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean at any time the sum of
the Total Tranche A Term Loan Commitment, the Total Tranche B Term Loan
Commitment, and the Total Tranche C Term Loan Commitment.
"Total Tranche A Term Loan Commitment" shall mean, at any time,
the sum of the Tranche A Term Loan Commitments of each of the Banks.
"Total Tranche B Term Loan Commitment" shall mean, at any time,
the sum of the Tranche B Term Loan Commitments of each of the Banks.
"Total Tranche C Term Loan Commitment" shall mean, at any time,
the sum of the Tranche C Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any
time, an amount equal to the remainder of (x) the then Total Revolving Loan
Commitment, less (y) the sum of the aggregate principal amount of Revolving
Loans and Swingline Loans outstanding plus the then aggregate amount of the
Revolving Letter of Credit Outstandings.
"Trade Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being five separate
Tranches, i.e., Tranche A Term Loans, Tranche B Term Loans, Tranche C Term
----
Loans, Revolving Loans and Swingline Loans.
"Tranche A Allocated Amount" at any time shall mean (i) an amount
equal to the Total Tranche A Term Loan Commitment on the Initial Borrowing
Date after giving effect to the incurrence of any Tranche A Term Loans on
such date (and the resultant reductions to the Total Tranche A Term Loan
Commitment pursuant to Section 3.02(b) on or prior to such date), less (ii)
the aggregate amount of Drawings (taking the Dollar Equivalent thereof on
the dates of the respective Drawings are made) funded by the Tranche A
Participants with respect to the Initial Tender Offer Credit Support after
the
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Initial Borrowing Date and, without duplication (i.e., excluding Tranche A
----
Loans the proceeds of which are used to fund Drawings described above in
this clause (ii)), the aggregate principal amount of any Tranche A Term
Loans made by the Tranche A Participants after the Initial Borrowing Date.
"Tranche A Allocated Portion" of the Initial Tender Offer Credit
Support at any time shall mean the lesser of (i) the Stated Amount of such
Letter of Credit or (ii) the Tranche A Allocated Amount as then in effect.
"Tranche A Letter of Credit Fee" shall have the meaning provided
in Section 3.01(b).
"Tranche A Letter of Credit Outstandings" shall mean, at any
time, the sum of (i) the Tranche A Allocated Portion of the Stated Amount
of the Initial Tender Offer Credit Support and (ii) the amount of all
Unpaid Drawings under the Initial Tender Offer Credit Support which are
participated in by the Tranche Participants pursuant to Section 2.04.
"Tranche A Participant" shall have the meaning provided in
Section 2.04(a).
"Tranche A Scheduled Repayment" shall have the meaning provided
in Section 4.02(b).
"Tranche A Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(b).
"Tranche A Term Loan" shall have the meaning provided in Section
1.01(a).
"Tranche A Term Loan Borrowing Date" shall have the meaning
provided in Section 1.01(a).
"Tranche A Term Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I hereto directly
below the column entitled "Tranche A Term Loan Commitment", as the same may
be (x) reduced from time to time pursuant to Sections 3.03, 4.02 and/or 11
or (y) adjusted from time to time as a result of assignments to or from
such Bank pursuant to Sections 1.13 and/or 14.04.
"Tranche A Term Loan Maturity Date" shall mean September 30,
1999.
"Tranche A Term Note" shall have the meaning provided in Section
1.05(a).
"Tranche B Scheduled Repayment" shall have the meaning provided
in Section 4.02(c).
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"Tranche B Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(c).
"Tranche B Term Loan" shall have the meaning provided in Section
1.01(b).
"Tranche B Term Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I hereto directly
below the column entitled "Tranche B Term Loan Commitment", as the same may
be (x) reduced from time to time pursuant to Sections 3.03, 4.02 and/or 11
or (y) adjusted from time to time as a result of assignments to or from
such Bank pursuant to Sections 1.13 and/or 14.04(b).
"Tranche B Term Loan Maturity Date" shall mean September 30,
2001.
"Tranche B Term Note" shall have the meaning provided in Section
1.05(a).
"Tranche C Bank" shall mean each Bank with a Tranche C Term Loan
Commitment or an outstanding Tranche C Term Loan.
"Tranche C Commitment Commission" shall have the meaning provided
in Section 3.01(f).
"Tranche C Expiration Date" shall mean September 30, 1995.
"Tranche C Scheduled Repayment" shall have the meaning provided
in Section 4.02(n).
"Tranche C Scheduled Repayment Date" shall have the meaning
provided in Section 4.02(n).
"Tranche C Syndication Termination Date" shall mean the earlier
of (x) the 90th day after the Tranche C Term Loan Borrowing Date or (y)
that date upon which the Agents determine in their sole discretion (and
notify the Company) that the primary syndication (and resultant addition of
institutions as Banks pursuant to Section 14.04) relating to Tranche C Term
Loan Commitments has been completed.
"Tranche C Term Loan" shall have the meaning provided in Section
1.01(f).
"Tranche C Term Loan Borrowing Date" shall mean the date on which
the Borrowing of Tranche C Term Loans occurs.
"Tranche C Term Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I hereto directly
below the column entitled "Tranche C Term Loan Commitment", as the same may
be (x) reduced from time
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to time pursuant to Sections 3.03, 4.02 and/or 11 or (y) adjusted from time
to time as a result of assignments to or from such Bank pursuant to
Sections 1.13 and/or 14.04.
"Tranche C Term Loan Maturity Date" shall mean June 30, 2002.
"Tranche C Term Note" shall have the meaning provided in Section
1.05(a).
"Transaction" shall mean, collectively, the consummation of the
Initial Acquisition, the Initial Tender Offer, the Treasury Stock
Repurchase, the Refinancing, the providing of the Letters of Credit, and
the payment of all fees and expenses in connection therewith.
"Treasury Stock Letter of Credit" shall have the meaning provide
in Section 2.01(a)(iii).
"Treasury Stock Repurchase" shall mean the purchase by Tudor of
the Option Shares from the Seller in accordance with Clause Three of the
Purchase Agreement at a price equal to 1,145 Pesetas per Tudor Share plus,
in the case of any such Tudor Shares to be purchased pursuant to the
Seller's put option as described in said Clause Three, accrued interest
thereon at the rate of 9% per annum from the date of the consummation of
the Initial Tender Offer to the date such Option Shares are sold or
purchased in accordance with the terms of the Purchase Agreement.
"Tudor" shall mean Sociedad Espanola Del Acumulador Tudor, S.A.,
a Company incorporated under the laws of the Kingdom of Spain.
"Tudor Convertible Bondholders" shall mean each Person that
legally and beneficially owns Tudor Convertible Bonds from time to time.
"Tudor Convertible Bond Letter of Credit" shall have the meaning
provided in Section 2.01(a)(iv).
"Tudor Convertible Bonds" shall mean the convertible bonds of
Tudor as described in the Purchase Agreement.
"Tudor Guaranty" shall have the meaning provided in Section 9.21
"Tudor Refinancing" shall have the meaning provided in the
recitals to the Eighth Amendment.
"Tudor Refinancing Facility Agreement" shall have the meaning
provided in the recitals to the Eighth Amendment.
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"Tudor Security Documents" shall have the meaning provided in
Section 9.11(b).
"Tudor Shareholders" shall mean each Person that legally and
beneficially owns Tudor Shares as such Persons are identified on Tudor's
share registry from time to time.
"Tudor Shares" shall man the shares of capital stock, 500 Pesetas
par value per share, of Tudor.
"Tudor Shares Pledge Agreement" shall have the meaning provided
in Section 10.17.
"Tudor Percentage" shall mean, at any time, that percentage as is
equal to the aggregate percentage of outstanding common stock of Tudor
owned by the Company and its Subsidiaries (excluding Tudor and its
Subsidiaries).
"2005 Escrow Account" shall have the meaning provided in Section
10.05(xvi).
"2005 Escrow Agreement" shall have the meaning provided in
Section 10.05(xvi).
"2005 Senior Unsecured Exchange Notes" shall mean the notes of
the Company which notes shall not contain any provision for the increase in
the rate of interest as otherwise provided for in the 2005 Senior Unsecured
Notes and shall not limit the transferability of such notes, but shall
otherwise be substantially identical to the 2005 Senior Unsecured Notes
theretofore issued, and which notes shall be issued pursuant to the 2005
Senior Unsecured Note Indenture.
"2005 Senior Unsecured Note Documents" shall mean all documents
or agreements related to the consummation of the 2005 Senior Unsecured
Notes Issuance, including, without limitation, the 2005 Senior Unsecured
Note Indenture, the Preliminary Offering Memorandum, the 2005 Escrow
Agreement and all other documents and agreements entered into in connection
therewith.
"2005 Senior Unsecured Note Exchange" shall mean the exchange of
the 2005 Senior Unsecured Exchange Notes for the 2005 Senior Unsecured
Notes.
"2005 Senior Unsecured Note Exchange Documents" shall mean all
docu ments or agreements relating to the consummation of the 2005 Senior
Unsecured Note Exchange and all other documents and agreements entered into
in connection therewith, each of which 2005 Senior Unsecured Note Exchange
Documents shall be in form and substance satisfactory to the Agents and the
Required Banks.
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"2005 Senior Unsecured Note Indenture" shall mean the Indenture
to be entered into by the Company, pursuant to which the 2005 Senior
Unsecured Notes (including any 2005 Senior Unsecured Exchange Notes) are to
be issued, in form and substance satisfactory to the Agents and the
Required Banks.
"2005 Senior Unsecured Notes" shall mean the Company's Senior
Unsecured Notes due 2005 issued pursuant to the 2005 Senior Unsecured Note
Indenture and, from and after the consummation of the 2005 Senior Unsecured
Note Exchange, all references to the 2005 Senior Unsecured Notes shall be
deemed to include any 2005 Senior Unsecured Exchange Notes issued in
exchange for 2005 Senior Unsecured Notes then outstanding.
"2005 Senior Unsecured Notes Issuance" shall mean the issuance of
the 2005 Senior Unsecured Notes pursuant to the terms contained in
Preliminary Offering Memorandum, dated April 10, 1995.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
----
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time
in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the actuarial present value of the accumulated plan benefits
under the Plan as of the close of its most recent plan year exceeds the
fair market value of the assets allocable thereto, each determined in
accordance with Statement of Financial Accounting Standards No. 87, based
upon the actuarial assumptions used by the Plan's actuary in the most
recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.04(a).
"Unrestricted Collateral" shall mean all Collateral which is not
Restricted Collateral.
"Unrestricted Collateral Secured Portion" shall have the meaning
provided in Section 14.17(b).
"Unutilized Revolving Loan Commitment" with respect to any Bank,
at any time, shall mean such Bank's Revolving Loan Commitment at such time
less the sum of (i) the aggregate outstanding principal amount of Revolving
Loans made by such Bank and (ii) such Bank's Adjusted RL Percentage of the
Revolving Letter of Credit Outstandings at such time.
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"US GAAP" shall mean generally accepted accounting principles in
the United States consistently applied throughout the periods involved
(except to the extent a change is mandated pursuant to said generally
accepted accounted principles, is concurred in by the Company's independent
public accountants and is disclosed in writing with the respective
financial statements where the change is first made).
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Wholly-
Owned Subsidiaries of such Person has a 100% equity interest at such time.
Notwithstanding anything to the contrary contained above, for purposes of
this Agreement (i) Tudor shall be deemed to be a Wholly-Owned Subsidiary of
the Company so long as Tudor is a Subsidiary of the Company and the Company
directly or indirectly owns at least 89% of the fully-diluted equity
interests therein and (ii) CEAc shall be deemed to be a Wholly-Owned
Subsidiary of the Company so long as it is a Subsidiary of the Company and
the Company directly or indirectly owns at least 99.7% of the fully-diluted
equity interests therein.
SECTION 13. The Agents.
----------
13.01 Appointment. The Banks hereby designate each of BTCo, BA
-----------
and BMO as Agents (for purposes of this Section 13, the term "Agent" shall
include BTCo in its capacity as Administrative Agent under this Agreement
and as Collateral Agent pursuant to the Security Documents) to act as
specified herein and in the other Credit Documents. Each Bank hereby
irrevocably authorizes, and each holder of any Note by the acceptance of
such Note shall be deemed irrevocably to authorize, the Agents to take such
action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to
herein or therein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of
the Agents by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Agents may perform any of their duties
hereunder by or through their respective officers, directors, agents,
employees or affiliates.
13.02 Nature of Duties. The Agents shall not have any duties or
----------------
responsibilities except those expressly set forth in this Agreement and the
Security Documents. Neither the Agents nor any of their respective
officers, directors, agents, em ployees or affiliates shall be liable for
any action taken or omitted by it or them hereunder or under any other
Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct. The duties of the
Agents shall be mechanical and administrative in nature; the Agents shall
not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Bank or the holder of any Note;
and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon the
Agents
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any obligations in respect of this Agreement or any other Credit Document
except as expressly set forth herein or therein.
13.03 Lack of Reliance on the Agent. Independently and without
-----------------------------
reliance upon the Agents, each Bank and the holder of each Note, to the
extent it deems appropriate, has made and shall continue to make (i) their
own independent investigation of the financial condition and affairs of the
Company and its Subsidiaries in connection with the making and the
continuance of the Loans and the issuance and assumptions of Letters of
Credit and the taking or not taking of any action in connection herewith
and (ii) their own appraisal of the creditworthiness of the Company and its
Subsidiaries and, except as expressly provided in this Agreement, the
Agents shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans or the issuance and assumption of
the Letters of Credit or at any time or times thereafter. The Agents shall
not be responsible to any Bank or the holder of any Note for any recitals,
statements, information, representations or warranties herein or in any
docu ment, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of this Agreement or
any other Credit Document or the financial condition of the Company and its
Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document, or the financial condition of
the Company and its Subsidiaries or the existence or possible existence of
any Default or Event of Default.
13.04 Certain Rights of the Agents. If the Agents shall request
----------------------------
instructions from the Required Banks with respect to any act or action
(including failure to act) in con nection with this Agreement or any other
Credit Document, the Agents shall be entitled to refrain from such act or
taking such action unless and until the Agents shall have received
instructions from the Required Banks; and the Agents shall not incur
liability to any Person by reason of so refraining. Without limiting the
foregoing, no Bank or the holder of any Note shall have any right of action
whatsoever against the Agents as a result of the Agents acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
13.05 Reliance. Each Agent shall be entitled to rely, and shall
--------
be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or
made by any Person that such Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any
other Credit Document and its duties hereunder and thereunder, upon advice
of counsel selected by the Agents.
13.06 Indemnification. To the extent the Agents are not
---------------
reimbursed and indemnified by the Company, the Banks will reimburse and
indemnify each Agent, in
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proportion to their respective "percentages" as used in determining the
Required Banks, for and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by such Agent in performing their respective
duties hereunder or under any other Credit Document, in any way relating to
or arising out of this Agreement or any other Credit Document; provided
--------
that no Bank shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agents' gross negligence or
willful misconduct.
13.07 The Agents in their Individual Capacities. With respect
-----------------------------------------
to their obligations to make Loans under this Agreement and to issue,
assume or participate in Letters of Credit, each of the Agents shall have
the rights and powers specified herein for a "Bank" and may exercise the
same rights and powers as though they were not performing the duties
specified herein; and the term "Banks," "Required Banks," "holders of
Notes" or any similar terms shall, unless the context clearly otherwise
indicates, include the Agents in their individual capacities. The Agents
may accept deposits from, lend money to, and generally engage in any kind
of banking, trust or other business with any Credit Party or any Affiliate
of any Credit Party as if they were not performing the duties specified
herein, and may accept fees and other consideration from the Company or any
other Credit Party for services in connection with this Agreement and
otherwise without having to account for the same to the Banks.
13.08 Holders. Each Agent may deem and treat the payee of any
-------
Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the
case may be, shall have been filed with such Agent. Any request, authority
or consent of any Person who, at the time of making such request or giving
such authority or consent, is the holder of any Note shall be conclusive
and binding on any subsequent holder, transferee, assignee or indorsee, as
the case may be, of such Note or of any Note or Notes issued in exchange
therefor.
13.09 Resignation by the Agents. (a) Each of the Agents may
-------------------------
resign from the performance of all its functions and duties hereunder
and/or under the other Credit Documents at any time by giving 15 Business
Days' prior written notice to the Company and the Banks. Each such
resignation shall take effect upon the expiration of such 15-day period,
provided that the resignation of the Administrative Agent shall take effect
--------
upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of the Administrative Agent, the Banks
shall appoint a successor Administrative Agent hereunder or thereunder who
shall be a commercial bank or trust company reasonably acceptable to the
Company (it being understood and agreed that any Bank is deemed to be
acceptable to the Company); provided that if there is one or more other
Agents at the time of the Administrative Agent's
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resignation, then if any such Agent consents to act as Administrative
Agent, such Agent shall become the Administrative Agent (although, if there
is more than one such other Agent at the time of the Administrative Agent's
resignation, such Agents must agree upon the successor Administrative Agent
or, in the absence of such Agreement, the Banks shall appoint the successor
Administrative Agent as otherwise provided herein).
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent,
with the consent of the Company, shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent hereunder or
thereunder until such time, if any, as the Banks appoint a successor
Administrative Agent as provided above.
(d) It is understood and agreed that no Person shall be required
to serve as a successor Administrative Agent without the consent of such
Person.
(e) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 20th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Banks
shall thereafter perform all the duties of the Administrative Agent
hereunder and/or under any other Credit Document until such time, if any,
as the Banks appoint a successor Administrative Agent as provided above.
SECTION 14. Miscellaneous.
-------------
14.01 Payment of Expenses, etc. The Company shall: (i) whether
-------------------------
or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses including, without limitation,
any notarial and registration fees, of the Agents (including, without
limitation, the reasonable fees and disbursements of White & Case, Uria &
Menendez, and of local and foreign counsel to the Agents, and allocated
costs of in-house counsel for BA) in connection with the preparation,
execution, delivery, registration and, in the case of any Security Document
filed with a private and/or public authority in the Kingdom of Spain,
filing and performance of this Agreement and the other Credit Documents and
the documents, instruments and transactions referred to herein and therein
and any translation, amendment, supplement, extension, waiver or consent
relating hereto or thereto, of the Agents in connection with their
syndication efforts with respect to this Agreement and of the Agents and,
following and during the continuation of an Event of Default, each of the
Banks in connection with the enforcement of this Agreement and the other
Credit Documents and the documents and instruments referred to herein and
therein (including, without limitation, the reasonable fees and
disbursements of counsel for the Agents and, following and during the
continuation of an Event of Default, for each of the Banks); (ii) pay and
hold each of the Banks harmless from and against any and all present and
future stamp, excise, transfer and other similar taxes with respect to the
foregoing matters and hold each of the Banks harmless from and against any
and all liabilities with respect to or resulting from any delay or omission
(other than to the extent
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attributable to such Bank) to pay such taxes; and (iii) indemnify the
Agents and each Bank, and each of their respective officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all liabilities, obligations (including removal or remedial
actions), losses, damages, penalties, claims, actions, judgments, suits,
costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed
against 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 Agent or any Bank is a party thereto)
related to the entering into and/or performance of this Agreement or any
other Credit Document or the use of any Letter of Credit or the proceeds of
any Loans hereunder or the consummation of any transactions contemplated
herein or in any other Credit Document or the exercise of any of their
rights or remedies provided herein or in the other Credit Documents, or (b)
the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property
owned or at any time operated by the Company or any of its Subsidiaries or
Tudor or any of its Subsidiaries, the generation, storage, transportation,
handling or disposal of Hazardous Materials at any loca tion, whether or
not owned or operated by the Company or any of its Subsidiaries, the non-
compliance of any Real Property with foreign, federal, state and local
laws, regulations, and ordinances (including applicable permits thereunder)
applicable to any Real Property, or any Environmental Claim asserted
against the Company, any of its Subsidiaries, Tudor, any of its
Subsidiaries, or any Real Property owned or at any time operated by the
Company or any of its Subsidiaries or Tudor or any of its Subsidiaries,
including, in each case, without limitation, the reasonable fees and
disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Agents or any Bank set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the
Company shall make the maximum contribution to the payment and satisfaction
of each of the indemnified liabilities which is permissible under
applicable law.
14.02 Right of Setoff. 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 and during the
continuance of an Event of Default, each Bank is hereby authorized at any
time or from time to time, without presentment, demand, protest or other
notice of any kind to the Company or to any other Person, any such notice
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 Bank (including, without limitation, by branches
and agencies of such Bank wherever located) to or for the credit or the
account of the Company or any Guarantor against and on account of the
Obligations and liabilities of the Company or such Guarantor to such Bank
under this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such Bank
pursuant to Section 14.06(b), and all other claims of any nature or
description arising out of or connected with this Agreement or any
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other Credit Document, irrespective of whether or not such Bank shall have
made any demand hereunder and although said Obligations, liabilities or
claims, or any of them, shall be contingent or unmatured.
14.03 Notices. Except as otherwise expressly provided herein,
-------
all notices and other communications provided for hereunder shall be in
writing(including telegraphic, telex, telecopier or cable communication)
and mailed, telegraphed, telexed, telecopied, cabled or delivered: at the
Company's address specified opposite its signature below; if to any Bank,
at its address specified opposite its name on Schedule II below; and if to
an Agent, at its Notice Office; or, if to any Credit Party or an Agent, at
such other address as shall be designated by such party in a written notice
to the other parties hereto and, as to each Bank, at such other address as
shall be designated by such Bank in a written notice to the Company and the
Agents. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier,
be effective when deposited in the mails, delivered to the telegraph
company, cable company or overnight courier, as the case may be, or sent by
telex or telecopier, except that notices and communications to the Agents
and the Company shall not be effective until received by such Agent or the
Company, as the case may be.
14.04 Benefit of Agreement. (a) This 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, however, no Credit
-------- -------
Party may assign or transfer any of its rights, obligations or interest
hereunder or under any other Credit Document without the prior written
consent of the Banks (or the Required Banks if the respective assignor
remains fully obligated for the repayment of any obligations or interests
so assigned, whether pursuant to the original documentation or an
unconditional guaranty in form and substance satisfactory to the Required
Banks) and, provided further, that, although any Bank may transfer, assign
----------------
or grant participations in its rights hereunder, such Bank shall remain a
"Bank" for all purposes hereunder (and may not transfer or assign all or
any portion of its Commitments hereunder except as provided in Section
14.04(b)) and the transferee, assignee or participant, as the case may be,
shall not constitute a "Bank" hereunder and, provided further, that no Bank
----------------
shall transfer or grant any participation under which the participant shall
have rights to approve any amendment to or waiver of this Agreement or any
other Credit Document except to the extent such amendment or waiver would
(i) extend the final scheduled maturity of any Loan, Note or Letter of
Credit (unless such Letter of Credit is not extended beyond the Revolving
Loan Maturity Date) in which such participant is participating, or reduce
the rate or extend the time of payment of interest or Fees thereon (except
in connection with a waiver of applicability of any post-default increase
in interest rates) or reduce the principal amount thereof, or increase the
amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the Total Commitment shall not
constitute a change in the terms of such participation, and that an
increase in any Commitment or Loan shall be permitted without the consent
of any participant if the participant's participation is not increased as a
result thereof), (ii) consent to the assignment
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or transfer by the Company of any of its rights and obligations under this
Agreement or (iii) release all or substantially all of the Collateral under
all of the Security Documents (except as expressly provided in the Credit
Documents) supporting the Loans and/or Letters of Credit in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the
other Credit Documents (the participant's rights against such Bank in
respect of such participation to be those set forth in the agreement
executed by such Bank in favor of the participant relating thereto) and all
amounts payable by the Company hereunder shall be determined as if such
Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of
its Commitments (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans to its parent company and/or any affiliate of such
Bank which is at least 50% owned by such Bank or its parent company or to
one or more Banks or (y) assign all, or if less than all, a portion equal
to at least $5,000,000 in the aggregate for the assigning Bank or assigning
Banks, of such Commitments (and related Obligations) and/or its outstanding
Term Loans hereunder to one or more Eligible Transferees, each of which
assignees shall become a party to this Agree ment as a Bank by execution of
an Assignment and Assumption Agreement in the form of Exhibit P hereto,
provided that, (i) at such time Schedule I shall be deemed modified to
--------
reflect the Commitments (and/or outstanding Term Loans, as the case may be)
of such new Bank and of the existing Banks, (ii) upon surrender of the old
Notes, new Notes will be issued, at the Company's expense, to such new Bank
and to the assigning Bank upon the request of such new Bank or assigning
Bank, such new Notes to be in conformity with the requirements of Section
1.05 (with appropriate modifications) to the extent needed to reflect the
revised Commitments (and/or outstanding Term Loans, as the case may be),
(iii) the consent, which will not be unreasonably withheld, of BTCo and
each Issuing Bank (unless the respective assignment will not involve a
change in the participations in Letters of Credit issued by such Issuing
Bank) shall be required in connection with any such assignment and (iv) the
Administrative Agent shall receive at the time of each such assignment,
from the assigning or assignee Bank, the payment of a non-refundable
assignment fee of (I) in the case of an assignment pursuant to sub-clause
(x) of this clause (b), $1,500 and (II) in the case of an assignment
pursuant to sub-clause (y) of this clause (b), $3,500 and, provided
--------
further, that such transfer or assignment will not be effective until
-------
recorded by the Administrative Agent on the Register pursuant to Section
14.15 hereof. To the extent of any assignment pursuant to this Section
14.04(b), the assigning Bank shall be relieved of its obligations hereunder
with respect to its assigned Commitments. At the time of each assignment
pursuant to this Section 14.04(b) to a Person which is not already a Bank
hereunder and which is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Bank shall provide to the Company and the
Administrative Agent the appropriate Internal Revenue Service Forms (and,
if applicable, a Section 4.04(b)(ii) Certificate) described in Section
4.04(b). To the extent that an assignment of all or any portion of a Bank's
Commitments and related outstanding Obligations pursuant to Section 1.13 or
this Section
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14.04(b) would, at the time of such assignment, result in increased costs
under Section 1.10 or 1.11 from those being charged by the respective
assigning Bank prior to such assignment, then the Company shall not be
obligated to pay such increased costs (although the Company shall be
obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.
14.05 No Waiver; Remedies Cumulative. No failure or delay on the
------------------------------
part of an Agent or any Bank or any holder of any Note in exercising any
right, power or privilege hereunder or under any other Credit Document and
no course of dealing between the Company or any other Credit Party and the
Agents or any Bank or the holder of any Note 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, powers and remedies herein
or in any other Credit Document expressly provided are cumulative and not
exclusive of any rights, powers or remedies which the Agents or any Bank or
the holder of any Note would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agents or any Bank or the holder of any Note to
any other or further action in any circumstances without notice or demand.
14.06 Payments Pro Rata. (a) Except as otherwise provided in
-----------------
this Agreement, the Administrative Agent agrees that promptly after its
receipt of each payment from or on behalf of the Company in respect of any
Obligations hereunder, it shall distribute such payment to the Banks (other
than any Bank that has consented in writing to waive its pro rata share of
--- ----
any such payment) pro rata based upon their respective shares, if any, of
--- ----
the Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the
Credit Documents, or otherwise), which is applicable to the payment of the
prin cipal of, or interest on, the Loans, Unpaid Drawings, Commitment
Commission or Letter of Credit Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than
the total of such Obligation then owed and due to such Bank bears to the
total of such Obligation then owed and due to all of the Banks immediately
prior to such receipt, then such Bank receiving such excess payment shall
purchase for cash without recourse or warranty from the other Banks an
interest in the Obligations of the respective Credit Party to such Banks in
such amount as shall result in a proportional participation by all the
Banks in such amount; provided that if all or any
--------
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<PAGE>
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent
of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein,
the provisions of the preceding Sections 14.06(a) and (b) shall be subject
to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Banks as opposed to
Defaulting Banks.
14.07 Calculations; Computations. (a) The financial statements
--------------------------
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United
States (or the equivalent thereof in any country in which a Foreign
Subsidiary is doing business, as applicable) consistently applied
throughout the periods involved (except as set forth in the notes thereto
or as otherwise disclosed in writing by the Company to the Banks); provided
--------
that, except as otherwise specifically provided herein, (w) all
computations of Company Excess Cash Flow and all computations determining
compliance with Sections 10.08(a), 10.09, 10.10(a), and 10.11(a) inclusive,
shall use accounting principles and policies in conformity with those used
to prepare the historical financial statements of the Company delivered to
the Banks pursuant to Section 8.05(a)(i), (x) all computations of Tudor
Excess Cash Flow and all computations determining compliance with Section
10.08(b) shall utilize accounting prin ciples and policies in conformity
with those used to prepare the historical financial state ments of Tudor
delivered to the Banks pursuant to Section 8.05(a)(ii), (y) all
computations of CEAc Excess Cash Flow and all computations determining
compliance with Section 10.08(c) shall utilize accounting principals and
policies in conformity with those used to prepare the historical financial
statements of CEAc delivered to the Banks pursuant to Section 8.05(e)(i)
and (z) all computations determining compliance with Sections 10.10(b) and
10.11(b) shall utilize accounting principles and policies in conformity
with those used to prepare the pro forma historical financial statements
--- -----
delivered to the Banks pursuant to Section 8.05(e)(ii). For purposes of
determining compliance with Sections 10.10(b) and 10.11(b), (x) Tudor shall
be treated as a Wholly-Owned Subsidiary of the Company so long as the
Company owns at least 89% of the fully diluted equity interests therein,
regardless of whether or not 100% of the shares thereof are acquired
pursuant to the Initial Tender Offer and (y) CEAc shall be treated as a
Wholly-Owned Subsidiary of the Company, so long as the Company directly or
indirectly owns at least 99.7% of the fully diluted equity interests
therein. From and after the Exide European Restructuring Date, all
calculations of financial covenants and financial terms pursuant to this
Agreement shall give pro forma effect to the transfer of Euro Exide (and
any direct Indebtedness of Euro Exide) which is transferred to CEAc
Acquisition Corp.; provided, that pro forma effect shall not be given to
--------
any reductions of Indebtedness of the Company and its other Subsidiaries
(including without limitation pursuant to this Agreement) as a result of
the consummation of the Exide European Refinancing.
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(b) All computations of interest, Commitment Commission and Fees
hereunder shall be made on the basis of a year of 360 days (or, in the case
of interest on Base Rate Loans, 365-days) for the actual number of days
(including the first day but excluding the last day) occurring in the
period for which such interest, Commitment Commission or Fees are payable.
14.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER
--------------------------------------------------------
OF JURY TRIAL. (A) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE
-------------
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL,
EXCEPT AS OTHERWISE PROVIDED IN CERTAIN OF THE SECURITY DOCUMENTS, BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW
YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, THE COMPANY HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY
HEREBY IRREVOCABLY DESIG NATES, APPOINTS AND EMPOWERS CT CORPORATION
SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW
YORK 10019 AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND
ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE
OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE
SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH CREDIT
PARTY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK
CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO
THE AGENT UNDER THIS AGREEMENT. THE COMPANY FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ANY CREDIT PARTY AT ITS ADDRESS SET
FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30
DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT
UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
(B) THE COMPANY 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 AGREEMENT
OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE
(A) ABOVE 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) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
14.09 Counterparts. This Agreement may be executed in any number
------------
of counterparts and by the different parties hereto on separate
counterparts, each of which
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<PAGE>
when so executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Company and the
Agents.
14.10 Effectiveness. This Agreement shall become effective on
-------------
the date (the "Effective Date") on which the Company and each of the Banks
shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Administrative Agent
at its Notice Office or, in the case of the Banks, shall have given to the
Administrative Agent telephonic (confirmed in writing), written or telex
notice (actually received) at such office that the same has been signed and
mailed to it. The Administrative Agent will give the Company and each Bank
prompt written notice of the occurrence of the Effective Date.
14.11 Headings Descriptive. The headings of the several sections
--------------------
and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of
this Agreement.
14.12 Amendment or Waiver; etc. (a) Neither this Agreement nor
-------------------------
any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party
thereto and the Required Banks, provided that no such change, waiver,
--------
discharge or termination shall, without the consent of each Bank (other
than a Defaulting Bank) (with Obligations being directly modified), (i)
extend the final scheduled maturity of any Loan or Note or extend the
stated maturity of any Letter of Credit beyond the Revolving Loan Maturity
Date, or reduce the rate or extend the time of payment of interest or Fees
thereon, or reduce the principal amount thereof (except to the extent
repaid in cash), (ii) release all or substantially all of the Collateral
(except as expressly provided in the Credit Documents) under all the
Security Documents, (iii) amend, modify or waive any provision of this
Section 14.12, (iv) reduce the percentage specified in the definition of
Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the
same basis as the extensions of Term Loans and Revolving Loan Commitments
are included on the Effective Date) or (v) consent to the assignment or
transfer by the Company of any of its rights and obligations under this
Agreement (except to the extent any such rights and obligations are
assigned to a Subsidiary of the Company if, in each such case, the Company
remains unconditionally obligated for the repayment of all amounts so
assigned pursuant to a guaranty or other documentation acceptable in form
and substance to the Required Banks); provided further, that no such
----------------
change, waiver, discharge or termination shall (t) increase the Commitments
of any Bank over the amount thereof then in effect without the consent of
such Bank (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory
reduction in the Total Commitment shall not constitute an increase of the
Commitment of any Bank, and that an increase in the available portion of
any Commitment of any Bank shall not constitute an
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<PAGE>
increase in the Commitment of such Bank), (u) without the consent of each
Issuing Bank, amend, modify or waive any provision of Section 2 or alter
its rights or obligations with respect to Letters of Credit, (v) without
the consent of the Swingline Bank, amend, modify or waive any provision
relating to the rights or obligations of the Swingline Bank or with respect
to Swingline Loans, (w) without the consent of the Agents, amend, modify or
waive any provision of Section 13 as same applies to such Agent or any
other provision as same relates to the rights or obligations of such Agent,
(x) without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent,
(y) without the consent of the Majority Banks of each Tranche which is
being allocated a lesser prepayment, repayment or commitment reduction as a
result of the actions described below (or without the consent of the
Majority Banks of each Tranche in the case of an amendment to the
definition of Majority Banks), amend the definition of Majority Banks or
alter the required application of any prepayments or repayments (or
commitment reductions), as between the various Tranches, pursuant to
Section 4.01 or 4.02 (excluding Sections 4.02(b) and (c)) (although the
Required Banks may waive, in whole or in part, any such prepayment,
repayment or commitment reduction, so long as the application, as amongst
the various Tranches, of any such prepayment, repayment or commitment
reduction which is still required to be made is not altered) or (z) without
the consent of the Supermajority Banks of the respective Tranche, amend,
modify or waive any Scheduled Commitment Reduction, any Tranche A Scheduled
Repayment or Tranche B Scheduled Repayment.
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 14.12(a), the consent of the Required Banks is obtained but the
consent of one or more of such other Banks whose consent is required is not
obtained, then the Company shall have the right, so long as each Letter of
Credit Issuer affected by the actions described in this clause (b) (i.e.,
which has issued Letters of Credit which are participated in by one or more
Banks being replaced) consents thereto and so long as all non-consenting
Banks whose individual consent is required are treated as described in
either clauses (A) or (B) below, to either (A) replace each such non-
consenting Bank or Banks (or, at the option of the Company if the
respective Bank's consent is required with respect to less than all
Tranches of Loans (or related Commitments), to replace only the respective
Tranche or Tranches of Commitments and/or Loans of the respective non-
consenting Bank which gave rise to the need to obtain such Bank's
individual consent) with one or more Replacement Banks pursuant to Section
1.13 so long as at the time of such replacement, each such Replacement Bank
consents to the proposed change, waiver, discharge or termination or (B)
terminate such non-consenting Bank's Commitments (if such Bank's consent is
required as a result of its Commitments) and/or repay each Tranche of
outstanding Term Loans of such Bank which gave rise to the need to obtain
such Bank's consent, in accordance with Sections 3.02(b) and/or 4.01(v),
provided that, unless the
--------
Commitments are terminated, and Loans repaid, pursuant to pre ceding clause
(B) are immediately replaced in full at such time through the addition of
new Banks or the increase of the Commitments and/or outstanding Loans of
existing Banks (who
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in each case must specifically consent thereto), then in the case of any
action pursuant to preceding clause (B) the Required Banks (determined
before giving effect to the proposed action) shall specifically consent
thereto, provided further, that in any event the Company shall not have the
----------------
right to replace a Bank, terminate its Revolving Loan Commitment or repay
its Loans solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to the second
proviso to Section 14.12(a).
14.13 Survival. All indemnities set forth herein including,
--------
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 14.01 and 14.06
shall, subject to Section 14.15 (to the extent applicable), survive the
execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Loans.
14.14 Domicile of Loans. Each Bank may transfer and carry its
-----------------
Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Bank. Notwithstanding anything to the contrary contained herein, to
the extent that a transfer of Loans pursuant to this Section 14.14 would,
at the time of such transfer, result in increased costs under Section 1.10,
1.11, 2.06 or 4.04 from those being charged by the respective Bank prior to
such transfer, then the Company shall not be obligated to pay such
increased costs (although the Company shall be obligated to pay any other
increased costs of the type described above resulting from changes after
the date of the respective transfer).
14.15 Register. The Company hereby designates the Administrative
--------
Agent to serve as the Company's agent, solely for purposes of this Section
14.15, to maintain a register (the "Register") on which it will record the
Commitments from time to time of each of the Banks, the Loans made by each
of the Banks and each repayment in respect of the principal amount of the
Loans of each Bank. Failure to make any such recordation, or any error in
such recordation shall not affect the Company's obligations in respect of
such Loans. With respect to any Bank, the transfer of the Commitments of
such Bank and the rights to the principal of, and interest on, any Loan
made pursuant to such Commitments shall not be effective until such
transfer is recorded on the Register maintained by the Administrative Agent
with respect to ownership of such Commitments and Loans and prior to such
recordation all amounts owing to the transferor with respect to such
Commitments and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of the Commitments
and the Loans shall be recorded by the Administrative Agent on the Register
only upon the acceptance by the Administrative Agent of a properly executed
and delivered Assignment and Assumption Agreement pursuant to Section
14.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Bank shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor
Bank and/or the new Bank. The Company agrees to indemnify the
Administrative Agent from and against any and all losses, claims, damages
and liabilities of whatsoever nature which
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may be imposed on, asserted against or incurred by the Administrative Agent
in performing its duties under this Section 14.15.
14.16 Confidentiality. (a) Subject to the provisions of clause
---------------
(b) of this Section 14.16, each Bank agrees that it will use its best
efforts not to disclose without the prior consent of the Company (other
than to its employees, auditors, advisors or counsel or to another Bank if
the Bank or such Bank's holding or parent company in its sole discretion
determines that any such party should have access to such information,
provided such Persons shall be subject to the provisions of this Section
14.16 to the same extent as such Bank) any information with respect to the
Company or any of its Subsidiaries or Tudor or any of its Subsidiaries
which is now or in the future furnished pursuant to this Agreement or any
other Credit Document and which is designated by the Company to the Banks
in writing as confidential, provided that any Bank may disclose any such
--------
information (a) as has become generally available to the public, (b) as may
be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal regula tory body having or claiming to
have jurisdiction over such Bank or to the Federal Reserve Board or the
Federal Deposit Insurance Corporation or similar organizations (whether in
the United States or elsewhere) or their successors, (c) as may be required
or appropriate in respect to any summons or subpoena or in connection with
any litigation, (d) in order to comply with any law, order, regulation or
ruling applicable to such Bank, (e) to any Agent, the Administrative Agent
or the Collateral Agent and (f) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation
of any of the Notes or Commitments or any interest therein by such Bank,
provided, that such prospective transferee or participant agrees with such
--------
Bank to be bound by the provisions of this Section 14.16.
(b) The Company hereby acknowledges and agrees that each Bank
may share with any of its affiliates any information related to the Company
or any of its Subsidiaries or Tudor or any of its Subsidiaries (including,
without limitation, any non public customer information regarding the
creditworthiness of the Company and its Subsidiaries or Tudor and its
Subsidiaries, provided such Persons shall be subject to the provisions of
this Section 14.16 to the same extent as such Bank).
14.17 Entitlement of Obligations to Restricted and Unrestricted
---------------------------------------------------------
Collateral. (a) The parties hereto hereby agree that all Obligations
----------
hereunder (and as defined in the respective Security Documents), including,
without limitation, the Restricted Collateral Secured Portion of Loans as
described below, are secured by all Unrestricted Collateral in accordance
with the terms of the respective Security Documents.
(b) The parties hereto hereby agree that, for purposes of this
Agreement and the Security Documents, the principal amount of Loans
hereunder at any time secured by Restricted Collateral shall be limited in
aggregate amount to the Restricted Collateral Amount as from time to time
in effect, provided that such limitations shall cease to apply at such
time, if any, as no Senior Notes remain outstanding. The principal portion
of
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Loans from time to time secured by the Restricted Collateral is herein
called the "Restricted Collateral Secured Portion" thereof, which
Restricted Collateral Secured Portion shall be allocated ratably amongst
the Revolving Loans and the Term Loans from time to time outstanding based
upon the relative aggregate outstanding principal amounts thereof. The
parties hereto hereby agree that all repayments of Loans shall first be
allocated to the portion of outstanding Loans in excess of the Restricted
Collateral Secured Portion (such excess in any time outstanding being
herein called the "Unrestricted Collateral Secured Portion") and that only
upon the application of proceeds of Restricted Collateral realized pursuant
to the Security Documents shall the Restricted Collateral Secured Portion
of the Loans be reduced (based upon the receipt of payments by the
respective Banks and the resultant reduction to the Restricted Collateral
Amount in accordance with the definition thereof contained herein). It is
further understood and agreed by the parties hereto that all interest from
time to time outstanding and relating to the Restricted Collateral Secured
Portion of the Loans shall also be secured by the Restricted Collateral.
(c) All Letter of Credit Outstandings from time to time
(excluding Letter of Credit Outstandings relating to the Initial Tender
Offer Credit Support and the Secondary Tender Offer Credit Support), and
any guarantees thereof, shall also be entitled to the benefits of the
security interests created pursuant to the Security Documents in both the
Restricted Collateral and the Unrestricted Collateral.
(d) Each Bank understands that the aggregate principal amount of
its Loans secured from time to time by the Restricted Collateral shall be
limited in principal amount to its pro rata portion (based upon the
--- ----
relative outstanding principal amount of Loans) of the Restricted
Collateral Amount as from time to time in effect, and each Bank agrees to
treat its Loans from time to time outstanding as two separate extensions of
credit, (i) one secured by all Collateral (including Restricted Collateral)
in an amount equal to its pro rata share of the Restricted Collateral
--- ----
Amount from time to time in effect and (ii) the remainder being secured
solely by Unrestricted Collateral.
14.18 Obligation to Make Payments in Dollars. The obligation of
--------------------------------------
the Company to make payment in Dollars of the principal of and interest on
the Notes and any Unpaid Drawings, and any other amounts due hereunder or
under any other Credit Document to the Payment Office of the Agent as
provided in this Agreement shall not be discharged or satisfied by any
tender, or any recovery pursuant to any judgment, which is expressed in or
converted into any currency other than Dollars, except to the extent such
tender or recovery shall result in the actual receipt by the Agent at its
Payment Office on behalf of the Banks or holders of the Notes of the full
amount of Dollars expressed to be payable in respect of the principal of
and interest on the Notes and any Unpaid Drawings, and all other amounts
due hereunder or under any other Credit Document. The obligation of the
Company to make payments in Dollars as aforesaid shall be enforceable as an
alternative or additional cause of action for the purpose of recovery in
Dollars of the amount, if any, by which such actual receipt shall fall
short of the full amount of Dollars expressed to be payable in respect of
the principal of and interest on the Notes and any
-210-
<PAGE>
Unpaid Drawings, and any other amounts due under any other Credit Document,
and shall not be affected by judgment being obtained for any other sums due
under this Agreement or under any other Credit Document.
14.19 Post-Closing Actions. Notwithstanding anything to the
--------------------
contrary contained in this Agreement or the other Credit Documents, the
parties hereto acknowledge and agree that:
(a) Title Insurance and Surveys. The Company will as promptly as
---------------------------
practicable (and in any event no later than thirty (30) days after the
Effective Date) deliver or cause to be delivered to the Collateral Agent:
(i) Mortgage Policies on the Mortgaged Properties as required by
Section 5.14(ii); and
(ii) a survey of each Mortgaged Property as required by Section
5.14(iii).
(b) Landlord-Mortgagee Agreements. With respect to the leasehold
-----------------------------
properties listed and designated as such on Schedule III, the Company
shall, within 20 days after the Effective Date, submit to each landlord
under the relevant lease, a landlord-mortgagee agreement in form and
substance reasonably satisfactory to the Agents and the Collateral Agent,
which agreement shall grant to the Collateral Agent certain rights,
including, but not limited to, the right to enter upon the premises demised
under the relevant lease at any time to inspect or remove personal property
in which the Collateral Agent has been granted a security interest. The
Company agrees to use reasonable efforts to obtain such agreements from
said landlords.
(c) Salina, Kansas Property. At the time the fee title to the
-----------------------
leased property referred to on Schedule III attached hereto as Salina,
Kansas has been reconveyed to the Company or a Subsidiary of the Company,
the Company shall, or shall cause the respective Subsidiary to, take the
actions required pursuant to Section 5.14 with respect to such Property.
(d) Delivery of Leases; Leasehold Mortgages. Within seven (7)
---------------------------------------
days after the Effective Date, the Company shall deliver to the Collateral
Agent copies of leases for the properties listed on Schedule III and
designated as post-closing leases (the "Addi tional Leasehold Properties").
Upon the completion of the review of the leases for the Additional
Leasehold Properties, the Collateral Agent may, to the extent permitted by
such leases, require the lessee thereunder to take the actions required
pursuant to Section 5.14 with respect to such Additional Leasehold
Properties.
(e) Initial Tender Offer Filing Date. At the request of the
--------------------------------
Company, the Initial Tender Offer Filing Date may occur one Business Day
after the Initial Borrowing Date.
-211-
<PAGE>
(f) English Language Schedules. Within thirty (30) days after
--------------------------
the Effective Date, the Company shall deliver to each Bank a true and
correct English translation, certified as a true and correct translation by
an appropriate officer of the Company, of the Schedules hereto that appear
in Spanish.
(g) Security Document Filings. UCC financing statements and
-------------------------
termination statements, assignments of security interests in intellectual
property and Mortgages delivered by the relevant Credit Party on the
Initial Borrowing Date shall be filed in the appropriate governmental
office within 3 Business Days after the Initial Borrowing Date.
All conditions precedent and representations contained in this
Agreement and the other Credit Documents shall be deemed modified to the
extent necessary to effect the foregoing; provided, that all
--------
representations and warranties relating to the Security Documents shall be
required to be true immediately after the relevant Security Document is
delivered pursuant to this Section 14.19. The acceptance of the benefits of
each Credit Event shall constitute a representation, warranty and covenant
by the Company to each of the Banks that the actions required pursuant to
this Section 14.19 will be taken within the relevant time periods referred
to in this Section 14.19 and that, at such time, all representations and
warranties contained in this Agreement and the other Credit Documents shall
then be true and correct without any modification pursuant to this Section
14.19.
14.20 Agreement by Signatories to Fourth Amendment for Benefit of
-----------------------------------------------------------
Tranche C Banks. Each Bank which executes and delivers a copy of the Fourth
---------------
Amendment, by its execution and delivery thereof, agrees (which agreement
shall be binding only on such Bank and its successors), for the benefit of
each Tranche C Bank, that it will not agree to any change, waiver,
modification or amendment of Section 4.02(n) (as added pursuant to the
Fourth Amendment) unless the respective change, waiver, modification or
amendment receives the consent of those Tranche C Banks which would
constitute the Required Tranche C Banks if the percentage "50%" appearing
in the definition thereof instead read "66-2/3%".
* * *
-212-
<PAGE>
EXHIBIT 10.26
FOR REFERENCE PURPOSES ONLY
[COMPOSITE CONFORMED COPY REFLECTING FIRST AMENDMENT AND WAIVER DATED 12TH
JANUARY, 1996, THE SECOND AMENDMENT AND WAIVER DATED 8TH MARCH, 1996 AND THE
THIRD AMENDMENT AND WAIVER DATED 29TH MARCH, 1996.]
DATED 30TH NOVEMBER, 1995
COMPAGNIE EUROPEENNE D'ACCUMULATEURS S.A.
EURO EXIDE CORPORATION LIMITED
EXIDE HOLDING EUROPE
SOCIEDAD ESPANOLA DEL ACUMULADOR TUDOR S.A.
AS THE LEAD BORROWERS
BANKERS TRUST INTERNATIONAL PLC
AS LEAD ARRANGER
BANKERS TRUST COMPANY
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
BANK OF MONTREAL
CITIBANK INTERNATIONAL PLC
AS UNDERWRITERS
BANK OF AMERICA INTERNATIONAL LIMITED
BANK OF MONTREAL
CITIBANK INTERNATIONAL PLC
AS CO-ARRANGERS
BANKERS TRUST COMPANY
AS AGENT
BANKERS TRUST COMPANY
AS SECURITY AGENT
AND
THE LENDERS DESCRIBED HEREIN
______________________________________
FACILITIES AGREEMENT
FF 2,569,000,000
______________________________________
O'MELVENY & MYERS ASHURST MORRIS CRISP
10 Finsbury Square Broadwalk House
London EC2A 1LA 5 Appold Street
London EC2A 2HA
Tel: +44 171 256 8451 Tel: +44 171 638 1111
Fax: +44 171 638 8205 Fax: +44 171 972 7990
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<S> <C> <C>
1. INTERPRETATION...........................................................1
--------------
2. THE FACILITIES..........................................................44
--------------
3. PARTICIPATION OF LENDERS................................................47
------------------------
4. CONDITIONS PRECEDENT....................................................52
--------------------
5. DRAWDOWN PROCEDURES AND SELECTION AND AMOUNT OF CURRENCIES,
-----------------------------------------------------------
ETC.....................................................................58
---
6. REPAYMENT ..............................................................70
---------
7. PREPAYMENT AND CANCELLATION.............................................71
---------------------------
8. INTEREST................................................................75
--------
9. PAYMENTS................................................................79
--------
10. CHANGE IN CIRCUMSTANCES.................................................82
-----------------------
11. FEES, EXPENSES AND STAMP DUTIES.........................................84
-------------------------------
12. REPRESENTATIONS AND WARRANTIES..........................................86
------------------------------
13. UNDERTAKINGS............................................................93
------------
14. EVENTS OF DEFAULT......................................................118
-----------------
15. GUARANTEE..............................................................128
---------
16. THE AGENT AND THE OTHER FINANCE PARTIES................................132
---------------------------------------
17. EVIDENCE OF INDEBTEDNESS...............................................139
------------------------
18. APPLICATION OF MONEYS..................................................140
---------------------
19. PRO RATA PAYMENTS......................................................140
-----------------
20. SET-OFF................................................................141
-------
21. NOTICES................................................................141
-------
22. NO IMPLIED WAIVERS.....................................................142
------------------
23. INVALIDITY OF ANY PROVISION............................................142
---------------------------
24. CONFIDENTIALITY........................................................143
---------------
</TABLE>
(i)
<PAGE>
<TABLE>
<S> <C> <C>
25. CHANGES TO PARTIES.....................................................143
------------------
26. LENDER DECISIONS.......................................................146
----------------
27. INDEMNITIES............................................................146
-----------
28. CERTIFICATES CONCLUSIVE................................................148
-----------------------
29. GOVERNING LAW..........................................................148
-------------
30. JURISDICTION...........................................................148
------------
31. COUNTERPARTS...........................................................149
------------
</TABLE>
SCHEDULES
- ---------
Schedule 1 Commitments and Lending Offices
Schedule 2 Repayment Schedule
Schedule 3 List of Initial Tranche B Borrowers and Guarantors
Schedule 4 Form of Drawdown Request
Schedule 5 Structure of Borrowing Group
Schedule 6 Mandatory Liquid Asset Costs
Schedule 7 Form of Gearing Ratio Certificate
Schedule 8 Form of Deed of Accession
Schedule 9 Form of Transfer Certificate
Schedule 10 Form of Banesto Term Letter of Credit
Schedule 11 Indebtedness to be Refinanced (Tranche B)
Schedule 12 Continuing Indebtedness
Schedule 13 Form of Assignment and Assumption Agreement
Schedule 14 Schedule of Turnover and Assets
(ii)
<PAGE>
THIS AGREEMENT ("AGREEMENT") is made on 30th November, 1995
BETWEEN:-
(1) COMPAGNIE EUROPEENNE D'ACCUMULATEURS S.A., a societe anonyme organised
under the laws of France with its registered office at 5-7 allee des
Pierres Mayettes, 92636 Gennevilliers, France ("CEAC");
(2) EURO EXIDE CORPORATION LIMITED, a limited company organised under the
laws of England with its registered office at Exide House, Atlantic
Square, Station Road, Witham, Essex CM8 2TL, England ("EURO EXIDE");
(3) EXIDE HOLDING EUROPE, a societe anonyme (as successor to Exide Holdings
France S.A.) organised under the laws of France with its registered
office at 5-7 allee des Pierres Mayettes, 92636 Gennevilliers, France
("EHE");
(4) SOCIEDAD ESPANOLA DEL ACUMULADOR TUDOR S.A., a sociedad anonima organised
under the laws of Spain with its registered office at Condesa de
Venadito, 1, 28027 Madrid, Spain ("TUDOR");
(5) BANKERS TRUST INTERNATIONAL PLC, as Lead Arranger;
(6) BANKERS TRUST COMPANY, BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, BANK OF MONTREAL AND CITIBANK INTERNATIONAL PLC, as
Underwriters;
(7) BANK OF AMERICA INTERNATIONAL LIMITED, BANK OF MONTREAL AND CITIBANK
INTERNATIONAL PLC, as Co-Arrangers;
(8) BANKERS TRUST COMPANY, as Agent;
(9) BANKERS TRUST COMPANY, as Security Agent; and
(10) THE LENDERS DESCRIBED HEREIN.
IT IS AGREED AS FOLLOWS:-
1. INTERPRETATION.
--------------
1 Definitions
-----------
In this Agreement, unless the context requires otherwise, the
following expressions shall have the following meanings:-
"ACCEPTABLE ACCOUNTING JURISDICTION" means any country which, as at
the Third Amendment Effective Date, is a full member of the European
Union;
"ACCOUNTING QUARTER" means, subject to Clause 13.3.6, each successive
financial period of the Borrowing Group consisting of three
consecutive months
1
<PAGE>
(as the term "months" is used in the second proviso to the definition
thereof set forth herein), which quarter shall in each case comprise
one such period of five weeks and two such periods of four weeks;
"ACCOUNTANTS REPORT" means collectively (i) the report in the agreed
terms written by Arthur Andersen referring to the Business of CEAC and
its subsidiaries, and various related matters, (ii) the letter of
Arthur Andersen dated 25 May, 1995 regarding the consolidated profit
and loss account of Tudor for the year ended December 31, 1994
classified by designation of expenses and revenues, (iii) the report
in the agreed terms written by Arthur Andersen with respect to the pro
forma consolidated financial statements of the Borrowing Group for the
Accounting Reference Period ended March 31, 1995 and (iv) the report
in the agreed terms written by Arthur Andersen summarising the status
of the audit of the financial statements of Euro Exide and its
subsidiaries for the Accounting Reference Period ended March 31, 1995;
"ACCOUNTING REFERENCE PERIOD" means, in respect of the Borrowing Group
and/or its respective members, as the context requires, each
successive financial year ending on or about 31st December or 31st
March, as the case may be, as such ending date may be altered in
accordance with Clause 13.3.6;
"ACQUIRING GROUP" has the meaning given to it in Clause 13.2.8;
"ADDITIONAL BORROWER" means any person which becomes an additional
Borrower in respect of the relevant Facility or Facilities by virtue
of Clause 2.2.4;
"ADVANCE" means the principal amount of each borrowing made or to be
made by a Borrower under any of the Facilities (and includes a Deemed
Advance and a WCP Advance) or, as the context requires, the principal
amount thereof for the time being outstanding, and "TRANCHE A TERM
ADVANCE", "TRANCHE B MULTICURRENCY TERM ADVANCE", "TRANCHE B
MULTICURRENCY REVOLVING ADVANCE" and "ADVANCES" shall be construed
accordingly;
"AGENT" means Bankers Trust Company acting in its capacity as agent
for the Lenders or such other agent for the Lenders as shall be
appointed pursuant to Clause 16.9;
"AS" means the lawful currency from time to time of Austria.
"APPROVED ACCOUNTING PRINCIPLES" means, subject to Clause 13.3.10,
together, CEAC Approved Accounting Principles, EHE Approved Accounting
Principles, Euro Exide Approved Accounting Principles, Tudor Approved
Accounting Principles and, to the extent at the relevant time there is
any Borrowing Sub-Group other than the CEAC Group, Euro Exide Group or
Tudor Group that has given notice pursuant to sub-clause (a)(iv)(y) of
this definition below, such accounting principles, standards and
practices as are generally accepted in the accounting profession in
the jurisdiction of incorporation or organisation of the Sub-Group
Holding Company for such Borrowing Sub-Group; and, unless otherwise
specified,
2
<PAGE>
(a) the Approved Accounting Principles in respect of any
member or members of:-
(i) the CEAC Group shall be CEAC Approved Accounting
Principles,
(ii) the Euro Exide Group shall be Euro Exide Approved
Accounting Principles,
(iii) the Tudor Group shall be Tudor Approved Accounting
Principles, and
(iv) any other Borrowing Sub-Group (x) that has not
validly given notice pursuant to (y) below, shall be EHE
Approved Accounting Principles, or (y) in respect of which
the Borrowers' Agent has notified the Agent, no later than
sixty days after the transfer to EHE of the shares of the
Sub-Group Holding Company for that Borrowing Sub-Group, that
both such Sub-Group Holding Company is incorporated in an
Acceptable Accounting Jurisdiction and such Borrowing Sub-
Group will be preparing its accounts according to local
generally accepted accounting principles, shall be such
accounting principles, standards and practices as are
generally accepted in the accounting profession in the
jurisdiction of incorporation or organisation of such Sub-
Group Holding Company, and
(b) the Approved Accounting Principles in respect of the
Borrowing Group shall be EHE Approved Accounting Principles;
"ASSETS" means, in relation to a persons or persons under:-
(a) EHE Approved Accounting Principles or CEAC Approved Accounting
Principles, assets (actif) less amortisation and depreciation
(amortissements) and provisions (provisions) determined in
accordance with such Approved Accounting Principles for such
person or, on a consolidated basis, for such persons (as the case
may be);
(b) Euro Exide Approved Accounting Principles, assets less
amortisation and depreciation and provisions determined in
accordance with such Approved Accounting Principles for such
person or, on a consolidated basis, for such persons (as the case
may be); and
(c) Tudor Approved Accounting Principles, activo menos amortizacion
acumulada determined in accordance with such Approved Accounting
Principles for such person or, on a consolidated basis, for such
persons (as the case may be); and
3
<PAGE>
(d) any other Approved Accounting Principles, the accounting
definition of Asset corresponding most closely to the foregoing
under such Approved Accounting Principles;
"AUDITORS" means such firm of accountants as the Borrowers may appoint
in compliance with the provisions of Clause 13.3.3;
"AVAILABILITY PERIOD" means the period commencing on the date of this
Agreement and ending on:-
(a) in the case of the Tranche A Term Facility, the earlier of (i) 60
days after the date of this Agreement, (ii) the date on which the
Tranche A Term Commitments are terminated in full and (iii) the
Initial Drawdown Date;
(b) in the case of the Tranche B Multicurrency Term Facility, the
earlier of (i) 60 days after the date of this Agreement, (ii) the
date on which the Tranche B Multicurrency Term Commitments are
terminated in full and (iii) the Initial Drawdown Date; and
(c) in the case of the Tranche B Multicurrency Revolving Facility,
the earlier of (i) 30th September 2002, (ii) the date on which
the Tranche B Multicurrency Revolving Commitments are terminated
in full, and (iii) if the Initial Drawdown Date does not occur on
or before 60 days after the date of this Agreement, such 60th
day;
"AVAILABLE CURRENCY" means BF, DEM, ESP, FF, GBP, ITL and USD and,
subject to the provisions of Clause 5.1.7, any other currency freely
available to all the Lenders in which dealings regularly occur in the
London interbank market, provided that the Agent has, prior to
selection of such currency, confirmed such availability to the
Borrowers' Agent;
"BANESTO" means La Corporacion Industrial y Financiera de Banesto
S.A., a company organised under the laws of the Kingdom of Spain;
"BANESTO TERM LETTER OF CREDIT" means a letter of credit denominated
in ESP issued to Banesto as beneficiary by an Issuing Lender at the
request of the Borrowers' Agent and made on behalf of Tudor to support
its obligations in respect of the Tudor Convertible Bonds held by
Banesto on the date of this Agreement, and includes any replacement
Banesto Term Letter of Credit issued in accordance with Clause 5.3.4;
"BANESTO TERM LETTER OF CREDIT OUTSTANDINGS" means, at any time, the
maximum aggregate liability of the Issuing Lender under the Banesto
Term Letter of Credit, such liability being calculated by the relevant
Issuing Lender on the basis of its discharge in due course of its
liabilities under the Banesto Term Letter of Credit;
"BF" means the lawful currency from time to time of the Kingdom of
Belgium;
4
<PAGE>
"BORROWERS" means (without duplication) each of the Lead Borrowers and
the Tranche B Borrowers (including the Additional Borrowers) and
"BORROWER" means any one of them;
"BORROWERS' AGENT" means EHE;
"BORROWING GROUP" means (without duplication) the Lead Borrowers and
their respective subsidiaries;
"BORROWING LIMIT" means, for each of the Borrowers, the respective
limits set forth for each of the Facilities in Clause 5.1.2(a);
"BORROWING SUB-GROUP" means each of (i) the CEAC Group, (ii) the Tudor
Group, (iii) the Euro Exide Group and (iv) any direct subsidiary of
EHE (other than, to the extent applicable, CEAC, EF, Euro Exide and
Tudor) together with the subsidiaries from time to time of such direct
subsidiary;
"BUSINESS" means the business of the Parent's subsidiaries in Europe
as described in pp. 41-53 of the Parent's Prospectus dated 28th
September, 1995 relating to its offer to exchange its 10% Senior
Exchange Notes due 2005 for 10% Senior Notes due 2005;
"BUSINESS DAY" means, in respect of each Available Currency, a day
(other than a Saturday, Sunday or public holiday) which is a day on
which banks are open for dealings in such Available Currency in the
London interbank market and on which banks are open for business (and
are not permitted by law to remain closed) in the place where the main
domestic market for such Available Currency is situated;
"BUSINESS PLAN" means a set of five year financial projections,
together with the assumptions forming the basis thereof, prepared by
the management of EHE in respect of the consolidated operations of EHE
and its subsidiaries after the Reorganisation;
"CAPITAL EXPENDITURE" means in relation to a person or group of
persons, expenditure treated as expenditure in respect of tangible
fixed assets (including, for the avoidance of doubt, plant and
equipment) in accordance with the applicable Approved Accounting
Principles and determined for such person or, on a consolidated basis,
for such persons (as the case may be);
"CAPITAL STOCK" has the meaning given to it in each of the Indentures;
"CASH ADVANCE" means an Advance under any Facility (including any WCP
Facility) in which cash is advanced to a Borrower;
"CASHFLOW" means, in respect of the relevant testing period in
relation to a person or group of persons under the applicable Approved
Accounting Principles:
EBITDA:
5
<PAGE>
PLUS (a) decreases in Working Capital during the relevant
period, and losses on fixed asset disposals during
the relevant period to the extent that they have
already been deducted in calculating EBITDA;
(b) increases in provisions to the extent not
previously taken into account in Working Capital
(other than deferred tax provisions), to the
extent not previously added back in calculating
EBITDA;
(c) proceeds from the issuance of shares of capital
stock;
(d) cash income constituting extraordinary or
exceptional items;
(e) Net Cash Proceeds of disposals during the relevant
period, if positive, to the extent not reflected
in calculating EBITDA; and
(f) in the case of EHE only (and to the extent not
otherwise included in EBITDA), any payments made
to EHE pursuant to the terms of the Tax
Integration Agreement and all payments made to EHE
under the CEAC Demand Note and any Financial
Indebtedness owed by a subsidiary of EHE to EHE;
MINUS (g) increases in Working Capital during the relevant
period, and gains on fixed asset disposals during
the relevant period to the extent that they have
already been taken into account in calculating
EBITDA;
(h) Capital Expenditures paid during the relevant
period (to the extent not previously taken into
account in calculating EBITDA);
(i) Tax paid during the relevant period;
(j) in the case of EHE only, (i) the remainder of (x)
Total Debt Service, to the extent paid in cash, in
respect of Financial Indebtedness under the
Finance Documents (but not including payments in
respect of the EHE Subsidiary Note, any note
issued pursuant to Clause 13.2.8(i) or any note
from EHE described in Clause 13.2.8(k)) less (y)
6
<PAGE>
amounts received pursuant to EHE Debt Service
Loans and (ii) Total Debt Service, to the extent
paid in cash, in respect of EHE Post-Closing
Indebtedness;
(k) in the case of CEAC, Tudor and Euro Exide only,
Total Debt Service, to the extent paid in cash, in
respect of (i) Financial Indebtedness under the
Finance Documents (but not including payments in
respect of the CEAC Demand Note and any Financial
Indebtedness owed by a subsidiary of EHE to EHE)
and (ii) Continuing Indebtedness, and amounts
advanced to EHE pursuant to EHE Debt Service
Loans;
(l) the sum of prepayments pursuant to Clauses 7.1 (to
the extent applied pursuant to the provisions
hereof to Tranche A Term Advances or Tranche B
Multicurrency Term Advances only) and 7.3;
(m) cash expenses constituting extraordinary or
exceptional items (including, without limitation,
all cash expenses in connection with the
Restructuring and including, for the avoidance of
doubt, any expenses for or in connection with the
investment described in clause (xiii) of the
definition of "Permitted Investment" herein);
(n) decreases in provisions to the extent not
previously taken into account in Working Capital
(other than deferred tax provisions), if not
previously deducted in calculating EBITDA;
(o) Net Cash Proceeds of disposals during the relevant
period, if negative, to the extent not reflected
in calculating EBITDA;
(p) in the case of the CEAC Group only, the CEAC
extraordinary distribution described in Clause
4.1.1(g); and
(q) in the case of Euro Exide only, payments by Euro
Exide referred to in Clause 7.1(a) of the Master
Agreement to the extent not previously deducted in
calcuating EBITDA;
and determined in accordance with such Approved Accounting Principles
for such person or, on a consolidated basis, for such persons (as the
case may be);
"CEAC" has the meaning given to it in the introduction to this
Agreement;
7
<PAGE>
"CEAC APPROVED ACCOUNTING PRINCIPLES" means such accounting
principles, standards and practices as are generally accepted in the
accounting profession in France from time to time, consistently
applied;
"CEAC DEMAND NOTE" means an unsubordinated unsecured demand promissory
note or other evidence of indebtedness in the original principal
amount of FF 387,000,000 and bearing interest at the rate of 5.25% per
annum issued by CEAC to EHE on the Third Amendment Effective Date as a
distribution of share premium and held by EHE free and clear of
Security Interests other than under the Security Documents;
"CEAC GROUP" means CEAC and its subsidiaries from time to time;
"CHANGE OF CONTROL" means the Parent or any of its subsidiaries
ceasing to own, directly or indirectly, in the aggregate, at least (i)
100% of the issued and outstanding voting shares of EHE (or ceasing to
control the voting rights attributable to any of such shares, whether
by proxy, voting agreement or otherwise), (ii) 100% of the issued and
outstanding voting shares of CEAC (or ceasing to control the voting
rights attributable to any of such shares, whether by proxy, voting
agreement or otherwise), (iii) 100% of the issued and outstanding
voting shares of Euro Exide (or ceasing to control the voting rights
attributable to any of such shares, whether by proxy, voting agreement
or otherwise), (iv) 90.98% of the issued and outstanding voting shares
of Tudor (or ceasing to control the voting rights attributable to any
such shares, whether by proxy, voting agreement or otherwise), as such
ownership percentage in sub-clause (iv) may be increased as a result
of the acquisition by the Parent or any of its subsidiaries of
additional voting shares of Tudor, or (v) with respect to any
Borrowing Sub-Group other than the CEAC Group, Euro Exide Group or
Tudor Group, 100% of the issued and outstanding voting shares of the
Sub-Group Holding Company for that Borrowing Sub-Group and, if that
Sub-Group Holding Company is not the principal operating company
within such Borrowing Sub-Group, such principal operating company (or,
in either such case, ceasing to control the voting rights attributable
to any such shares, whether by proxy, voting agreement or otherwise),
but subject, in the case of sub-clauses (i) to (v) (inclusive), to the
existence of any Directors Qualifying Shares;
"CNTA ADJUSTED SHARE" means USD 750,000;
"COMMITMENT" means in relation to the participation of any Lender in
(i) the Tranche A Term Facility, its Tranche A Term Commitment, (ii)
the Tranche B Multicurrency Term Facility, its Tranche B Multicurrency
Term Commitment and (iii) the Tranche B Multicurrency Revolving
Facility, its Tranche B Multicurrency Revolving Commitment (including
any WCP Commitment) (the Lenders' Commitments collectively, the "TOTAL
COMMITMENTS");
"CONTINUING INDEBTEDNESS" means financial indebtedness of the
Borrowers and their respective subsidiaries identified on Schedule 12,
and in each case all interest and other amounts accrued thereon during
or for the interest period current at any date of determination, each
such item of financial indebtedness
8
<PAGE>
being evidenced by its related agreement, deed or other instrument in
the form in existence on the date of this Agreement, subject to such
changes therein and refinancings thereof as do not materially
prejudice the interests of the Finance Parties under or in connection
with the Finance Documents;
"DANGEROUS SUBSTANCE" means any natural or artificial substance
(whether in a solid or liquid form or in the form of a gas or vapour
and whether alone or in combination with any other substance) (i)
capable of causing harm to man or any other living organism or of
damaging the Environment or causing danger to public health or
welfare, including without limitation any hazardous, toxic or
dangerous waste, which is subject to regulation by any Governmental
Authority under any applicable Environmental Law, or (ii) because of
its quantity, concentration or physical or chemical characteristics,
exposure to which is limited by any applicable Governmental Authority;
"DEBT SERVICE COVER RATIO" means, with respect to the Borrowing Group,
the consolidated ratio of (i) the remainder of EBITDA, less Capital
----
Expenditures, less cash expenses in respect of the Restructuring
----
(other than Capital Expenditures), to (ii) Total Debt Service of the
Borrowing Group (determined in accordance with EHE Approved Accounting
Principles, tested quarterly as at the end of each Accounting Quarter
and calculated as set forth in Clause 13.4.2(a));
"DEED OF ACCESSION" means one or more deeds to be executed by (i) each
Borrower and (ii) each Guarantor (other than, in either case, the Lead
Borrowers) substantially in the form of Schedule 8, subject to
variation in accordance with the laws of the jurisdiction of
incorporation or organisation of the relevant Obligor which relate to
the giving of guarantees and similar undertakings, and with such
amendments thereto as the Agent may reasonably require or permit;
"DEEMED ADVANCE" means a deemed Advance as a result of the operation
of Clause 5.4.3 or a utilisation of a WCP Facility by the issue of a
letter of credit, revolving credit guarantee or some other extension
of credit other than a Cash Advance;
"DEFAULT RATE" has the meaning given to it in Clause 8.4.1;
"DEFAULT INTEREST PERIOD" has the meaning given to it in Clause 8.4.1;
"DEM" means the lawful currency from time to time of Germany;
"DIRECTORS QUALIFYING SHARES" means equity shares in a company (i)
transferred to a director or proposed director of such company for the
sole purpose of satisfying a legal requirement that such director be a
shareholder of that company, provided that such director is required
--------
by law or pursuant to contract (to the extent permitted by applicable
law) to transfer such shares to or at the direction of a member of the
Borrowing Group forthwith (or, if not forthwith, then on demand) upon
such director's ceasing to be a director of such company, or (ii) in a
nominal number transferred to a shareholder in order to comply with
laws requiring more than one shareholder of that company;
9
<PAGE>
provided, that such shareholder is required by law or pursuant to
--------
contract (to the extent permitted by applicable law) to transfer such
shares either to or at the direction of a member of the Borrowing
Group or, in the case of shares in EHE only, to or at the direction of
the Parent or a subsidiary of the Parent;
"DISPOSING GROUP" has the meaning given to it in Clause 13.2.8;
"DRAWDOWN DATE" means:-
(a) in relation to a Cash Advance, the date for the making of such
Advance as specified by the Borrowers' Agent in the relevant
Drawdown Request; or
(b) in relation to a Deemed Advance, the date specified in the
Drawdown Request as being the date for issue of the relevant
Revolving Credit Guarantee, Revolving L/C, Banesto Term Letter of
Credit or SINAC Term Guarantee (as the case may be);
"DRAWDOWN REQUEST" means:
(a) in relation to a Cash Advance, a notice requesting an Advance in
the form set out in Schedule 4 Part A; or
(b) in relation to a Deemed Advance, a notice in the relevant form
set out in Schedule 4 Parts B and C;
"DUE DILIGENCE REPORT" means, together, (i) the reports in the agreed
terms compiled by Messrs. Gide Loyrette Nouel (as French counsel to
the Parent) and counsel to the Parent in each jurisdiction other than
France under the respective laws of which CEAC and certain of its
subsidiaries are organised or incorporated, (ii) (a) the report dated
November 10, 1995, prepared by Uria y Menendez regarding Tudor and its
subsidiaries organised under the laws of Spain and (b) the reports in
the agreed terms compiled by counsel to the Parent in each
jurisdiction other than Spain under the respective laws of which
certain subsidiaries of Tudor are organised or incorporated, and (iii)
the reports in the agreed terms prepared by Lovell White Durrant
regarding Euro Exide and certain of its subsidiaries;
"EBIT" means, in respect of the relevant testing period and in
relation to a person or group of persons under the applicable Approved
Accounting Principles, EBITDA less depreciation on all fixed assets of
and amortisation of goodwill, acquisition costs and other intangible
assets, determined for such person or, on a consolidated basis, for
such persons in accordance with such Approved Accounting Principles;
"EBITDA" means, in respect of the relevant testing period and in
relation to a person or group of persons under the applicable Approved
Accounting Principles, Net Income for that period, determined in
accordance with such Approved Accounting Principles for such person
or, on a consolidated basis, for such persons adding back (if
previously deducted) or, as the case may be, before
10
<PAGE>
any deduction (to the extent that such deduction is made in the
calculation of earnings) for or on account of:-
(a) Total Interest;
(b) Tax charged or credited during the relevant testing period;
(c) depreciation on fixed assets;
(d) amortisation of goodwill, acquisition costs and other intangible
assets;
(e) write-downs, write-offs, minority interests and other non-cash
charges in determining earnings of such person or persons for
that period; and
(f) subject to Clause 13.5(d) (Restrictions on Payment of Dividends,
Etc.) and Clause 14.1.19(b)(iii) (Payments of Dividends, etc.),
dividends and distributions paid in respect of equity during the
relevant period;
and excluding the effect, positive or negative, of items which would
be regarded as extraordinary or exceptional items (which extraordinary
or exceptional items shall include, for the avoidance of doubt, the
cash and non-cash costs of the Restructuring and any purchase
accounting adjustments);
"EF" means Exide France S.A., a societe anonyme organised under the
laws of France with its registered office at 5-7 allee des Pierres
Mayettes, 92636 Gennevilliers, France;
"EHE" means Exide Holding Europe, a societe anonyme organised under
the laws of France with its registered office at 5-7 allee des Pierres
Mayettes, 92636 Gennevilliers, France ("EHE") which is the successor
by merger to Exide Holdings France S.A.;
"EHE APPROVED ACCOUNTING PRACTICES" means such accounting principles,
standards and practices as are generally accepted in the accounting
profession in France from time to time, consistently applied;
"EHE DEBT SERVICE LOAN" means a loan to EHE by any member of the
Borrowing Group other than EHE which, but for the reference to EHE
Debt Service Loans in Clause 13.5(e)(viii), would result in a
violation of Clause 13.5(e) if made by CEAC or any of its
subsidiaries, or but for the reference to EHE Debt Service Loans in
Clause 14.1.19, would constitute an Event of Default under Clause
14.1.19 if made by Tudor or any of its subsidiaries, the proceeds of
which are (i) necessary to enable EHE to satisfy its obligations in
respect of the Tranche A Term Facility (but not allowing, in the
determination of whether it is necessary, for any payments in respect
of the EHE Post-Closing Indebtedness) and (ii) promptly so utilised in
full;
11
<PAGE>
"EHE HYBRID BOND" means an unsubordinated unsecured promissory note or
other evidence of indebtedness in the original principal amount of FF
773,362,239 and bearing interest (taking into account any original
issue discount) of no more than 8% per annum, of which no more than 4%
per annum shall be payable in cash, with principal repayment due in
one payment on the 98th anniversary of the Third Amendment Effective
Date, issued by EHE to Exide International on the Third Amendment
Effective Date and held by Exide International free and clear of
Security Interests other than under the Security Documents, which note
may contain an equity participation feature provided that no payments
may be made pursuant to such feature at any time that either any
amounts remain outstanding under the Finance Documents or any
Commitments remain in effect under this Agreement;
"EHE POST-CLOSING INDEBTEDNESS" means Financial Indebtedness of EHE to
the Parent in an amount equal to the aggregate principal amount of and
accrued interest, if any, on the EHE Pre-Closing Parent Indebtedness
remaining outstanding from the Parent to EHE after the application of
the proceeds of the Loan under the Tranche A Term Facility and the
extraordinary distribution by CEAC described in Clause 4.1.1(g) to the
partial prepayment thereof and any refinancing of such Financial
Indebtedness, provided that such Financial Indebtedness may be
--------
refinanced pursuant to the EHE Hybrid Bond, provided that in the case
--------
of such Financial Indebtedness or refinancing thereof (v) the
aggregate principal amount thereof shall not exceed the remainder of
USD 230,554,883 less FF 372,750,000, (w) the final maturity date of
----
such Financial Indebtedness shall be not less than eight years from
the date of issuance thereof, (x) no principal payments thereunder
shall be due prior to the final maturity thereof, (y) the interest
rate payable thereon shall not exceed 8% per annum and (z) all
covenants therein shall have been approved by the Lenders and,
provided further that if the lender thereof upon such refinancing is
--------
not the Parent or any subsidiary of the Parent then such Financial
Indebtedness shall be subordinated to the Financial Indebtedness
outstanding under the Finance Documents on terms that are no less
favourable to the Lenders than the terms of subordination set forth in
the Parent's 12/1/4/% Senior Subordinated Deferred Coupon Debentures
Due 2004 in effect as of the date hereof in favour of the Senior
Indebtedness (as defined therein);
"EHE PRE-CLOSING PARENT INDEBTEDNESS" means the unsecured loan
outstanding from the Parent to EHE immediately prior to the Initial
Drawdown.
"EHE SUBSIDIARY NOTE" means the unsubordinated unsecured promissory
note in the original principal amount of not more than USD 23,000,000
or the equivalent amount in other currencies issued by EHE and held by
Manos, free and clear of Security Interests other than under the
Security Documents, as consideration for its sale of shares of Tudor
AB to EHE as contemplated by the Structure Memorandum;
"ENVIRONMENT" consists of all, or any, of the following media: the
air, water as ground water, surface water, drinking water supplied,
vapour and ice, and land (both surface and subsurface); and the medium
of the air includes the air within
12
<PAGE>
buildings and air within other natural or manmade structures, above or
below ground, and "ENVIRONMENTAL" shall be construed accordingly;
"ENVIRONMENTAL BUDGET" means a detailed budget showing reasonable
estimates on a site-by-site basis of the aggregate (a) projected
capital expenditures required to achieve or continue compliance by the
Borrowing Group with such Environmental Laws as the members of the
Borrowing Group reasonably expect to be enforced during the period
under the Final Repayment Date; (b) liabilities of the Borrowing Group
in respect of Environmental Claims or Environmental Laws (including
but not limited to all fines, penalties and costs incurred in
connection therewith) during the period until the Final Repayment
Date; and (c) costs of the Borrowing Group that will be incurred to
investigate and remediate Environmental Contamination with respect to
sites owned or operated by any of them (or with respect to which the
Borrowing Group has environmental liability) during the period until
the Final Repayment Date, which budget shall be in scope, form and
substance reasonably satisfactory to the Majority Lenders;
"ENVIRONMENTAL CLAIM" means (i) any threatened or instituted claim,
demand, accusation, allegation or notice of violation, in each case
made in writing, against any Borrower or any Guarantor or any of their
respective subsidiaries (not being a purely vexatious, frivolous or
specious claim) by any person (x) in respect of any loss or liability
suffered or incurred by that person as a result or in connection with
any violation of Environmental Law or (y) giving rise to any remedy or
penalty that may be enforced or assessed by private or public legal
action in connection with Environmental Contamination or (ii) any
remedial action or action to comply that any Borrower or any Guarantor
or any of their respective subsidiaries is obliged to undertake
pursuant to Environmental Law in connection with Environmental
Contamination, or (iii) any application for any interim or final
judicial or administrative decree, injunction, cease and desist order,
abatement order, compliance order, consent order, clean-up order or
enforcement notice, stop notice, improvement notice, prohibition
notice or revocation order against any Borrower or any Guarantor or
any of their respective subsidiaries in respect of Environmental
Contamination;
"ENVIRONMENTAL CONTAMINATION" means the following and the consequences
resulting therefrom: any condition connected with any emission,
release, leakage, spillage, or presence, use, leaching or migration
(in any case whenever occurring), of Dangerous Substances at or from
any site (or the migration of a Dangerous Substance from surrounding
property or groundwater in, into or onto any site) owned or operated
by any Borrower, any Guarantor or any of their respective
subsidiaries, and any residual Dangerous Substance on or under any
site owned or operated by the Borrower, any Guarantor or any of their
respective subsidiaries including (without limitation) the storage,
keeping, handling, labelling, transfer or disposal of Dangerous
Substances, to the extent any of the foregoing results in a breach of
any Environmental Law or has given or may reasonably be expected to
give rise to an Environmental Claim;
13
<PAGE>
"ENVIRONMENTAL EVENT" means any event (whenever occurring) which
constitutes a breach of any Environmental Law or which has given or
may reasonably be expected to give rise to an Environmental Claim;
"ENVIRONMENTAL LAW" means all present and future laws, regulations,
ordinances, permits or other requirements having legal effect in any
jurisdiction in which any member of the Borrowing Group is organised
or incorporated or carries on business or owns assets concerning the
protection of the Environment, human health and safety or the control
of Dangerous Substances;
"ENVIRONMENTAL LICENCE" means any permit, licence, authorisation,
plan, consent order or consent decree of or from any Governmental
Authority;
"ENVIRONMENTAL REPORT" means such reports or other documents from the
Parent, members of the Borrowing Group and/or third parties as may be
reasonably requested by the Agent prior to the Initial Drawdown Date,
in scope, form and substance reasonably satisfactory to the Majority
Lenders, compiling information relating to compliance by the members
of the Borrowing Group with, and liabilities of the members of the
Borrowing Group under, applicable Environmental Laws;
"EQUITY SALE" means the sale or other transfer by any member of the
Borrowing Group of equity securities in another member of the
Borrowing Group, which sale or transfer dilutes the aggregate
percentage equity ownership of the Borrowing Group in the issuer of
such equity securities, other than a sale or transfer only of
Directors Qualifying Shares;
"EQUIVALENT AMOUNT" means the amount of a currency other than FF that
can be purchased with FF calculated on the basis of the Agent's spot
rate of exchange for the purchase of such other currency with FF on
the date such calculation is to be made (such calculation to be made,
for the purpose of determining (a) the amount in currencies other than
FF available to be drawn under the Tranche B Multicurrency Revolving
Facility, on the Rate Fixing Day applicable to the relevant Drawdown
Date, and (b) all matters relating to amounts in currencies other than
FF under the Tranche A Term Facility or the Tranche B Multicurrency
Term Facility, at 9.30 a.m. on the Rate Fixing Day applicable to the
Initial Drawdown);
"ESP" means the lawful currency from time to time of the Kingdom of
Spain;
"EURO EXIDE" has the meaning given to it in the introduction to this
Agreement;
"EURO EXIDE APPROVED ACCOUNTING PRINCIPLES" means such accounting
principles, standards and practices as are generally accepted in the
accounting profession in England, consistently applied;
"EURO EXIDE GROUP" means Euro Exide and its subsidiaries from time to
time;
"EVENT OF DEFAULT" means one of the events specified in Clause 14.1;
14
<PAGE>
"EXIDE INTERNATIONAL" means Exide International, Inc., a corporation
organised under the laws of the State of Delaware;
"EXIDE NOTES" means, together, the Parent's 10-3/4% Senior Notes due
2002, 12-1/4% Senior Subordinated Deferred Coupon Debentures due 2004
and 10% Senior Notes due 2005, in each case issued pursuant to the
relevant Indenture;
"EXPENSE COVER RATIO" means, with respect to the Borrowing Group, the
consolidated ratio of (i) EBITDA to (ii) the sum of (a) Capital
Expenditures plus (b) cash expenses in respect of the Restructuring
----
(other than Capital Expenditures) (determined in accordance with EHE
Approved Accounting Principles, tested quarterly as at the end of each
Accounting Quarter and calculated as set forth in Clause 13.4.2(a)).
"FACILITIES" means the Tranche A Term Facility, the Tranche B
Multicurrency Term Facility and the Tranche B Multicurrency Revolving
Facility (including any WCP Facilities) and "FACILITY" means any one
of them;
"FACILITY AMOUNT" means (i) FF 236,000,000, or the Equivalent Amount
in other Available Currencies, in the case of the Tranche A Term
Facility, (ii) FF 930,000,000, or the Equivalent Amount in other
Available Currencies, in the case of the Tranche B Multicurrency Term
Facility, and (iii) FF 1,403,000,000 or the Equivalent Amount in other
Available Currencies in the case of the Tranche B Multicurrency
Revolving Facility, as in each case the same may be reduced or
cancelled pursuant to the provisions of this Agreement;
"FEES LETTER" means, the letter from the Agent to the Parent in the
agreed terms setting out details of the fees payable pursuant to
Clause 11.1.1(c);
"FF" means the lawful currency from time to time of the Republic of
France;
"FINAL REPAYMENT DATE" means 30th November, 2002;
"FINANCE DOCUMENTS" means this Agreement, the Fees Letter, each Deed
of Accession, each WCP Agreement, each Transfer Certificate, each
Revolving Credit Guarantee, each Revolving L/C, the Banesto Term
Letter of Credit, the SINAC Term Guarantee, the Security Documents and
any other document expressed to be made supplemental to and/or
modifying any of the foregoing or entered into pursuant hereto or
thereto, and "FINANCE DOCUMENT" means any of them;
"FINANCE PARTIES" means the Lead Arranger, Agent, Security Agent,
Underwriters, Co-Arrangers, Lenders, WCP Providers and Issuing
Lenders, and "FINANCE PARTY" means any of them;
"FINANCIAL INDEBTEDNESS" means with respect to any person or group of
persons and without duplication, any indebtedness in respect of or
arising under or in connection with:-
15
<PAGE>
(i) moneys borrowed including, without limitation, on a
contractually subordinated basis;
(ii) any debenture, bond, note or loan stock or other similar
instrument;
(iii) any acceptance or documentary credit (except, in the case of
documentary credits, those issued in support only of
liabilities to trade creditors incurred in the ordinary course
of business and having a term of not more than 90 days);
(iv) receivables sold or discounted in a transaction other than one
in respect of which (a) no recourse exists against any member
of the Borrowing Group and no member of the Borrowing Group has
any obligation to repurchase, or make any payment in respect of
deficiencies in collection of, any receivables, and (b) no
member of the Borrowing Group has the right or obligation to
sell, discount or otherwise dispose of receivables in addition
to those transferred on the initial funding date of the
transaction;
(v) the acquisition cost of any asset to the extent payable after
the time of acquisition or possession by the person liable as
principal obligor for the payment thereof where the deferred
payment is arranged primarily as a method of raising finance or
financing or refinancing the acquisition of the asset acquired
(which, for the avoidance of doubt, shall not include
liabilities to trade creditors incurred in the ordinary course
of business and having a term of not more than 90 days);
(vi) the sale price of any asset to the extent paid before the time
of sale or delivery by the person liable to effect such sale or
delivery where the advance payment is arranged primarily as a
method of raising finance or financing or refinancing the
manufacture, assembly, acquisition or holding of the asset to
be sold;
(vii) finance leases, credit sale or conditional sale agreements
(whether in respect of land, buildings, plant, machinery,
equipment or otherwise) entered into primarily as a method of
raising finance or financing or refinancing the acquisition of
the relevant asset (but not including liabilities under
operating leases);
(viii) the amount payable under any put option or other arrangement
whereby any such person or persons is liable to purchase share
capital or other securities issued;
(ix) any guarantee, indemnity or similar assurance against financial
loss of any person in respect of obligations of the type
described in the preceding paragraphs (i) to (viii);
16
<PAGE>
(x) any guarantee, endorsement or other undertaking of
responsibility for any obligations of any other person, whether
(a) directly or indirectly by agreement to purchase the
Financial Indebtedness of any other person, or (b) through the
purchase of goods or other assets, supplies or services, or
maintenance of working capital or other balance sheet covenants
or conditions, or by way of stock purchase, capital
contribution, advance or loan which, in any case in this
subclause (b), is entered into for the purpose of paying or
discharging any Financial Indebtedness of such other person or
assuring the holder of such Financial Indebtedness or
obligation against loss in respect thereof;
(xi) amounts raised under any other transaction having as a primary,
and not an incidental effect, the commercial effect of a
borrowing;
(xii) debts incurred in the ordinary course of business which remain
unpaid for more than 60 days after their due date for payment,
including for this purpose debts which upon their incurrence
are within the exceptions set forth in paragraph (iii) above
(other than debts which are being diligently contested in good
faith unless the Agent reasonably believes that there is no
reasonable prospect of success); or
(xiii) net amounts payable under any interest rate or currency swap,
collar or other similar agreement or any other hedging or
derivative instrument, the amount of Financial Indebtedness
being attributable thereto being 20% of the face or notional
amount of the relevant agreement, or in each case such lower
percentage as shall be reasonably approved by the Agent;
"FLOTATION" means the listing of any class or series of the shares of
equity capital of any member of the Borrowing Group on any recognised
securities exchange, the inclusion thereof on or in any automated
quotation system or other organised securities market, or any
application for any of the foregoing, other than the status as of the
date of this Agreement of certain of the shares of capital stock of
Tudor as shares listed on the Madrid Stock Exchange;
"GBP" means the lawful currency from time to time of the United
Kingdom;
"GEARING RATIO" means:-
(A) with respect to a Borrowing Sub-Group as at any date,
the consolidated ratio of (a) the remainder of Total Borrowings
less cash, Q ualified Financial Indebtedness and Permitted
----
Investments described in Clauses (ii) to (vi) (inclusive) of
the definition of "Permitted Investments" for such Borrowing
Sub-Group, to (b) the remainder of Net Worth (tested as of such
date for such Borrowing Sub-Group under the relevant Approved
Accounting Principles for such Borrowing Sub-Group), adjusted
by adding the outstanding principal amount of any Qualified
Financial Indebtedness of such Borrowing Sub-Group, less loans
----
or other
17
<PAGE>
advances by any member of such Borrowing Sub-Group to (or
financial receivables of such member from), or Financial
Indebtedness (including without limitation but without
duplication guarantees) of any member of such Borrowing Sub-
Group in respect of, the Parent or any of its subsidiaries
(other than a member of such Borrowing Sub-Group); and
(B) with respect to the Borrowing Group as at any date,
the consolidated ratio of (a) the remainder of Total Borrowings
less cash and Permitted Investments described in Clauses (ii)
----
to (vi) (inclusive) of the definition of "Permitted
Investments" for the Borrowing Group, to (b) the remainder of
Net Worth (tested as of such date for the Borrowing Group under
EHE Approved Accounting Principles) less loans or other
----
advances by any member of the Borrowing Group to (or financial
receivables of such member from), or other Financial
Indebtedness (including without limitation but without
duplication guarantees) of any member of the Borrowing Group in
respect of, the Parent or any of its subsidiaries (other than a
member of the Borrowing Group);
"GOVERNMENTAL AUTHORITY" means any domestic or foreign court or
governmental body, department, agency, commission, authority or
instrumentality;
"GUARANTEES" means the guarantees by the Guarantors pursuant to Clause
15;
"GUARANTOR" means each of the entities identified as such on Schedule
3 and any person which becomes an additional Guarantor by virtue of
Clause 13.2.20;
"INDEBTEDNESS TO BE REFINANCED (TRANCHE B)" means (i) indebtedness of
the Borrowers (other than EHE) and their respective subsidiaries owed
to the persons and (ii) undrawn commitments in respect of such
indebtedness, in the currencies and amounts identified in Schedule 11,
and refinancings of such indebtedness and undrawn commitments between
such date and the Initial Drawdown Date;
"INDEMNITY" means any of the indemnities given pursuant to Clauses
5.7.1, 5.8 and 5.9;
"INDEMNITY LENDER" has the meaning given it in Clause 5.8;
"INDEMNIFIED OBLIGATION" means the obligation in respect of which an
Indemnity is given by an Indemnifying Party pursuant to Clauses 5.7,
5.8 and 5.9, as the case may be;
"INDEMNIFIED PARTY" means:-
(i) in the case of the indemnities given by the Requesting Borrower
in Clauses 5.7 and 5.9, the relevant Issuing Lender and the
Indemnity Lenders respectively; and
18
<PAGE>
(ii) in the case of the indemnity given by the Indemnity Lenders in
Clause 5.8, the relevant Issuing Lender;
"INDEMNIFYING PARTY" means:-
(i) the Requesting Borrower in the case of the indemnities in
Clauses 5.7 and 5.9; and
(ii) any Indemnity Lender in the case of the indemnity in Clause
5.8;
"INDENTURES" means (i) the Indenture dated as of 17th December, 1992
between the Parent and Bank of Montreal Trust Company, as trustee, as
amended by the First Supplemental Indenture dated as of 3rd January,
1995, (ii) the Indenture dated as of 17th December, 1992 between the
Parent and The Bank of New York, as trustee, as amended by the First
Supplemental Indenture dated as of 3rd January, 1995, and (iii) the
Indenture dated as of 28th April, 1995 between the Parent and The Bank
of New York as trustee, as amended by the First Supplemental Indenture
dated as of 16th August, 1995;
"INFORMATION MEMORANDUM" means the document containing information
relating to the Business to be prepared in connection with this
Agreement by the Agent and the Borrowers' Agent and to be distributed
by the Agent to the Lenders and potential Lenders;
"INITIAL CEAC GROUP" means the CEAC Group on 18th May, 1995;
"INITIAL DRAWDOWN" means the making of the first Cash Advance
hereunder;
"INITIAL DRAWDOWN DATE" means the date of the Initial Drawdown;
"INSURANCES" means the insurance effected by each Borrower in relation
to its respective assets and business in accordance with Clause
13.2.6;
"INTELLECTUAL PROPERTY" means all patents and patent applications,
trade and/or service marks and trade and/or service mark applications
(and all goodwill associated with such applications), all brand and
trade names, all copyrights and rights in the nature of copyright, all
design rights, all registered designs and applications for registered
designs, all trade secrets, know-how and all other intellectual
property rights now or in the future owned by the members of the
Borrowing Group throughout the world or the interests of any member of
the Borrowing Group in any of the foregoing now or in the future,
together with the benefit of all present and future agreements entered
into or the benefit of which is enjoyed by any member of the Borrowing
Group relating to the use or exploitation of any of the aforementioned
rights;
"INTEREST PAYMENT DATE" means, in relation to a Cash Advance, the date
determined pursuant to Clause 8.2;
19
<PAGE>
"INTEREST PERIOD" means a period by reference to which interest is
calculated and payable on a Cash Advance or an overdue sum, and
includes a Default Interest Period;
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other
similar agreement or arrangement designed to protect the Borrowers
against fluctuations in interest rates;
"INVENTORY" means, with respect to any person, all goods, merchandise
and other personal property which are held by such person for sale or
lease, including those held for display or demonstration, and includes
all stock-in-trade of such person;
"ISSUING LENDER" means any Lender which issues a Revolving Credit
Guarantee, Revolving L/C, Banesto Term Letter of Credit or SINAC Term
Guarantee pursuant to the terms hereof, in its capacity as issuer
thereof;
"ITL" means the lawful currency from time to time of the Republic of
Italy;
"KNIGHT WENDLING REPORT" means a report by Knight Wendling in the
agreed terms concerning the manufacturing costs of Tudor and its
subsidiaries;
"LEAD BORROWERS" means CEAC, EHE, Euro Exide and Tudor, or any of
them;
"LENDER" means any Original Tranche A Term Lender, any Original
Tranche B Multicurrency Term Lender and any Original Tranche B
Multicurrency Revolving Lender or, as the case may be, an assignee or
Transferee directly or indirectly therefrom to whom rights and/or
obligations are assigned or transferred in accordance with Clause 25.2
or 25.3, and includes a successor of any such person;
"LENDING OFFICE" means in relation to a Lender, the office or offices
through which it is acting for the purpose of this Agreement;
"LIBOR" means, in relation to any Cash Advance or any overdue sum:-
(a) the rate determined by the Agent to be the arithmetic mean
(rounded upwards, if necessary, to the nearest five decimal
places)of the offered quotations for deposits in the relevant
Available Currency for a period equal to the Interest Period
relating to that Advance (or overdue sum) which appear on the
Telerate Display Screen page number 3750 (or such other page(s)
as may replace such page from time to time on that system) at or
about 11.00 a.m. (London time) on the relevant Rate Fixing Day;
or
(b) if no such offered quotations appear on the relevant page as
aforesaid the arithmetic mean (rounded upwards, if necessary, to
the nearest five decimal places) of the respective rates, as
supplied to the Agent at its request, quoted by the Reference
Lenders to prime lenders in
20
<PAGE>
the London Interbank Market at or about 11.00 a.m. (London time)
on the relevant Rate Fixing Day for the offering of deposits in
the relevant Available Currency and in an amount comparable to
the amount of, and for a period equal to the Interest Period
relating to, that Advance (or overdue sum) for delivery on the
first day of that Interest Period;
"LOAN" means the aggregate principal amount of all Advances for the
time being outstanding under this Agreement and "TRANCHE A TERM LOAN",
"TRANCHE B MULTICURRENCY TERM LOAN" and "TRANCHE B MULTICURRENCY
REVOLVING LOAN" shall be construed accordingly;
"MAJORITY LENDERS" means one or more Lenders, the sum of whose
Relevant Amounts equals or exceeds sixty six and two thirds per cent.
(66-2/3%) of the aggregate of the Relevant Amounts of all the Lenders;
"MANDATORY LIQUID ASSET COSTS" means, in relation to each Lender, the
additional cost to such Lender of complying with (i) the relative
reserve asset ratio required by the Bank of England from time to time
(if any), expressed as a percentage per annum and calculated as set
forth in Schedule 6, or (ii) any analogous requirement of any central
banking or financial regulatory authority imposed at the date of this
Agreement in respect of the funding or maintenance of commitments or
loans of the type contemplated hereby and applicable to a specific
currency;
"MANOS" means Manos Verwaltungsgesellschaft mbH, a Gesellschaft mit
beschrankter Haftung organised under the laws of the Federal Republic
of Germany;
"MARGIN" means 1.5% for the period commencing on the Initial Drawdown
Date and ending on the last day of the fourth full Accounting Quarter
following such date, and thereafter a figure determined by reference
to Column III of the table below upon the Borrowing Group achieving
both (i) the Debt Service Cover Ratio set forth in Column I below and
(ii) the Gearing Ratio set forth in Column II below tested as of the
last day of the immediately preceding Accounting Quarter:-
<TABLE>
<CAPTION>
================================================================================
COLUMN I COLUMN II COLUMN III
Debt Service Cover Ratio Gearing Ratio Margin
- --------------------------------------------------------------------------------
<S> <C> <C>
2.00:1.00 0.90:1.00 1.25%
- --------------------------------------------------------------------------------
2.50:1.00 0.60:1.00 1.00%
================================================================================
</TABLE>
provided that:-
(a) there shall be no decrease in the Margin if there has occurred an
Event of Default or a Potential Event of Default which is
continuing and the Margin shall increase to 1.5% until such time
as such Event
21
<PAGE>
of Default or Potential Event of Default is no longer continuing,
whereupon the Margin shall be determined as aforesaid; and
(b) any reduction or increase in the Margin shall take effect as from
the date of receipt by the Agent of the relevant accounts in
accordance with Clause 13.4.2 (on the basis that in the case of a
reduction or increase taking effect during an Interest Period the
interest payable on the Interest Payment Date will reflect such
reduction or increase on a time apportioned basis);
"MARGIN STOCK" means margin stock within the meaning of Regulations G,
T, U and X of the Board of Governors of the Federal Reserve System of
the U.S.;
"MASTER AGREEMENT" means the Master Agreement dated 30th September,
1994 among Euro Exide, Gemala (Isle of Man) Limited, B.I.G. Batteries
Group Limited and PT Sapta Panji Manggala, as amended from time to
time hereafter by amendments that do not materially prejudice the
interests of the Lenders hereunder.
"MATERIAL ADVERSE EFFECT" has the meaning given thereto in Clause
1.2.5;
"MATERIAL SUBSIDIARY" means (i) any Borrower, (ii) any Guarantor and
(iii) any subsidiary of any thereof whose gross turnover exceeds 1% of
the gross turnover of the Borrowing Group or whose Assets exceeds 1%
of the Assets of the Borrowing Group, in each case under EHE Approved
Accounting Principles; provided that the aggregate gross turnover of
--------
the Non-Material Subsidiaries shall not exceed 5% of the aggregate
gross turnover of the Borrowing Group and the aggregate Assets of the
Non-Material Subsidiaries shall not exceed 5% of the Assets of the
Borrowing Group, in either case under EHE Approved Accounting
Principles. For this purpose:-
(a) in the case of a person which itself has subsidiaries, the
calculation shall be made by using the consolidated gross
turnover or Assets of it and its subsidiaries; and
(b) the calculation of consolidated gross turnover or Assets shall be
made by reference to:-
(i) the accounts of the relevant subsidiary (or, as the case
may be, a consolidation of the accounts of it and its
subsidiaries) used for the purpose of the then latest
unaudited quarterly or audited annual consolidated
accounts of the Borrowing Group delivered to the Agent
under Clause 13.3 or, in the case of a newly-acquired or
formed subsidiary for which no such accounts have as yet
been required to be so delivered pursuant to Clause 13.3,
the most recent quarterly or annual accounts of the
relevant subsidiary (or, as the case may be, a
consolidation of the accounts of it and its subsidiaries),
22
<PAGE>
provided such accounts report a period ending no earlier
than six months from the date of such calculation; and
(ii) the unaudited quarterly or audited annual consolidated
accounts (as the case may be) of the Borrowing Group on a
pro forma basis together with any newly-acquired
subsidiary described in sub-clause (b)(i) of this
definition;
provided that during the period ending 31st December, 1995, such
--------
accounts shall, for purposes of determining turnover, be such
accounts, in the case of the CEAC Group and the Tudor Group, for
the period ended 31st December, 1994 and, in the case of the Euro
Exide Group, for the period ended 31st March, 1995, and for
purposes of determining Assets such accounts shall be as at 31st
August, 1995 as set forth on Schedule 14.
"NET CASH PROCEEDS" means the remainder of cash proceeds arising from
disposal of any fixed asset or any part of the business of the
Borrowing Group or any member thereof, or from any Equity Sale, after
deducting (i) in the case of such a disposal, required repayment of
Financial Indebtedness secured by such asset and/or Financial
Indebtedness incurred to purchase such asset or business (or any
refinancings thereof), (ii) reasonable costs related to such Equity
Sale, incurrence of Financial Indebtedness or disposal (including, for
the avoidance of doubt, those incurred in connection with disposals
forming part of the Restructuring), (iii) reasonable provision for
Taxes attributable to such Equity Sale or disposal and (iv) payments
of such proceeds (or part thereof) required to be made to any person
not a member of the Borrowing Group pursuant to the terms of a
contractual arrangement as such terms exist on the date of this
Agreement, provided that such arrangement was not entered into in
--------
contemplation of this Agreement;
"NET INCOME" means, in respect of any period and in relation to any
person or group of persons under:-
(a) EHE Approved Accounting Principles or CEAC Approved Accounting
Principles, the remainder of (i) the resultat consolide, less
----
(ii) the part des tiers dans le resultat, determined in
accordance with such Approved Accounting Principles for such
person or, on a consolidated basis, for such persons (as the case
may be) for such period;
(b) Euro Exide Approved Accounting Principles, the profit shown on
the profit and loss account of such person or, on a consolidated
basis, determined in accordance with such Approved Accounting
Principles for such persons or, on a consolidated basis, for such
persons (as the case may be) for such period;
(c) Tudor Approved Accounting Principles, the resultado despues de
impuestos determined in accordance with such Approved Accounting
23
<PAGE>
Principles for such person or, on a consolidated basis, for such
persons (as the case may be) for such period; and
(d) any other Approved Accounting Principles, the accounting
definition of "Net Income" corresponding most closely to the
foregoing under such Approved Accounting Principles;
"NET TRANCHE B MULTICURRENCY REVOLVING COMMITMENT" means, in relation
to any Lender, its Tranche B Multicurrency Revolving Commitment less,
to the extent it is a WCP Provider, the amount of its WCP Commitments
pursuant to Clause 3.6.1 from time to time;
"NET WORTH" means, at any time, in respect of any period and in
relation to any person or group of persons, under:-
(a) EHE Approved Accounting Principles or CEAC Approved Accounting
Principles, the net worth (capitaux propres) of such person or,
on a consolidated basis, such persons (as the case may be),
excluding, in each case, minority interests (la part des tiers
dans le capital) as derived from the then latest audited accounts
of such person or persons, in each case as determined for such
person or, on a consolidated basis, for such persons (as the case
may be) in accordance with such Approved Accounting Principles;
(b) Euro Exide Approved Accounting Principles, the aggregate of the
paid up share capital of such person or, on a consolidated basis,
such persons, the amounts standing to the credit of the share
premium account and any capital redemption reserve plus the
----
aggregate amount standing in the capital and revenue reserves,
less all minority interests, in each case as determined for such
----
person or, on a consolidated basis, for such persons (as the case
may be) in accordance with such Approved Accounting Principles;
(c) Tudor Approved Accounting Principles, the equity of such person
or, on a consolidated basis, such persons, less all minority
interests, in each case as determined for such person or, on a
consolidated basis, for such persons (as the case may be) in
accordance with such Approved Accounting Practices; and
(d) any other Approved Accounting Principles, the accounting
definition of "Net Worth" corresponding most closely to the
foregoing under such Approved Accounting Principles;
"NON-MATERIAL SUBSIDIARY" means a member of the Borrowing Group which
is not a Material Subsidiary;
"OBLIGOR" means each Borrower, each Guarantor and Exide International;
"OPERATING BUDGET" means a budget for the Borrowing Group in form and
scope reasonably satisfactory to the Agent and consistent with the
financial
24
<PAGE>
reporting of the Borrowing Group and with the Business Plan (including
budgeted statement of income, and sources and uses of cash and balance
sheets);
"ORIGINAL TRANCHE A TERM LENDERS" means the Underwriters in their
capacity as the initial Tranche A Term Facility Lenders;
"ORIGINAL TRANCHE B MULTICURRENCY REVOLVING LENDERS" means the
Underwriters in their capacity as the initial Tranche B Multicurrency
Revolving Facility Lenders;
"ORIGINAL TRANCHE B MULTICURRENCY TERM LENDERS" means the Underwriters
in their capacity as the initial Tranche B Multicurrency Term Lenders;
"ORIGINAL TERM LOAN LENDERS" means the Underwriters in their capacity
as the initial Tranche A Term Facility Lenders and Tranche B
Multicurrency Term Facility Lenders;
"PAKKASAKKU" means Pakkasakku OY, a company organised under the laws
of the Republic of Finland;
"PAKKASAKKU GROUP" means, so long as Pakkasakku is not a member of
another Borrowing Sub-Group, Pakkasakku and its subsidiaries from time
to time;
"PARENT" means Exide Corporation, a corporation organised under the
laws of Delaware with its chief executive offices at 1400 North
Woodward Avenue, Bloomfield Hills, Michigan 48304, United States of
America;
"PARENT CREDIT AGREEMENT" means the Credit Agreement dated as of
August 30, 1994 among the Parent, various financial institutions,
Bankers Trust Company, Bank of America National Trust and Savings
Association and Bank of Montreal, as agents, and Bankers Trust
Company, as administrative agent, as amended to the date of this
Agreement and as amended from time to time hereafter by amendments
that do not materially prejudice the interests of the Lenders
hereunder;
"PARTICIPATION" means, in relation to a Lender and a Facility, its
right, title, interest and obligations in relation to such Facility,
namely:-
(a) its right to receive its Participation Proportion of principal
and interest in respect of outstanding Advances under that
Facility (including, in the case of the Tranche B Multicurrency
Term Facility and Tranche B Multicurrency Revolving Facility, its
right to be indemnified under Clause 5.9 in respect of its
Participation Proportion of the Revolving Credit Guarantees,
Revolving L/Cs, Banesto Term Letter of Credit and SINAC Term
Guarantee and its right to any consequential payments pursuant to
Clause 3.7.1); and
(b) its obligation to participate in its Participation Proportion in
future Advances up to the limit of that Facility;
25
<PAGE>
"PARTICIPATION PROPORTION" means, generally, in relation to a Lender
and a Facility, the proportion in which that Lender has agreed to
participate in that Facility pursuant to Clause 3.1 (Basis of
Participation) and subject to Clause 3.6 (The WCP Facilities);
"PAYMENT" has the meaning set forth in Clause 14.1.19(b);
"PERMITTED ASSUMED DEBT" means Financial Indebtedness in respect of a
Tranche B Multicurrency Term Loan of one member of a Borrowing Sub-
Group assumed by a member of another Borrowing Sub-Group in connection
with any transaction described under clause (ix)(b) of the definition
of "Permitted Investment", Clause 13.2.8(g)(ii), Clause 13.2.9(d), or
Clause 13.2.12(x), provided that the Borrowers' Agent has provided to
--------
the Agent the following:
(a) an assignment and assumption agreement in substantially the
form of Schedule 13;
(b) legal opinions addressed to the Agent and the Lenders from
reputable English counsel acceptable to the Agent and reputable
counsel acceptable to the Agent in the jurisdiction in which
the member of the Borrowing Group assuming the Financial
Indebtedness is organised or incorporated, in each case, to the
effect that such member is bound to the terms of the Financial
Indebtedness being assumed to the same extent as if it were the
original borrower of such Financial Indebtedness hereunder,
each such opinion to be in form and substance satisfactory to
the Agent; and
(c) a Certificate substantially in the form of Schedule 7
demonstrating that, after giving effect to such assumption on a
pro forma basis the Gearing Ratio for each of the Borrowing
Sub-Groups (to the extent relevant) shall not be greater than
1.25:1.00.
"PERMITTED INDEBTEDNESS" means, in relation to any person or persons
in the Borrowing Group other than EHE:-
(i) Financial Indebtedness outstanding under any of the Facilities;
(ii) the Continuing Indebtedness (and refinancings thereof),
provided that the principal amount thereof shall not be
increased after the date of this Agreement and all Continuing
Indebtedness comprising bills discounted or other similar
arrangements shall be discontinued without the making of any
further advances thereunder following the date of this
Agreement;
(iii) finance leases, hire purchase and conditional sale agreements
in relation to which the maximum aggregate liability on
termination of such leases or agreements of such person or
persons and the other members of the Borrowing Group would not
exceed in aggregate FF 30,000,000 or the Equivalent Amount;
26
<PAGE>
(iv) guarantees, indemnities or bonds given in the ordinary course
of its trading activities;
(v) Financial Indebtedness of the Borrowing Group arising from a
loan or credit permitted by Clause 13.2.12;
(vi) Financial Indebtedness of any person which, by way of
acquisition, becomes a member of the Borrowing Group after the
date of this Agreement where that Financial Indebtedness was
subsisting in each case prior to the date of the person's
acquisition by a member of the Borrowing Group and that
Financial Indebtedness was not incurred in contemplation of or
in connection with the acquisition, and refinancings of such
Financial Indebtedness, provided that the principal amount of
such Financial Indebtedness shall not be increased after the
date of such acquisition above the amount outstanding on such
date or, if greater, the maximum amount available to be drawn
under the documentation governing such Financial Indebtedness
as in effect on such date;
(vii) Financial Indebtedness of members of the Borrowing Group in
connection with the provision of customs bonds required in the
ordinary course of trading of the Borrowing Group;
(viii) Permitted Subordinated Debt;
(ix) guarantees, indemnities or similar assurances given by one
member of the Borrowing Group in respect of obligations of
another member of the Borrowing Group, the guaranteed
obligations in each case in this paragraph (ix) being
themselves permitted under this Agreement;
(x) Financial Indebtedness not falling within any other paragraph
of this definition in a principal amount which, for the
Borrowing Group in the aggregate, does not exceed FF 50,000,000
(or the Equivalent Amount);
(xi) any other Financial Indebtedness of the Borrowing Group
incurred with the consent of the Agent (acting on the
instructions of the Majority Lenders);
(xii) overdraft and working capital facilities backstopped by and in
an aggregate principal amount not exceeding the aggregate
amount of the relevant Revolving Credit Guarantees and
Revolving L/Cs; and
(xiii) Financial Indebtedness arising under Interest Rate Agreements
meeting the requirements of Clause 13.2.21;
provided that in no circumstance shall (a) any guarantee or similar
undertaking by any member of the Borrowing Group (including EHE) in
respect of any Financial Indebtedness of the Parent or any of its
subsidiaries (other than a member of the Borrowing Group), or (b) any
guarantee or similar undertaking
27
<PAGE>
by any member of any Borrowing Sub-Group in respect of any Financial
Indebtedness of EHE (other than pursuant to the Finance Documents)
constitute Permitted Indebtedness;
"PERMITTED INVESTMENT" means, in relation to any person in the
Borrowing Group:-
(i) cash;
(ii) commercial paper maturing not more than nine months from the
date of issue and rated at least A-1 by Standard & Poor's
Ratings Group or P-1 by Moody's Investors Service;
(iii) any deposit of not more than one year's maturity with, or
acceptance maturing not more than one year after issue accepted
by, a bank or credit institution which has a combined capital
and surplus and undistributable profits of not less than FF
1,000,000,000 (or the Equivalent Amount) and whose short term
unsecured, unsubordinated debt rating is at least A-1 by
Standard & Poor's Ratings Group or P-1 by Moody's Investors
Service;
(iv) securities issued or directly and fully guaranteed or insured
by the governments of Germany, Switzerland, France, Great
Britain or the United States of America (or, up to an amount of
FF 5,000,000 or its equivalent, of Spain) or any agency or
instrumentality thereof having maturities of not more than one
year from the date of acquisition;
(v) repurchase obligations with a term of not more than seven days
fully collateralised by underlying securities of the types
described in paragraphs (ii) and (iii) above entered into with
any bank meeting the qualifications specified in paragraph
(iii) above;
(vi) debt securities having not more than one year until final
maturity and listed on a recognised stock exchange and rated at
least Aa by Moody's Investors Service or AA by Standard and
Poor's Ratings Group;
(vii) loans or credits permitted pursuant to Clause 13.2.12;
(viii) investments in the ordinary course of the trading business of
the relevant person;
(ix) equity investments (not including investments or acquisitions
contemplated by the following clause (x)) by such person in
another person which is (a) a subsidiary of such person or (b)
another member of the Borrowing Group (to the extent not
already described in sub-clause (a) above), other than EHE or
EF, provided in the case of sub-clause (b) above that the
--------
Borrowers' Agent has provided to the Agent a certificate
substantially in the form of Schedule 7 demonstrating that,
after giving effect to such equity investment on a
28
<PAGE>
pro forma basis the Gearing Ratio for each of the Borrowing
Sub-Groups, in each case to the extent relevant, shall not be
greater than 1.25:1.00;
(x) ownership of shares of or other equivalent interests in
subsidiaries in the respective amounts in effect at the date
hereof and, to the extent permitted hereunder, acquisition from
third party owners of additional such shares or interests;
(xi) investments of USD 3,000,000 made within nine months of 1st
October, 1994 and an additional USD 3,000,000 made within 18
months of 1st October, 1994, in each case pursuant to and in
accordance with the Sale Agreement dated 1st October, 1994
between the State Treasury of the Republic of Poland and CEAC;
(xii) investments in equity shares of Sonnenschein outstanding on the
date hereof and not beneficially owned by members of the
Borrowing Group, provided that the purchase consideration for
--------
such Sonnenschein equity shares is shares of the Parent which
are lent to CEAC by EHE, such loan being refinanced in its
entirety by a demand promissory note issued on the Third
Amendment Effective Date in the original principal amount of
FF86,239,212.05 which promissory note is repaid in full and
canceled on or about the Third Amendment Effective Date;
(xiii) investments comprising the purchase consideration for the
acquisition of equity shares of Exide Batteries Limited by Euro
Exide as a result of the exercise by Gemala (Isle of Man)
Limited of its option under the Master Agreement to require
Euro Exide to purchase such equity shares in accordance with
the terms of the Master Agreement; and
(xiv) in the case of Tudor, investments comprising the purchase
consideration for the acquisition of equity shares of Tudor and
Sociedad Portuguesa do Acumulador Tudor S.A., a Portuguese
company, in each case, outstanding on the date hereof and not
beneficially owned by members of the Borrowing Group;
"PERMITTED SECURITY INTEREST" means, in relation to any person in the
Borrowing Group:-
(i) Security Interests granted with the consent of the Agent
(acting on the instructions of the Majority Lenders);
(ii) liens arising and subsisting by operation of law and in the
ordinary course of business activities;
(iii) rights of set-off existing in the ordinary course of trading
activities between any person in the Borrowing Group and its
respective suppliers or customers, and rights of set-off
arising by operation of
29
<PAGE>
law by virtue of the provision to such person of bank clearing
facilities or overdraft facilities permitted hereunder;
(iv) any retention of title to goods supplied to any person in the
Borrowing Group where such retention is permitted by the
relevant person in the ordinary course of its trading
activities and on customary terms;
(v) Security Interests securing Financial Indebtedness referred to
in paragraph (vi) of the definition of "Permitted Indebtedness"
where that Security Interest was subsisting in each case prior
to the date of the person's acquisition by a member of the
Borrowing Group and that Security Interest was not granted in
contemplation of or in connection with the acquisition,
provided that the principal Financial Indebtedness secured by
any such Security Interest shall not be increased after the
date of such acquisition;
(vi) Security Interests securing the Continuing Indebtedness on the
date hereof, provided that the principal Financial Indebtedness
secured by any such Security Interest shall not be increased
after the date of this Agreement;
(vii) Security Interests covering assets the subject of equipment and
finance leases, hire purchase, conditional sale or similar
arrangements entered into by a member of the Borrowing Group
which are permitted by this Agreement;
(viii) Security Interests arising in respect of any escrow
arrangements put into place for the purpose of a disposal or
acquisition by a member of the Borrowing Group permitted by
this Agreement; and
(ix) Security Interests not falling within any other paragraph of
this definition securing Financial Indebtedness (including
interest and fees relating thereto) which, for the Borrowing
Group in the aggregate, does not exceed FF 5,000,000 (or the
Equivalent Amount) at any one time;
"PERMITTED SUBORDINATED DEBT" means unsecured Financial Indebtedness
of one of the Lead Borrowers (other than EHE) provided that either (i)
such Financial Indebtedness is subordinated to the Financial
Indebtedness outstanding under the Finance Documents upon terms in all
respects reasonably satisfactory to the Agent taking into
consideration the market in or into which it is issued, or (ii) the
terms of subordination of such Financial Indebtedness provide, without
limitation, that:
(a) such Financial Indebtedness shall not amortise prior to the
final date of maturity, which date shall be no earlier than
30th November, 2003;
30
<PAGE>
(b) no amount in respect of principal of such Financial
Indebtedness (by way of purchase, redemption or otherwise)
shall be paid until all amounts which may be or become payable
under the Finance Documents have been irrevocably paid in full
and all Commitments hereunder shall have terminated, except on
terms and conditions reasonably satisfactory to the Majority
Lenders and the Agent;
(c) no amount in respect of interest on such Financial Indebtedness
may be paid until all amounts which may be or become payable
under the Finance Documents have been irrevocably paid in full
and all Commitments hereunder shall have terminated, except on
terms and conditions reasonably satisfactory to the Majority
Lenders and the Agent;
(d) no default in respect of such Financial Indebtedness shall
arise and the lender thereof shall waive any available remedies
as a result thereof until all amounts which may be or become
payable under the Finance Documents have been irrevocably paid
in full and all Commitments hereunder shall have terminated;
(e) each lender in respect of such Financial Indebtedness shall
agree that it will not accelerate any such Financial
Indebtedness or otherwise declare it prematurely payable,
enforce any such Financial Indebtedness (to the maximum extent
permitted by law), petition for or otherwise take any steps
with a view to any insolvency, liquidation, re-organization,
administration or dissolution proceedings or any voluntary
arrangement or assignment for the benefit of creditors or any
similar proceedings, including without limitation any event
referred to in Clause 14.1.5 to Clause 14.1.10 (inclusive)
involving any member of the Borrowing Group or otherwise
exercise any rights or pursue any remedy for the recovery of
such Financial Indebtedness or in respect of any breach of
covenant, misrepresentation or non-observance of any provision
of such Financial Indebtedness, in each case, until all amounts
which may be or become payable under the Finance Documents have
been irrevocably paid in full and all Commitments hereunder
shall have been terminated; and
(f) each lender in respect of such Financial Indebtedness shall
agree to turn over to the Agent all payments and distributions
received in respect of any proceeding referred to in Clause
14.1.5 to Clause 14.1.10 (inclusive) involving any member of
the Borrowing Group, and any other amount paid in a manner
inconsistent with clauses (a) and (b) of this definition, for
application by the Agent to the satisfaction of outstandings
under this Agreement until all amounts which may be or become
payable under the Finance Documents have been irrevocably paid
in full and all Commitments hereunder shall have been
terminated;
31
<PAGE>
"PIBOR" means, in relation to any Cash Advance or any overdue sum
denominated in FF where such Advance is made by, or overdue sum is
owed to, a PIBOR-Eligible Lender:-
(a) the rate determined by the Agent to be the arithmetic
mean (rounded upwards, if necessary, to the nearest five
decimal places) of the offered quotations for deposits
in FF for a period equal to the Interest Period relating
to that Advance (or overdue sum) which appear on the
Telerate Display Screen page number 20041 (or such other
page(s) as may replace such page from time to time on
that system) at or about 11.00 a.m. (Paris time) on the
relevant Rate Fixing Day; or
(b) if no such offered quotations appear on the relevant
page as aforesaid the arithmetic mean (rounded upwards,
if necessary, to the nearest five decimal places) of the
respective rates, as supplied to the Agent at its
request, quoted by the Reference Lenders to prime
lenders in the Paris interbank market at or about 11.00
a.m. (London time) on the relevant Rate Fixing Day for
the offering of deposits in FF and in an amount
comparable to the amount of, and for a period equal to
the Interest Period relating to, that Advance (or
overdue sum) for delivery on the first day of that
Interest Period;
"PIBOR-ELIGIBLE LENDER" means a Lender which has notified the Agent in
writing of the ability of such Lender to fund FF-denominated Cash
Advances in the Paris interbank market;
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of
notice or the lapse of time or the making of any determination or the
fulfilment of any condition, will constitute an Event of Default,
provided that such notice, lapse of time, determination or condition
is in any case specified or referred to in the relevant Event of
Default as set forth in Clause 14.1;
"QUALIFIED FINANCIAL INDEBTEDNESS" means, with respect to any
Borrowing Sub-Group, Financial Indebtedness of such Borrowing Sub-
Group to EHE to the extent only that such Financial Indebtedness is
represented by a note which is held by EHE and which is effectively
pledged, giving rise to a first priority perfected Security Interest,
in favour of the Security Agent on behalf of the Lenders to secure
obligations under the Finance Documents up to the amount of the
Security Reference Amount and in any event exceeding the principal
amount and any accrued but unpaid interest on such note;
"RATE FIXING DAY" means, in relation to a Cash Advance, the Business
Day being two Business Days prior to its Drawdown Date and, in
relation to any Interest Period, the Business Day being two Business
Days prior to the first day of that Interest Period; provided that, in
relation to a Cash Advance denominated
32
<PAGE>
in GBP the Rate Fixing Day shall be the Drawdown Date or, as the case
may be, the first day of the relevant Interest Period;
"RECEIVABLES" means, with respect to any person, all rights of such
person to payment for goods sold or leased or for services rendered,
whether or not they have been earned by performance and includes all
book debts due to such person;
"RECOVERY" has the meaning given to it in Clause 19.1;
REFERENCE LENDERS" means, subject to Clause 25.5.2, Bankers Trust
Company, Bank of America National Trust and Savings Association, Bank
of Montreal and Citibank, N.A.;
"RELEVANT AMOUNTS" means, in relation to a Lender, the aggregate from
time to time of (a)(i) its Commitments or (ii) after the making of the
Tranche A Term Advance and/or Tranche B Multicurrency Term Advances,
its Tranche B Multicurrency Revolving Commitment and all Tranche A
Term Advances and/or Tranche B Multicurrency Term Advances made by it
or (b) if the Commitments have been terminated, all Advances made by
it then outstanding;
"RELEVANT INTELLECTUAL PROPERTY" means Intellectual Property which is
material to the business, operations or assets of any member of the
Borrowing Group;
"REORGANISATION" means the reorganisation with respect to certain
members of the Borrowing Group as set forth in Annex I to the Ninth
Amendment to the Parent Credit Agreement;
"REPAYMENT DATES" means the dates commencing on November 30, 1996 and
detailed in Schedule 2;
"REPAYMENT SCHEDULE" means the repayment schedule for the Term
Facilities which is set out in Schedule 2;
"REQUESTING BORROWER" has the meaning specified in Clause 5.7.1;
"RESERVATIONS" means limitations on enforceability of legal documents
dictated by local law and used as qualifications in legal opinions
delivered to and accepted by the Agent in connection with the Initial
Drawdown, the accession of a Borrower or a Guarantor or the incurrence
of Permitted Assumed Debt;
"RESTRICTED SUBSIDIARY" has the meaning assigned to it in each of the
Indentures;
"RESTRUCTURING" means the restructuring, reorganisation, consolidation
and rationalisation of the operations, facilities, administrative and
managerial functions, labour force and organizational structure of the
Borrowing Group for the purpose of effecting (i) cost savings, (ii) a
more efficient tax structure, (iii) elimination or reduction of
inefficient or obsolete operations or facilities, (iv) a
33
<PAGE>
more effective administrative or managerial structure, which may
include, among other things, (a) the consolidation or merger between
or among members of the Borrowing Group, (b) the transfer of assets
between members of the Borrowing Group, (c) the disposition of assets,
or (d) the closing of facilities, in the case of sub-clauses (a) to
(d), to the extent permitted by the Finance Documents;
"REVOLVING CREDIT GUARANTEE" means a guarantee denominated in an
Available Currency undertaken and issued by an Issuing Lender pursuant
to the Tranche B Multicurrency Revolving Facility at the request of
the Borrowers' Agent made on behalf of a Requesting Borrower;
"REVOLVING CREDIT GUARANTEE OUTSTANDINGS" means the maximum aggregate
liability of the Issuing Lenders under all Revolving Credit Guarantees
then in issue, each such liability being calculated by the relevant
Issuing Lender on the basis of its discharge in due course of its
liabilities under the relevant Revolving Credit Guarantees;
"REVOLVING L/C" means a letter of credit denominated in an Available
Currency undertaken and issued by an Issuing Lender pursuant to the
Tranche B Multicurrency Revolving Facility at the request of the
Borrowers' Agent made on behalf of a Requesting Borrower;
"REVOLVING L/C OUTSTANDINGS" means the maximum aggregate liability of
the Issuing Lenders under all Revolving L/Cs then in issue, each such
liability being calculated by the relevant Issuing Lender on the basis
of its discharge in due course of its liabilities under the relevant
Revolving L/Cs;
"REVOLVING LENDERS" means, initially, the Original Tranche B
Multicurrency Revolving Lenders and shall include any other Lender
participating in the Tranche B Multicurrency Revolving Facility;
"SAME DAY FUNDS" means funds settled for value on the same day through
a clearing system relevant for the currency concerned and such other
funds as the Agent shall specify as being customary at the time for
such settlement;
"SECURITY AGENT" means Bankers Trust Company as agent for the Finance
Parties under the Security Documents or any other person as may from
time to time hold the whole or any part of the security created
thereby pursuant to Clause 16.10;
"SECURITY DOCUMENTS" means each of (i) the Share Pledge Agreement
dated as of the date hereof between the Security Agent, on behalf of
the Lenders, and EHE relating to the pledge by EHE of all of the
issued and outstanding shares of capital stock of CEAC owned by it
which shall secure EHE's obligations as a Borrower under the Tranche A
Facility in an amount equal to EHE's obligations in respect of the
Tranche A Facility and as a Guarantor in respect of the Tranche B
Facility in an aggregate amount, subject to Clause 3.4.2, not to
exceed the Security Reference Amount, (ii) the Share Charge dated as
of the date hereof between the Security Agent, on behalf of the
Lenders, and the Parent relating to
34
<PAGE>
the pledge by the Parent of the issued and outstanding shares of
capital stock of Euro Exide owned by it which shall secure EHE's
obligations as a Tranche A Borrower and as a Guarantor of the Tranche
B Facility in an aggregate amount, together with the document
described in sub-clause(v), not to exceed USD 500,000, (iii) the
Pledge of Shares dated as of the date hereof between the Security
Agent, on behalf of the Lenders, and EHE relating to the pledge by EHE
of all of the issued and outstanding shares of capital stock of Tudor
owned by it which shall secure EHE's obligations as a Tranche A
Borrower and as a Guarantor of the Tranche B Facility in an aggregate
amount not to exceed the CNTA Adjusted Share, (iv) the Deed Conferring
Security and Other Rights Over Share Sale Proceeds and Monies
Deposited dated as of the date hereof between the Security Agent, on
behalf of the Lenders and EHE relating to the pledge by EHE of its
right to certain proceeds from the sale of the shares of capital stock
of CEAC, Tudor Euro Exide, EF, Tudor AB, Sonnak, Pakkasakku, and any
other shares pledged pursuant to pledge agreements entered into
between the Security Agent and EHE from time to time in accordance
with Clause 13.2.8(i) or 13.2.8(k), (v) the Share Charge between the
Security Agent, on behalf of the Lenders, and EHE relating to the
pledge by EHE of all of the issued and outstanding shares of capital
stock of Euro Exide owned by it to secure EHE's obligations as a
Tranche A Borrower and as a Guarantor in respect of the Tranche B
Facility in an aggregate amount, not to exceed USD 250,000, (vi) the
Share Pledge Agreement dated as of the Third Amendment Effective Date
between the Security Agent, on behalf of the Lenders, and EHE relating
to the pledge by EHE of all of the issued and outstanding shares of
capital stock of EF owned by it which shall secure EHE's obligations
as a Borrower under the Tranche A Facility in an amount equal to EHE's
obligations in respect of the Tranche A Facility and as a Guarantor in
respect of the Tranche B Facility in an amount, subject to Clause
3.4.2, not to exceed the Security Reference Amount, (vii) the Share
Pledge Agreement dated as of the Third Amendment Effective Date
between the Security Agent, on behalf of the Lenders, and EF relating
to the pledge by EF of all of the issued and outstanding shares of
capital stock of CEAC owned by it which shall secure EF's obligations
as a Guarantor of EHE's obligations in respect of the Tranche A
Facility in an amount equal to such obligations and as a Guarantor in
respect of the Tranche B Facility in an amount, subject to Clause
3.4.2, not to exceed the Security Reference Amount, (viii) the
Receivable Pledge Agreement dated as of the Third Amendment Effective
Date between the Security Agent, on behalf of the Lenders, and EHE
relating to the pledge by EHE of the CEAC Demand Note which shall
secure EHE's obligations in respect of the Tranche A Facility in an
amount equal to such obligations and as a Guarantor in respect of the
Tranche B Facility in an amount, subject to Clause 3.4.2, not to
exceed the Security Reference Amount, (ix) the Pledge Agreement dated
as of the Third Amendment Effective Date between the Security Agent,
on behalf of the Lenders, and Exide International relating to the
pledge by Exide International of the EHE Hybrid Bond which shall
secure EHE's obligations in respect of the Tranche A Facility in an
amount equal to such obligations and as a Guarantor in respect of the
Tranche B Facility in an amount, subject to Clause 3.4.2, not to
exceed the Security Reference Amount, (x) the Share Pledge Agreement
dated as of the Third Amendment Effective Date between the Security
Agent, on behalf of the Lenders, and EHE relating to the pledge by EHE
of all of the issued and outstanding shares of capital stock of
35
<PAGE>
Tudor AB owned by it which shall secure EHE's obligations in respect
of the Tranche A Facility and as a Guarantor in respect of the Tranche
B Facility in an aggregate amount, subject to Clause 3.4.3, not to
exceed the CNTA Adjusted Share, (xi) the Share Pledge Agreement dated
as of the Third Amendment Effective Date between the Security Agent,
on behalf of the Lenders, and EHE relating to the pledge by EHE of all
of the issued and outstanding shares of capital stock of Sonnak owned
by it which shall secure EHE's obligations in respect of the Tranche A
Facility and as a Guarantor in respect of the Tranche B Facility in an
aggregate amount, subject to Clause 3.4.3, not to exceed the CNTA
Adjusted Share, (xii) the Share Pledge Agreement dated as of the Third
Amendment Effective Date between the Security Agent, on behalf of the
Lenders, and EHE relating to the pledge by EHE of all of the issued
and outstanding shares of capital stock of Pakkasakku owned by it
which shall secure EHE's obligations in respect of the Tranche A
Facility and as a Guarantor in respect of the Tranche B Facility in an
aggregate amount, subject to Clause 3.4.3, not to exceed the CNTA
Adjusted Share, (xiii) the Note Pledge Agreement dated as of the Third
Amendment Effective Date between the Security Agent, on behalf of the
Lenders, and Manos relating to the Pledge by Manos of the EHE
Subsidiary Note which shall secure Manos's obligations as a Guarantor
in respect of the Tranche A Facility and as a Guarantor in respect of
the Tranche B Facility in an amount, subject to Clause 3.4.2, not to
exceed the Security Reference Amount, (xiv) the Share Pledge Agreement
dated as of the Third Amendment Effective Date between the Security
Agent, on behalf of the Lenders, and Manos relating to the pledge by
Manos of all of the issued and outstanding shares of capital stock of
Tudor Holdings which shall secure Manos' obligations as a Guarantor in
respect of the Tranche A Facility or as a Borrower or Guarantor in
respect of the Tranche B Facility in an aggregate amount, subject to
Clause 3.4.3, not to exceed the CNTA Adjusted Share and (xv) any share
and/or note pledge agreements entered into between the Security Agent
and EHE from time to time in accordance with Clause 13.2.8(i) or
13.2.8(k), in each case as the same may be amended from time to time
in accordance with the terms hereof;
"SECURITY INTEREST" means any mortgage, charge (fixed or floating),
pledge, lien, right of set-off hypothecation, trust, assignment by way
of security, reservation of title, or any other security interest
whatsoever, howsoever created or arising or any other agreement or
arrangement (including, without limitation, a sale and repurchase
arrangement) having the practical effect of conferring security, and
any agreement to enter into, create or establish any of the foregoing;
"SECURITY REFERENCE AMOUNT" means USD 434,744,405
"SINAC" means Societa Industriale Accumulatori Srl, a company
organised under the laws of the Republic of Italy;
"SINAC TERM GUARANTEE" means a guarantee denominated in ITL undertaken
and issued by an Issuing Lender at the request of the Borrower's Agent
and made on behalf of SINAC, and includes any replacement SINAC Term
Guarantee issued in accordance with Clause 5.2.4;
36
<PAGE>
"SINAC TERM GUARANTEE OUTSTANDINGS" means, at any time, the maximum
aggregate liability of the Issuing Lenders under the SINAC Term
Guarantee, such liability being calculated by the relevant Issuing
Lender on the basis of its discharge in due course of its liabilities
under the SINAC Term Guarantee;
"SONNAK" means Tudor Sonnak A.S., a company organised under the laws
of the Kingdom of Norway;
"SONNAK GROUP" means, so long as Sonnak is not a member of another
Borrowing Sub-Group, Sonnak and its subsidiaries from time to time;
"SONNENSCHEIN" means Accumulatorenfabrik Sonnenschein GmbH, a company
organised under the laws of the Federal Republic of Germany and
registered in Budingen, Germany;
"STRUCTURE MEMORANDUM" means the memorandum dated March 13, 1996
prepared by the Parent and Morgan Stanley & Co. Incorporated
describing the transactions among members of the Borrowing Group
contemplated by the amendments made to this Agreement with effect from
the Third Amendment Effective Date;
"SUB-GROUP HOLDING COMPANY" means, with respect to any Borrowing Sub-
Group, the company in that Borrowing Sub-Group that is a direct
subsidiary of EHE; provided that the Sub-Group Holding Company for (i)
the CEAC Group shall be CEAC, (ii) the Euro Exide Group shall be Euro
Exide and (iii) the Tudor Group shall be Tudor;
"SUPPLY AGREEMENTS" means the long term supply agreements in the form
of Schedule 6.1.8 to the Stock Purchase Agreement relating to the
shares of CEAC between the Parent and FIAT SpA and SICIND SpA, each of
which is a company organised under the laws of the Republic of Italy,
relating to the acquisition by EHE of equity shares in CEAC;
"SYNDICATION" has the meaning set forth in Clause 3.5;
"TAXES" means and includes all present and future income and other
taxes, levies, assessments, imposts, deductions, charges, duties,
compulsory loans and withholdings whatsoever and wheresoever imposed
and any charges in the nature of taxation together with interest
thereon and penalties and fines with respect thereto, if any, and any
payments made on or in respect thereof; and "TAX" and "TAXATION" shall
be construed accordingly;
"TAX INTEGRATION AGREEMENT" means an agreement, in form and substance
satisfactory to the Agent between CEAC and EHE relating to the
integration fiscale of EHE and its subsidiaries organised under the
laws of France, as such agreement may be amended from time to time in
a manner not materially prejudicial to the interests of the Lenders
hereunder;
"TERM FACILITIES" means, together, the Tranche A Term Facility not in
excess of the Tranche A Term Commitments and the Tranche B
Multicurrency Term
37
<PAGE>
Loan Facility not in excess of the Tranche B Multicurrency Term Loan
Commitments (as such Commitments may be reduced in accordance with the
terms of this Agreement);
"THIRD AMENDMENT EFFECTIVE DATE" means the date on which the
conditions precedent set forth in Clause 4.2 of the Third Amendment
and Waiver dated 29th March, 1996 to this Agreement are satisfied or
waived;
"TOTAL BORROWINGS" means, at any time and in respect of any person or
persons, the aggregate outstanding amount of all Financial
Indebtedness of such person or, on a consolidated basis, persons;
provided that Financial Indebtedness of one member of the Borrowing
Group to or in respect of (by way, for example, of guarantee) another
member of the Borrowing Group shall not be taken into account in
calculating the Total Borrowings of the Borrowing Group, and Financial
Indebtedness of one member of a Borrowing Sub-Group to or in respect
of (by way, for example, of guarantee) another member of the same
Borrowing Sub-Group or another Borrowing Sub-Group shall not be taken
into account in calculating the Total Borrowings of such Borrowing
Sub-Group (though, for the avoidance of doubt, Financial Indebtedness
of one member of a Borrowing Sub-Group to or in respect of EHE shall
be taken into account in calculating the Total Borrowings of such
Borrowing Sub-Group);
"TOTAL DEBT SERVICE" means, in respect of any period and any person or
persons, the aggregate of (a) Total Interest and (b) the aggregate
principal amount of Financial Indebtedness of such person or, on a
consolidated basis, persons (as applicable) scheduled to be repaid
(having regard to any reductions in respect thereof due to previous
prepayment of any such amount where such prepayment occurred in a
previous period) during such period under the terms and conditions
relating to such Financial Indebtedness;
"TOTAL INTEREST" means, in respect of the relevant testing period, the
aggregate of all interest (including amounts in the nature of interest
in connection with any interest rate and/or currency swap, cap, floor,
collar or other similar arrangement), guarantee fees, commitment fees
and other costs and fees of a similar nature (not including, to the
extent otherwise included, costs of issuance of debt, equity or
warrants or amortisation of debt discount) due in respect of Total
Borrowings (including, for purposes of calculating "Total Borrowings"
and notwithstanding sub-clause (xiii) of the definition of "Financial
Indebtedness", 100% of the face or notional amount of each interest
rate or currency swap, collar or other similar agreement or other
hedging or derivative instrument as the Financial Indebtedness
attributable thereto) and payable by the Borrowing Group during such
period (including interest, the interest finance charge element of
hire-purchase, credit sale and conditional sale agreements and of
lease rentals under finance leases), less the sum of all----interest
(including amounts in the nature of interest in connection with any
interest rate and/or currency swap, cap, floor, collar or other
similar arrangement), guarantee fees, commitment fees and other costs
and fees of a similar nature payable to the Borrowing Group during
such period;
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"TRANCHE A TERM COMMITMENT" means, in relation to the participation of
any Lender in the Tranche A Term Facility, the amount or Equivalent
Amount of such amount stated opposite its name in Schedule 1 (or in
the case of a Transferee, the amount or Equivalent Amount of such
amount stated in the Schedule to the relevant Transfer Certificate as
being transferred to that Transferee) in relation to that Facility, in
each case as the same may be transferred (in whole or in part),
cancelled, reduced, varied or terminated in accordance with the terms
of this Agreement;
"TRANCHE A BORROWER" means EHE;
"TRANCHE A TERM FACILITY" means the Tranche A term loan facility not
in excess of the Tranche A Term Commitments granted to EHE hereunder
(as the same may be reduced or cancelled in accordance with the terms
of this Agreement);
"TRANCHE B BORROWER" means each of CEAC, Tudor, Euro Exide, the
Tranche B Borrowers listed in Schedule 3 and any Additional Borrower
from time to time (but not in any event including EHE);
"TRANCHE B FACILITY" means collectively (a) the Tranche B
Multicurrency Revolving Facility and (b) the Tranche B Multicurrency
Term Facility;
"TRANCHE B MULTICURRENCY REVOLVING COMMITMENT" means, in relation to
the participation of any Lender in the Tranche B Revolving Facility,
the amount or Equivalent Amount of such amount stated opposite its
name in Schedule 1 (or in the case of a Transferee, the amount or
Equivalent Amount of such Amount stated in the Schedule to the
relevant Transfer Certificate as being transferred to that Transferee)
in relation to that Facility, in each case as the same may be
transferred (in whole or in part), cancelled, reduced, varied or
terminated in accordance with the terms of this Agreement;
"TRANCHE B MULTICURRENCY REVOLVING FACILITY" means the Tranche B
multicurrency revolving credit facility not in excess of the Tranche B
Multicurrency Revolving Commitments granted to the Tranche B Borrowers
hereunder (as the same may be reduced in accordance with the terms of
this Agreement);
"TRANCHE B MULTICURRENCY TERM COMMITMENT" means, in relation to the
participation of any Lender in the Tranche B Term Facility, the amount
or Equivalent Amount of such amount stated opposite its name in
Schedule 1 (or in the case of a Transferee, the amount or Equivalent
Amount of such amount stated in the Schedule to the relevant Transfer
Certificate as being transferred to that Transferee) in relation to
that Facility, in each case the same may be transferred (in whole or
in part), cancelled, reduced, varied or terminated in accordance with
the terms of this Agreement;
"TRANCHE B MULTICURRENCY TERM FACILITY" means the Tranche B
multicurrency term credit facility not in excess of the Tranche B
Multicurrency
39
<PAGE>
Term Commitments granted to the Tranche B Borrowers hereunder (as the
same may be reduced in accordance with the terms of this Agreement);
"TRANSFER" has the meaning given to it in Clause 25.2;
"TRANSFER CERTIFICATE" means a certificate substantially in the form
set out in Schedule 9;
"TRANSFEREE" means a bank, financial institution or other person to
which a Lender seeks to transfer or has transferred all or part of its
rights and obligations hereunder;
"TUDOR" has the meaning given to it in the introduction to this
Agreement;
"TUDOR AB" means Tudor A.B., a company organised under the laws of the
Kingdom of Sweden;
"TUDOR AB GROUP" means, so long as Tudor AB is not a member of another
Borrowing Sub-Group, Tudor AB and its subsidiaries from time to time;
"TUDOR APPROVED ACCOUNTING PRINCIPLES" means such accounting
principles, standards and practices as are generally accepted in the
accounting profession in Spain from time to time, consistently
applied;
"TUDOR CONVERTIBLE BONDS" means convertible bonds maturing 28th
December, 1997, of ESP 10,000 face value each issued by Tudor;
"TUDOR GROUP" means Tudor and its subsidiaries from time to time;
"TUDOR HOLDINGS" means Tudor Holding Ltd. Oy, a company organised
under the laws of the Republic of Finland;
"TUDOR RESTRICTED SUBSIDIARY" means Tudor or a subsidiary of Tudor
that is a Restricted Subsidiary;
"UNITED KINGDOM" or "UK" means the United Kingdom of Great Britain and
Northern Ireland;
"USD" means the lawful currency from time to time of the United States
of America;
"VAT" means value added tax imposed in any relevant jurisdiction or
any other tax of a substantially similar nature substituted therefor
from time to time;
"WCP ADVANCE" means an Advance under a WCP Facility;
"WCP AGREEMENT" means an agreement between a WCP Provider and a WCP
Borrower relating to a WCP Facility;
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<PAGE>
"WCP BORROWER" means any Borrower in the event it has been provided
with a WCP Facility by a WCP Provider, and "WCP BORROWERS" means each
of them;
"WCP COMMITMENT" means, in respect of any WCP Provider for a WCP
Facility, the amount designated by the WCP Provider pursuant to Clause
3.6.1, as such WCP Commitment may be reduced pursuant to the terms of
this Agreement;
"WCP FACILITY" means a revolving credit facility made available by a
WCP Provider to a WCP Borrower pursuant to Clause 3.6 and "WCP
FACILITIES" means all such facilities;
"WCP PROVIDER" means any Lender acting through a branch or affiliate
in respect of a WCP Commitment of that Lender;
"WORKING CAPITAL" means in relation to a person or group of persons
under any Approved Accounting Principles, trade and other debtors in
respect of operating items plus prepayments and inventory less trade
and other creditors in respect of operating items and less accrued
expenses and accrued costs, in each case determined in accordance with
such Approved Accounting Principles for such person or, on a
consolidated basis, for such persons (as the case may be); and
1.2 Construction of Other Terms
---------------------------
In this Agreement, unless the context otherwise requires, a reference
to:-
1.2.1 "affiliate" means in relation to any person (a) any person (other than
---------
a subsidiary) which, directly or indirectly, is in control of,
is controlled by, or is under common control with such person, or (b)
any person who is a director or officer (i) of such person, (ii) of
any subsidiary of such person or (iii) of any person described in sub-
clause (a) above. For purposes of this definition, "control" of a
person shall mean the power, direct or indirect, (i) to vote 25% or
more of the securities having ordinary voting power for the election
of directors of such person, whether by way of ownership of
securities, contract, proxy or otherwise, or (ii) to direct or cause
the direction of the management and policies of such person, whether
by ownership of securities, contract, proxy or otherwise;
1.2.2 "assets" includes property and rights of every kind, present, future
------
and contingent (including uncalled share capital), and every
kind of interest in an asset, except that the word
"contingent" shall not be deemed included in this definition
where the definition is used in provisions relating to
financial accounting;
1.2.3 "indebtedness" includes any obligation (whether incurred as principal
------------
or as surety) for the payment or repayment of money, whether present
or future, actual or contingent, except that the word "contingent"
shall not be deemed included in this definition where the definition
is used in provisions relating to financial accounting;
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<PAGE>
1.2.4 a document or other writing being "in the agreed terms" means that the
-------------------
relevant document or writing is in form and substance satisfactory to
the Agent and has been initialled by or on behalf of the Agent and the
Borrowers' Agent on or before the date hereof;
1.2.5 an event or matter having a "Material Adverse Effect" is to be
-----------------------
construed as a reference to an event or matter which has or is
reasonably likely to have a material adverse effect on:-
(i) the financial condition, business, assets or revenues of the
Borrowing Group taken as a whole; or
(ii) the ability of the Borrowers and the Guarantors (taken as a
whole) to perform in a timely and diligent manner all or any of
their material obligations (including, without limitation,
payment obligations) under each of the Finance Documents, other
than as set forth in the Reservations;
1.2.6 a "month" means (save where used in the expression "calendar month") a
----- --------------
period starting on one day in a calendar month and ending on the
numerically corresponding day in the next calendar month (or in a
subsequent calendar month in the case of the plural "months"),
provided that if:-
(a) any such period would otherwise end on a day which is not a
Business Day, it shall end on the next Business Day in the same
calendar month, or if none, on the preceding Business Day; and
(b) a period starts on the last Business Day in a calendar month or
if there is no numerically corresponding day in the month in
which that period ends, that period shall end on the last
Business Day in that later month;
and provided further, that where the term "month" is used herein with
reference to a period for, or as at the end of, which any member of
the Borrowing Group maintains or reports its financial information in
accordance with financial accounting and reporting practices utilised
by the Borrowing Group as a whole, such term shall be construed to
mean a period of either four or five weeks determined in accordance
with such practices;
1.2.7 "outstandings" under a Facility means the principal amount of all
------------
Advances outstanding under such Facility including, without
limitation, the amount of Revolving L/C Outstandings, Revolving Credit
Guarantee Outstandings, SINAC Term Guarantee Outstandings and Banesto
Term Letter of Credit Outstandings;
1.2.8a "person" includes any person, firm, company, corporation, government,
state or agency of a state or any undertaking (within the meaning of
Section 259(1) of the Companies Act 1985) or other entity or
association (whether or not having separate legal personality), or any
two or more of the foregoing;
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<PAGE>
1.2.9 "repayment" includes "prepayment" and its grammatical variations and
--------- ----------
cognate expressions shall be construed accordingly;
1.2.10 "subsidiary" means, with respect to any person, any corporation or
-----------
other person fifty percent (50%) or more of whose securities or other
ownership interests having ordinary voting power for the election of
directors or similar representatives (other than securities having
such power only by reason of the happening of a contingency) are, as
of the date of determination thereof, directly or indirectly owned by
such person or one or more of such person's subsidiaries; and
1.2.11 "winding-up" of any person includes its dissolution and/or termination
----------
and/or any equivalent or analogous proceedings under the law of any
jurisdiction in which the person concerned is incorporated,
registered, established or carries on business or to which that person
is subject.
1.3 Other Provisions
----------------
Except where a contrary intention appears, in this Agreement:-
1.3.1 a reference to an Obligor or a Finance Party is, where relevant,
deemed to be a reference to or to include, as appropriate, their
respective successors or assigns;
1.3.2 references to Clauses and Schedules are references to, respectively,
clauses of and schedules to this Agreement;
1.3.3 a reference to any agreement, deed or other instrument (including the
Finance Documents) is to be construed as a reference to that
agreement, deed or other instrument as it may have been or hereafter
be, from time to time, amended, varied, supplemented, restated or
novated but excluding for this purpose any amendment, variation,
supplement or modification which is contrary to any provision of any
of the Finance Documents;
1.3.4 a reference to a statute, law, rule, regulation or statutory
instrument is to be construed as a reference to that statute as the
same may have been, or may from time to time hereafter be, amended or
re-enacted;
1.3.5 a time of day is a reference to London time;
1.3.6 the index to and the headings in this Agreement are inserted for
convenience only and are to be ignored in construing this Agreement;
1.3.7 references to the singular shall include the plural and vice versa,
---- -----
and reference by way of masculine pronoun or adjective shall include
references by way of the feminine, and vice versa; and
---- -----
1.3.8 accounting terms are to be construed in accordance with the relevant
Approved Accounting Principles.
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2. THE FACILITIES.
--------------
2.1 The Facilities
--------------
2.1.1 The Lenders grant to EHE, upon the terms and subject to the conditions
of this Agreement, the Tranche A Term Facility.
2.1.2 The Lenders grant to the Tranche B Borrowers, upon the terms and
subject to the conditions of this Agreement, the Tranche B
Multicurrency Term Facility.
2.1.3 The Lenders grant to the Tranche B Borrowers, upon the terms and
subject to the conditions of this Agreement, the Tranche B
Multicurrency Revolving Facility.
2.2 Purpose
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2.2.1 Tranche A Term Facility: The proceeds of any Advance under the Tranche
-----------------------
A Term Facility shall be used by EHE to refinance in part the EHE Pre-
Closing Parent Indebtedness.
2.2.2 Tranche B Term Facility: The proceeds of any Advance under the Tranche
-----------------------
B Multicurrency Term Facility shall be used by the relevant Tranche B
Borrower:-
(a) to refinance its Indebtedness to be Refinanced (Tranche B) and,
to the extent permitted herein, Indebtedness to be Refinanced
(Tranche B) of other members of the Borrowing Group in an amount
not to exceed the amount so refinanced (plus premiums, accrued
interest, fees and expenses on such Indebtedness to be Refinanced
(Tranche B) and any refinancings thereof),
(b) for the issue of the SINAC Term Guarantee to backstop term loan
facilities to SINAC the proceeds of which are used to refinance
SINAC's Indebtedness to be Refinanced (Tranche B) and, to the
extent permitted herein, Indebtedness to be Refinanced (Tranche
B) of other members of the Borrowing Group in an amount not to
exceed the amount so refinanced (plus premiums, accrued interest,
fees and expenses on such Indebtedness to be Refinanced (Tranche
B) and any refinancings thereof),
(c) for the issue of the Banesto Term Letter of Credit to support the
payment of principal of, and interest on, the Tudor Convertible
Bonds held by Banesto on the date of this Agreement and/or
(d) in an amount which does not exceed the amount of the
extraordinary distribution by CEAC described in Clause 4.1.1(g)
for the general corporate purposes of the CEAC Group.
2.2.3 Tranche B Multicurrency Revolving Facility. The proceeds of any
Advance (including WCP Advances, except as otherwise restricted by
Clause 3.6) under
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the Tranche B Multicurrency Revolving Facility shall be used by the
relevant Tranche B Borrower:-
(a) to refinance its Indebtedness to be Refinanced (Tranche B) and,
to the extent permitted herein, Indebtedness to be Refinanced
(Tranche B) of other members of the Borrowing Group in an amount
not to exceed the amount so refinanced (plus premiums, accrued
interest, fees and expenses on such Indebtedness to be Refinanced
(Tranche B) and any refinancings thereof), and/or
(b) for the issue of Revolving Credit Guarantees and the issue of
Revolving L/Cs to backstop overdraft and working capital
facilities the proceeds of which are used for general corporate
purposes of the Borrowing Group and/or to refinance its
Indebtedness to be Refinanced (Tranche B) and, to the extent
permitted herein, Indebtedness to be Refinanced (Tranche B) of
other members of the Borrowing Group in an amount not to exceed
the amount so refinanced (plus premiums, accrued interest, fees
and expenses on such Indebtedness to be Refinanced (Tranche B)
and any refinancings thereof); and/or
(c) in an amount which, together with the Indebtedness to be
Refinanced (Tranche B) and the proceeds of the overdraft and
working capital facilities the proceeds of which are used for
general corporate purposes of the Borrowing Group pursuant to
sub-clause (b) of this Clause 2.2.3, does not exceed FF
1,403,000,000 or the Equivalent Amount for general corporate
purposes of the Borrowing Group.
2.2.4 Additional Borrowers: The Borrowers' Agent may, with the prior written
--------------------
consent of the Agent, which consent shall not be unreasonably withheld
if (i) the Agent reasonably determines that designation of the
subsidiary referred to below as an Additional Borrower would not
prejudice any of the Finance Parties' rights under the Finance
Documents or against the Borrowers and Guarantors or any of them and
(ii) none of the Lenders has objected to the designation of such
Additional Borrower on the basis that (y) the designation of such
Additional Borrower would result in payments due from such Additional
Borrower to such Lender being subject to Clause 9.3.2., or (z) making
Loans to, or maintaining such Lender's Commitment in favour of, such
Additional Borrower would cause such Lender to violate any law,
regulation, directive or order applicable to it or any of its
affiliates, whether or not having the force of law, or any internal
policy of such Lender, at any time during the term of this Agreement,
designate by notice to the Agent any of the Lead Borrowers' respective
subsidiaries as an Additional Borrower (specifying the Facility(ies)
in respect of which it is to be an Additional Borrower, provided that
--------
no Additional Borrowers shall be permitted with respect to the Tranche
A Facility). Such notice shall be in writing and signed on behalf of
the Borrowers' Agent and on behalf of the subsidiary concerned and
shall take effect in accordance with its terms provided that:
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(a) the Additional Borrower enters into a Deed of Accession with the
Agent on behalf of the Finance Parties in the relevant form
contained in Schedule 8 together with such amendments as the
Agent may reasonably require or permit; and
(b) the Additional Borrower, before entering into such a Deed of
Accession, has provided legal opinions in form and substance
reasonably satisfactory to the Agent and has fulfilled to the
satisfaction of the Agent all reasonable conditions precedent
notified to the Borrowers' Agent in the written consent of the
Agent including, but not limited to, in the case of Additional
Borrowers incorporated in Spain, the recordation of such Deed of
Accession before a Spanish Notary or Official Commercial
Stockbroker.
Notwithstanding any other provision contained herein, so long as
B.I.G. France SARL, a French societe a responsabilite limitee, is
insolvent, it shall not be permitted or required to be a Borrower.
2.2.5 Financial Assistance: No amount drawn down hereunder shall be applied
--------------------
in a manner which may be prohibited by any financial assistance or
other similar laws in any relevant jurisdiction and, to the extent any
Borrower lends any amount drawn hereunder to another person as
permitted hereunder, such Borrower shall ensure that the proceeds of
such loan are not applied in a manner which may be so prohibited.
2.2.6 Borrowers' Agent: Each Borrower and Guarantor by its execution of this
----------------
Agreement (including by execution of a Deed of Accession) irrevocably
authorises the Borrowers' Agent to give and receive all notices and
instructions and make such agreements expressed to be capable of being
given or made (i) to or by it pursuant to the Finance Documents, or
(ii) by the Borrowers' Agent in this Agreement notwithstanding that
they may affect such Borrower or Guarantor without further reference
to or the consent of such Borrower or Guarantor and such Borrower or
Guarantor shall, as regards each Finance Party, be bound thereby as
though such Borrower or Guarantor itself had agreed such change or
given such notice or made such agreement. Without prejudice to the
foregoing, the Borrowers' Agent shall at all times keep the Borrowers
and Guarantors fully informed and consult with them and obtain their
instructions whenever necessary or desirable.
2.2.7 Actions of Borrowers' Agent: The respective liabilities of each of the
---------------------------
Borrowers and of each of the Guarantors hereunder shall not be in any
way affected by:-
(a) any irregularity in any act done by or any failure to act by the
Borrowers' Agent;
(b) the Borrowers' Agent acting in any respect outside any authority
conferred on it by any Borrower or Guarantor; or
(c) the failure by or inability of the Borrowers' Agent to inform any
Borrower or Guarantor of receipt by it of any notification
hereunder.
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3. PARTICIPATION OF LENDERS.
------------------------
3.1 Basis of Participation
----------------------
Subject to the provisions of this Agreement, each Lender will
participate in each Cash Advance and will be deemed to participate in
a Deemed Advance (other than WCP Advances) in the proportion which (i)
in the case of an Advance under the Tranche A Term Facility or Tranche
B Multicurrency Term Facility, its Commitment in relation to such
Facility as at the Drawdown Date bears to the undrawn portion of the
Total Commitments of the Lenders in relation to such Facility as at
such date, and (ii) in the case of an Advance under the Tranche B
Multicurrency Revolving Facility, its Net Tranche B Multicurrency
Revolving Commitment in relation to such Facility as at the Drawdown
Date bears to the undrawn portion of the Tranche B Multicurrency
Revolving Commitments of the Lenders in relation to such Facility as
at such date.
None of the Lenders is obliged to participate in a Cash Advance or a
Deemed Advance to the extent that to do so would result in the amount
outstanding to it under the relevant Facility exceeding its Commitment
in respect of that Facility.
3.2 Lending Office
--------------
3.2.1 Each Lender will participate in each Advance as aforesaid through its
Lending Office.
3.2.2 If any Lender changes any Lending Office, that Lender agrees to notify
the Agent and the Borrowers' Agent promptly of such change and, until
it does so, the Agent and the Borrowers shall be entitled to assume
that no such change has taken place.
3.3 Rights and Obligations of Finance Parties
-----------------------------------------
3.3.1 The rights and obligations of each of the Finance Parties under the
Finance Documents are several. Failure of any Finance Party to observe
and perform its obligations under any Finance Document shall neither:-
(a) result in any other Finance Party incurring any liability
whatsoever; nor
(b) relieve the Borrowers or any other Finance Party from their
respective obligations under the Finance Documents.
3.3.2 Notwithstanding any other provision of any Finance Document, the
interests of each Finance Party are several and the total amounts
outstanding at any time under the Finance Documents and due to each
Finance Party constitute separate and independent debts.
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3.4 Enforcement of Rights
---------------------
3.4.1 Each Finance Party has the right to protect and enforce its rights
arising out of the Finance Documents and it will not be necessary for
any other Finance Party to be joined as an additional party in any
proceedings brought for the purpose of protecting or enforcing such
rights.
3.4.2 The parties agree that, notwithstanding any term of any Security
Document to the contrary, to the extent the security under some or all
of the Security Documents for obligations under the Tranche B Facility
(either directly as a Borrower or as a Guarantor or, in the case of
Exide International, as a pledgor) is limited by reference to the
Security Reference Amount, the Finance Parties may not realise, in
aggregate, more than such Security Reference Amount with respect to
such Tranche B Facility obligations by enforcement of the Security
Interest under such Security Documents; provided that the Finance
--------
Parties acting through the Security Agent may enforce such Security
Documents in any order and with respect to any collateral subject
thereto as the Finance Parties deem fit; provided further that nothing
-------- -------
in the foregoing shall be deemed to limit the Finance Parties' rights
(i) under the Security Documents to enforce such Security Documents
with respect to other obligations secured thereby or (ii) to enforce
any other Finance Document with respect to any obligation of any
Obligor thereunder whatsoever (including without limitation for
obligations secured in whole or in part by such Security Documents) to
the full extent thereof.
3.4.3 The parties agree that, notwithstanding any term of any Security
Document to the contrary, to the extent the security under some or all
of the Security Documents for obligations under the Facilities (either
directly as a Borrower or as a Guarantor) is limited by reference to
the CNTA Adjusted Share, the Finance Parties may not realise, in
aggregate, more than such CNTA Adjusted Share with respect to such
obligations by enforcement of such Security Documents; provided that
--------
the Finance Parties acting through the Security Agent may enforce such
Security Documents in any order and with respect to any collateral
subject thereto as the Finance Parties deem fit; provided further that
-------- -------
nothing in the foregoing shall be deemed to limit the Finance Parties'
rights (i) under the Security Documents to enforce such Security
Documents with respect to other obligations secured thereby or (ii) to
enforce any other Finance Document with respect to any obligation of
any Obligor thereunder whatsoever (including without limitation for
obligations secured in whole or in part by such Security Documents) to
the full extent thereof.
3.5 Syndication
-----------
The Borrowers acknowledge that, without limitation of the provisions
of Clause 25, the Original Tranche A Term Lenders, the Original
Tranche B Multicurrency Term Lenders and the Original Tranche B
Multicurrency Revolving Lenders may assign or transfer their
respective rights under this Agreement ("Syndication") and the
-----------
Borrowers undertake to assist and co-operate with the Agent and such
Lenders in Syndication in such manner and to such extent as the
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Agent and such lenders may from time to time each resonable request
including, whitout limitation, by:-
3.5.1 providing and causing the Borrowers' advisers to provide the Agent,
Lenders and potential Lenders with all reasonable information deemed
necessary by the Agent to complete Syndication, including but not
limited to information and evaluations prepared by the Borrowers and
their respective advisers;
3.5.2 assisting in the preparation of an Information Memorandum;
3.5.3 making available officers of the Borrowers and the Parent from time to
time and, as may reasonably be requested, causing such officers to
attend and make presentations regarding the business and prospects of
the Borrowers and the Parent, as appropriate, at a meeting or meetings
of Lenders or prospective Lenders;
3.5.4 arranging and conducting appropriate Borrowing Group site visits for
Lenders and potential Lenders;
3.5.5 selecting Interest Periods having a duration of not more than one
month in respect of all Cash Advances made for the first six months
following the date of this Agreement; and
3.5.6 refraining and causing its subsidiaries to refrain, from placing any
of their respective borrowings in the English, French, Spanish or
international financial or capital markets until the earlier of (i)
six months after the date of this Agreement, and (ii) completion of
such Syndication as notified to the Borrowers' Agent by the Agent.
3.6 The WCP Facilities
------------------
3.6.1 (a) If a WCP Provider so agrees, at the request of the Borrowers'
Agent made on behalf of a Borrower, a WCP Provider may designate
by notice to the Agent all or part of its Revolving Credit
Commitment as being utilised by its provision of a WCP Commitment
in the amount designated in respect of a WCP Facility for such
Borrower up to a maximum amount of FF 40,000,000 or its
Equivalent Amount; provided that the maximum aggregate amount of
the WCP Commitments of all WCP Providers hereunder shall not
exceed FF 155,000,000 or its Equivalent Amount.
(b) Under no circumstance shall the aggregate of any WCP Provider's
WCP Commitments exceed such WCP Provider's Revolving Credit
Commitment.
(c) Subject to the terms of this Agreement,
(i) while and to the extent a WCP Facility is made available for
drawing by the relevant WCP Borrower, the Tranche B
Multicurrency Revolving Commitment of the WCP
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Provider for that WCP Facility shall be reduced by the
amount of its WCP Commitment in respect of that WCP
Facility, as set forth in the definition of Net Tranche B
Multicurrency Revolving Commitment; and
(ii) the Borrower under a WCP Facility may cancel any undrawn
element of that WCP Facility at any time, and in any such
event or upon the expiration of the WCP Commitment for that
WCP Facility, the Net Tranche B Multicurrency Revolving
Commitment of the WCP Provider for that WCP Facility shall
automatically be increased by the amount so cancelled or
expired; provided that such WCP Provider's Net Tranche B
--------
Multicurrency Revolving Commitment shall not be increased in
excess of its Tranche B Multicurrency Revolving Commitment.
3.6.2 Each WCP Facility shall be made available to the relevant WCP Borrower
upon the terms of this Agreement, as follows:-
(a) WCP Advances may be in the form of Cash Advances, letters of
credit or revolving credit guarantees as agreed between the
relevant WCP Provider in the applicable WCP Agreement.
(b) WCP Advances under a WCP Facility shall, except as otherwise
provided, be made available to the relevant WCP Borrower on the
same terms and conditions (including without limitation the terms
and conditions relating to interest, payments, change in
circumstances, defaults, etc.) under which Revolving Credit
Advances are made available to the Borrowers under this
Agreement, provided that for purposes of Clauses 2, 3 and 5 to 11
(inclusive):-
(i) the Lending Office or Offices of a WCP Provider for
purposes of its WCP Facility may be different from the
Lending Offices it designates for other purposes under
this Agreement;
(ii) except as set forth in Clause 3.6.1, all notices to be
given by or to the Borrowers' Agent in respect of a
Tranche B Multicurrency Revolving Advance shall, in
respect of a WCP Advance, be given by or to (as
applicable) the WCP Borrower under the relevant WCP
Facility (and references to the Borrowers' Agent and its
address in the relevant provisions of such clauses shall
be deemed references to the relevant WCP Borrower and its
address for this purpose);
(iii) except as set forth in Clause 3.6.1, all notices to be
given by or to the Agent in respect of a Tranche B
Multicurrency Revolving Advance shall, in respect of a WCP
Advance, be given by or to (as applicable) the WCP
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Provider for the relevant WCP Facility (and references to
the Agent and its address in the relevant provisions of such
clauses shall be deemed references to the relevant WCP
Provider and its address for this purpose);
(iv) all determinations to be made by the Agent in respect of a
Tranche B Multicurrency Revolving Advance shall, in respect
of a WCP Advance, be made by the relevant WCP Provider (and
references to the Agent in the relevant provisions of such
clauses shall be deemed references to the relevant WCP
Provider for this purpose);
(v) all payments which, in respect of a Tranche B Multicurrency
Revolving Advance, are required to be made to the Agent
hereunder shall, in respect of a WCP Advance to a WCP
Borrower, be made to the WCP Provider in respect of those
WCP Advances (and references to the Agent and its address in
the relevant provisions of such clauses shall be deemed
references to the relevant WCP Provider and its address for
this purpose); and
(vi) each WCP Advance shall be in such minimum amount and
integral multiples as is agreed between the relevant WCP
Provider and WCP Borrower in the applicable WCP Agreement.
(c) The foregoing notwithstanding, the WCP Provider and WCP Borrower
in relation to a WCP Facility may agree in a WCP Agreement
between them to vary the interest rate applicable to WCP Advances
under the WCP Facility, the number of WCP Advances that may be
outstanding at any one time, or the form of or requirement for
any Drawdown Request or the notice required to make a drawing of
a WCP Advance under that WCP Facility, and payment and amount of
fees; provided that such WCP Agreement may not amend,
--------
supplement or vary this Agreement in any other respect without
the consent of the Agent acting at the direction of the Majority
Lenders, or, to the extent required by the other provisions of
this Agreement, the Lenders.
(d) In addition to the foregoing, Clauses 5.5, 5.8 and 8.3.4 shall
not apply in respect of any WCP Advance and matters relating
thereto.
3.7 Certain Adjustments Relating to WCP Facilities
----------------------------------------------
3.7.1 Following the occurrence and during the continuance of an Event of
Default:-
(a) each WCP Provider shall promptly notify the Agent of any Recovery
made by it from the relevant Borrower and/or any loss or expense
suffered by it in connection with the failure to repay in full,
in each
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case by reference to the WCP Facility or WCP Facilities to which
it is a party; and
(b) in the event of a shortfall as regards any or all of the Obligors
under the Finance Documents, the Agent shall calculate the
necessary adjustments between that WCP Provider and the other
Lenders so that, as closely as is practicable, each Lender shares
any loss suffered by all the Lenders (including the WCP Provider)
in the proportion which that Lender's Commitments under the
Facilities bears to all the Total Commitments under the
Facilities.
The Lenders (including each WCP Provider) agree to accept as
conclusive (in the absence of manifest error) the calculations of the
Agent under paragraph (b) above and to make such consequential
payments as between themselves as may be necessary to achieve the
proportionate loss sharing contemplated by that paragraph (b) and to
give effect to Clause 19.
3.7.2 Any consequential payment made by a Lender under Clause 3.7.1 above is
without prejudice to the obligations under this Agreement of the
Borrowers to pay all amounts due and payable under this Agreement.
4. CONDITIONS PRECEDENT.
--------------------
4.1 Initial conditions precedent
----------------------------
4.1.1 The obligations of the Lenders to make any Advance available to the
Borrowers under this Agreement are conditioned upon (I) the Agent and
its legal advisers having received the following documents and
evidence (except the items specified in sub-clause (d), (e), (f) (g),
(n), (s), (u) and (v) below) in all respects (except where otherwise
specified) in form and substance satisfactory to the Agent and its
legal advisers by 12 noon on the third Business Day prior to the
Initial Drawdown Date, and (II) the items specified in sub-clause (d),
(e), (f), (g), (n), (s), (u) and (v) below in all respects (except
where otherwise specified) in form and substance satisfactory to the
Agent and its legal advisers having been placed in escrow with
O'Melveny & Myers pending the Initial Drawdown by 12 noon on the third
Business Day prior to the Initial Drawdown Date:-
(a) a copy, certified as of the Initial Drawdown Date as true and
complete by a duly authorised representative of the relevant
Obligor, of:
(i) the constitutional documents of each Obligor, including
evidence of due incorporation, together with satisfactory
search results of any public corporate registers of that
Obligor;
(ii) board (or other appropriate governing body) resolutions of
each Obligor (A) approving the transactions and the matters
contemplated by each of the Finance Documents, and (B)
authorising a specified person or persons to (x)
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execute on its behalf each of the Finance Documents to
which it is a party, and (y) give all notices, requests,
instructions, certificates and other documents for that
Obligor in connection with each of the Finance Documents to
which it is a party;
(iii) all other corporate, trust or other applicable
authorisations and actions of it required (including
without limitation any resolutions of shareholders or
approvals of beneficiaries) to enable it to enter into,
execute and perform those of the Finance Documents to which
it is, or is to be, a party;
(iv) specimen signatures of the signatories authorised by each
Obligor in the board (or other appropriate governing body)
resolutions described in Clause 4.1.1(a)(ii) to sign
Financing Documents to which it is or is to be a party; and
(v) all other resolutions, powers, declarations, approvals,
consents and licenses (corporate, official or otherwise)
necessary or appropriate for the entry into and performance
by each Obligor of the Finance Documents to which it is or
is to be a party, and for the enforceability and validity
thereof;
(b) one or more certificates of duly authorised officers of Tudor
certifying evidence that the Bank of Spain and/or the Ministry of
Finance of the Kingdom of Spain have approved or cleared the
transactions contemplated by the Finance Documents (to the extent
necessary) and the clearance from the Direccion General de
Economia Internacional y Transacciones Exteriores to transfer the
shares of capital stock of Tudor from the Parent to EHE;
(c) duly and unconditionally executed counterparts of:-
(i) this Agreement;
(ii) the Deeds of Accession for each party that will become a
Guarantor or a Borrower as of the Initial Drawdown Date;
(iii) each of the Security Documents; and
(iv) such Escrituras Publicas or polizas intervenidas relative
to this Agreement, the Deeds of Accession and the Security
Documents to which any Obligor which is organised or
incorporated under the laws of the Kingdom of Spain is a
party or any of the assets, shares or interests of which
are located in the Kingdom of Spain as the Agent may
reasonably require so that such documents
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shall in each case constitute escrituras publicas or
polizas intervenidas under Spanish law;
(d) legal opinions properly addressed to the Agent and Lenders from:-
(i) Kirkland & Ellis, U.S. legal advisers to the Parent;
(ii) Lovell White Durrant, English legal advisers to Euro Exide,
Gide Loyrette Nouel, French legal advisers to CEAC and EHE,
and J&A Garrigues, Spanish legal advisers to Tudor;
(iii) reputable counsel acceptable to the Agent in each
jurisdiction other than England, France or Spain in which
any Borrower or Guarantor is organised or incorporated, who
may be counsel to the Parent; and
(iv) Ashurst Morris Crisp, English and French legal advisers to
the Agent and Uria & Menendez, Spanish legal advisers to
the Agent;
(e) delivery of share certificates, certificados de legitimacion and
share transfer forms and/or evidence of the relevant recording on
the share registers with respect to the shares of CEAC, Euro
Exide and Tudor pledged pursuant to the Security Documents and/or
any other appropriate evidence that the Security Interests
created thereby are appropriately perfected or will be perfected
upon registration under applicable law;
(f) evidence that the Parent Credit Agreement has been amended
pursuant to an amendment in form and substance satisfactory to
the Agent and Majority Lenders, that such amendment remains in
full force and effect, and that the Parent has repaid or will
concurrently repay certain Financial Indebtedness thereunder in
the aggregate amount of FF 373,000,000 as required by the terms
of such amendment;
(g) evidence that before or concurrent with the Initial Drawdown CEAC
shall have made or will make an extraordinary distribution, and
that the proceeds of such distribution and the proceeds of the
Tranche A Term Loan hereunder will be used to repay in part the
EHE Pre-Closing Parent Indebtedness;
(h) Environmental Report and Environmental Budget;
(i) Due Diligence Report;
(j) Accountants Report, together with letters from Arthur Andersen as
to (i) purchase accounting as applied as at March 31, 1995 and
thereafter to the consolidated financial statements of EHE, (ii)
French
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tax integration between EHE and CEAC and (iii) the ability of the
respective subsidiaries of the Lead Borrowers to pay dividends
(directly or indirectly) and make loans to and repay loans from
the Lead Borrower which is its direct or indirect parent (which
letter shall be in form and substance satisfactory to the Agent);
(k) the Knight Wendling Report;
(l) the Business Plan;
(m) the Operating Budget;
(n) reliance letters addressed to the Agent and each of the Lenders
in form and substance satisfactory to the Agent with respect to
each of (v) items (i) to (iii) referred to in the definition of
"Accountants Report" and the letters referred to in sub-clause
(j) of this Clause 4.1.1, (w) the Knight Wendling Report, (x) the
reports comprising the Due Diligence Report, (y) the
Environmental Budget and (z) the documents comprising the
Environmental Reports (1) for which reliance letters were
obtained in connection with the Facilities Agreement dated 28th
February 1995 among, inter alia, the Parent and Bankers Trust
Company as Lead Arranger, Agent and a Lead Manager (and any
updates of such documents), (2) prepared by the Parent and/or
members of the Borrowing Group and/or prepared by legal advisers
to the Parent and/or members of the Borrowing Group, or (3) to
the extent reasonably requested by the Agent;
(o) analyses and evidence of insurance complying with Clause 13.2.6
(Insurances) in scope, form and substance reasonably satisfactory
to Agent and Majority Lenders;
(p) (i) audited consolidated financial statements for CEAC and Tudor
for the period ended December 31, 1994 (ii) unaudited
consolidated financial statements for Euro Exide for the period
ended 31st March, 1995, and (iii) the pro forma consolidated
financial statements for the Borrowing Group for the Accounting
Reference Period ended March 31st, 1995;
(q) each of the financial statements and other materials required
pursuant to Clause 13.3.4 (Financial Statements and Operating
Budget);
(r) copies of each of the agreements, deeds or other instruments, in
each case containing covenants, events of default and matters
relating to requirements for repayment in advance of scheduled
maturity in form and substance reasonably satisfactory to the
Agent, evidencing the Continuing Indebtedness, certified as of
the Initial Drawdown Date on behalf of the Borrowers by a duly
authorised officer of the Borrowers' Agent;
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(s) evidence that the lenders party to the Parent Credit Agreement
have released the (i) Security Interests in all shares of capital
stock of Euro Exide, Tudor and certain subsidiaries of Tudor,
(ii) mortgages on certain property of Tudor and its subsidiaries
and (iii) guarantee from Tudor, in each case, granted in favour
of such lenders under the terms of the Parent Credit Agreement;
(t) evidence that all Financial Indebtedness of any member of the
Borrowing Group (other than in respect of EHE, EHE Post-Closing
Indebtedness and in respect of Tudor, the Tudor Convertible Bonds
held by the Parent on the date of this Agreement) to the Parent
or any subsidiary of the Parent that is not a member of the
Borrowing Group has been satisfied in full by the issuance of
shares of capital stock of that or another member of the
Borrowing Group;
(u) evidence that each of (i) the Facilities Agreement dated 28th
February, 1995 among the Parent, Bankers Trust Company, as
arranger, Bankers Trust Company, Bank of America National Trust
and Savings Association, Dresdner Bank Luxembourg S.A. and Bank
of Montreal, as lead managers, Bankers Trust Company, as agent,
and the lenders named therein, as amended to date, and (ii) the
Facility Agreement dated 28th July, 1995 among Tudor, Manos
Verwaltungsgesellschaft GmbH, Bankers Trust Company, as arranger,
Bankers Trust Company, Bank of America S.A., Midland Bank PLC,
Sucursal en Espana, Credit Lyonnais Espana S.A. and Banco Bilbao
Vizcaya S.A., as lead managers, Bankers Trust Company, as agent
and the lenders described therein, as amended, have been
terminated and all obligations of the borrowers thereunder fully
performed and satisfied, including, without limitation, the
repayment of all outstanding Financial Indebtedness thereunder;
(v) evidence of the delivery of (i) all letters of credit issued
under the Parent Credit Agreement for the account of Tudor or
certain of its subsidiaries in favour of Banco de Desarrollo
Economica S.A., Banco de Vitoria S.A. and Banesto as beneficiary
to or upon the order of the issuing banks for cancellation and
release and (ii) all guarantees issued by Bankers Trust Company,
Madrid branch for the account of Tudor or certain of its
subsidiaries in favour of Banco Espanol de Credito S.A. as
beneficiary to or upon the order of Bankers Trust Company, Madrid
branch for cancellation and release;
(w) a description of the terms of the proposed purchase by CEAC of
the equity shares of Sonnenschein outstanding on the date hereof
and not beneficially owned by members of the Borrowing Group;
(x) a letter of a duly authorised officer of the Parent and EHE
stating that each of the Security Documents secure the maximum
amount of Financial Indebtedness under the Finance Documents
permitted to be secured thereby under the terms of the Parent
Credit Agreement and the Indentures; and
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(y) a letter of a duly authorised officer of the Parent and EHE
stating that, other than the Master Agreement, no member of the
Borrowing Group is a party to any contractual arrangement of the
type described in sub-clause (iv) of the definition of "Net Cash
Proceeds".
In addition, since the date of this Agreement there shall have been no
material adverse change to the syndication market for credit
facilities of a similar nature and duration as this Agreement and
there shall not have occurred and be continuing a material disruption
of or material adverse change in the financial, banking or capital
markets that would have a material adverse effect on such syndication
market, in each case as determined by the Agent in its sole discretion
exercised in good faith; provided that the Agent and the Underwriters
--------
shall, following the occurrence of such a change or disruption,
negotiate with the Borrowers' Agent in good faith (without being
required to violate any internal policy of the Agent or any
Underwriter) with a view to making any amendments to any of the
Finance Documents which would, in the judgement of the Agent and the
Underwriters, eliminate the effect of such change or disruption.
4.1.2 When the Agent is satisfied that such conditions have been fulfilled,
the Agent will give notice to that effect to the Borrowers' Agent and
each of the Lenders. The Initial Drawdown Date must fall on a date on
or before the expiry of the Availability Period for the Tranche A Term
Facility and Tranche B Multicurrency Term Facility.
4.2 Additional Conditions Precedent for All Advances
------------------------------------------------
The obligations of the Lenders to make any Advance to the Borrowers
are subject to the following further conditions precedent that on both
the date of the relevant Drawdown Request and the relevant Drawdown
Date, unless waived by the Agent acting in accordance with Clause 26:-
(a) no Event of Default or Potential Event of Default has occurred
and continues unremedied or will occur as a result of the making
of the Advance; and
(b) the representations and warranties required to be made in
accordance with Clause 12 are true and accurate in all material
respects in each case by reference to the facts and circumstances
then subsisting and will remain true and accurate immediately
after the Advance is made.
4.3 Condition Precedent to Drawdown of Revolving Credit Guarantee or
----------------------------------------------------------------
Letter of Credit
----------------
Prior to the delivery of a Drawdown Request in respect of a Revolving
Credit Guarantee, Revolving L/C, Banesto Term Letter of Credit or
SINAC Term Guarantee the Borrowers' Agent shall obtain the written
approval of the Agent and the relevant Issuing Lender of the terms of
the relevant Revolving Credit Guarantee, Revolving L/C, Banesto Term
Letter of Credit or SINAC Term Guarantee.
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4.4 Accession by the Borrowers and the Guarantors
---------------------------------------------
4.4.1 The Lead Borrowers shall procure that prior to the Initial Drawdown
each Borrower and each Guarantor not already party to this Agreement
executes and delivers to the Agent a Deed of Accession in order that
each such person may accede as a Borrower and/or a Guarantor, as the
case may be, to this Agreement and be under all of the liabilities and
obligations expressed to be assumed by it under such Deed of Accession
and this Agreement on the Initial Drawdown Date .
4.4.2 Each of the Lenders authorises the Agent to execute on its behalf, and
each of the Borrowers and Guarantors party hereto authorises the
Borrowers' Agent to execute on its behalf, each Deed of Accession
which has been duly completed in accordance with this Clause 4.4 and
executed on behalf of any Borrower or Guarantor (as the case may be).
4.4.3 On the date on which the last of the Agent and Borrowers' Agent
executes the Deed of Accession, each of the Agent, Lead Arranger,
Security Agent, Underwriters, Co-Arrangers and Lenders shall acquire
the same rights against each Borrower and each Guarantor party to such
Deed of Accession as they would have acquired and assumed had each of
such Borrowers and Guarantors been an original party hereto, subject
in each case to such priorities as are imposed pursuant to mandatory
provisions of applicable law and to the Reservations.
5. DRAWDOWN PROCEDURES AND SELECTION AND AMOUNT OF CURRENCIES, ETC.
---------------------------------------------------------------
5.1 Drawdown of Cash Advances
-------------------------
5.1.1 Whenever a Borrower wishes to borrow a Cash Advance, the Borrowers'
Agent must deliver to the Agent a duly completed Drawdown Request not
later than 10.00 a.m. three Business Days prior to the proposed
Drawdown Date.
5.1.2 A Drawdown Request for a Cash Advance delivered to the Agent must be
in the form set out in Schedule 4 Part A and must specify each of the
following:-
(a) the Borrower, provided that, after giving effect to the Advance
--------
and any proposed repayment of Advances on the proposed Drawdown
Date:-
(i) the Gearing Ratio for the Borrowing Sub-Group of which
such Borrower is a member shall not be greater than
1.25:1.00;
(ii) the Borrower may in no case be EF or any Sub-Group Holding
Company which has not effectively and unconditionally
guaranteed obligations under the Finance Documents
pursuant to Clause 15 (without giving effect to Clause
15.10 thereof); and
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(iii) in the event Tudor AB is the Borrower, the aggregate
amount of outstandings in respect of Tudor AB under the
Tranche B Facility shall not exceed USD 6,000,000 or its
equivalent in other Available Currencies and in the
event Elbak Batteriewerke GmbH is the Borrower, the
aggregate amount of outstandings in respect of Elbak
Batteriewerke GmbH shall not exceed AS 100,000,000 or
its equivalent in Available Currencies;
(b) the proposed Drawdown Date for the Cash Advance (which must be a
Business Day falling within the Availability Period);
(c) the amount of the Cash Advance and the Facility under which it is
to be drawn, which amount must (i) be a minimum of the Equivalent
Amount of FF 25,000,000 and an integral multiple of the
Equivalent Amount of FF 1,000,000 except to the extent of
variations from such amounts for rounding purposes approved by
the Agent, (ii) in the case of a Cash Advance to be denominated
in BF, not exceed the Equivalent Amount in BF of FF
1,500,000,000, (iii) in the case of a Cash Advance to be
denominated in ESP, not exceed the Equivalent Amount in ESP of FF
1,000,000,000, and (iv) comply with Clause 5.1.3 ;
(d) the duration of the first Interest Period applicable to the Cash
Advance, which must comply with Clause 8.3;
(e) the account to which the proceeds of the Cash Advance are to be
paid; and
(f) the purpose for which the Cash Advance is requested.
5.1.3 In no event may the amount specified in a Drawdown Request be such
that the Loan would thereby exceed the then Total Commitments or any
relevant sub-limit specified in Clause 5.1.2(a) with respect to a
particular Borrower. If, however, the amount specified in a Drawdown
Request exceeds the then Total Commitments with respect to the
Borrowers or any relevant sub-limit specified in Clause 5.1.2(a) for a
particular Borrower, and the amount of that excess may reasonably be
attributed to exchange rate fluctuations on or after the date a
Drawdown Request is given, the Agent in its sole discretion may agree
with the Borrowers' Agent to adjustments, complying with the terms and
conditions of this Agreement including Clause 5.1.2(a), in the amount
of any Loan requested pursuant to such Drawdown Request so that the
amounts requested pursuant to such Drawdown Request comply with this
Clause 5.1.3 and 5.1.2(a). The Agent shall notify the Lenders promptly
after any such adjustment is made, and all expenses, losses, damages
and liability of the Lenders arising out of any such adjustments shall
be for the account of the Borrowers pursuant to Clause 27.1 (General
Indemnity and Breakage Costs).
5.1.4 A Drawdown Request once given may not be withdrawn or revoked.
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5.1.5 Advances under the Tranche A Term Facility and Tranche B Multicurrency
Term Facility may only be requested for the Initial Drawdown Date.
5.1.6 Not more than fifteen separate Tranche B Multicurrency Revolving
Advances (excluding Deemed Advances) may be outstanding at any time.
5.1.7 (a) The Borrowers' Agent may not request the drawdown of a Cash
Advance in a currency other than BF, DEM, ESP, FF, GBP, ITL or
USD (unless the Agent has confirmed in writing to the Borrowers'
Agent that such other currency is freely available to all the
Lenders and is one in which dealings regularly occur in the
London interbank market).
(b) Notwithstanding Clause 5.1.7(a), if before 9.15 a.m. (London
time) on the proposed Drawdown Date for a utilisation to be
denominated in a currency other than BF, DEM, ESP, FF, GBP, ITL
or USD:-
(i) the Agent receives notice from a Lender that it is
impracticable for the Lender to fund its participation for
the relevant Interest Period in such currency in the
ordinary course of its business in the London interbank
market; or
(ii) the drawing of the proposed Advance in such currency
could, in the opinion of the Agent, be reasonably likely
to contravene any applicable law or regulation;
then:-
(A) the Agent shall promptly and in any event before 10.00
a.m. on that Drawdown Date notify the Borrowers' Agent;
(B) if the Agent receives notice from the Borrowers' Agent by
11.00 a.m. on the relevant Drawdown Date the drawdown
shall not be made;
(C) if the Agent does not receive any notice under sub-
paragraph (B) above, the drawdown will be denominated
instead in FF and there shall be substituted in the
definition of "LIBOR" or "PIBOR" (as the case may be) in
Clause 1.1 the time "1.00 p.m." for the time "11.00 a.m.";
and
(D) the relevant Borrower shall forthwith on demand indemnify
each Lender against any liability which that Lender incurs
as a consequence of the operation of this Clause 5.1.7(b).
5.2 Drawdown of Revolving Credit Guarantees or SINAC Term Guarantee
---------------------------------------------------------------
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5.2.1 Whenever a Borrower wishes an Issuing Lender to issue a Revolving
Credit Guarantee or the SINAC Term Guarantee, the Borrowers' Agent
must deliver to the Agent a duly completed Drawdown Request in the
form of Schedule 3 Part B not later than 10.00 a.m. five Business Days
prior to the proposed Drawdown Date (or three Business Days in the
case of the SINAC Term Guarantee or any Revolving Credit Guarantee to
be issued on the Initial Drawdown Date) specifying:-
(i) the Borrower, subject to the limits set forth in Clause
5.1.2(a) and Clause 5.1.7 and provided that SINAC shall be the
Borrower for the SINAC Term Guarantee;
(ii) the proposed Drawdown Date, which shall be (a) a Business Day
during the Availability Period for issue of the relevant
Revolving Credit Guarantee, and (b) the Initial Drawdown Date
for issue of the SINAC Term Guarantee;
(iii) the currency of the relevant Revolving Credit Guarantee or
SINAC Term Guarantee (which currency shall be ITL for the SINAC
Term Guarantee);
(iv) the maximum aggregate liability of the Issuing Lender under
such Revolving Credit Guarantee or SINAC Term Guarantee,
provided that the maximum aggregate liability of the Issuing
Lender under such Revolving Credit Guarantee or SINAC Term
Guarantee must (i) be a minimum of the Equivalent Amount of FF
14,500,000 and an integral multiple of the Equivalent Amount of
FF 500,000 except to the extent of variations from such amounts
for rounding purposes approved by the Agent, (ii) in the case
of a Revolving Credit Guarantee to be denominated in BF, not
exceed the Equivalent Amount in BF of FF 1,500,000,000, (iii)
in the case of a Revolving Credit Guarantee to be denominated
in ESP, not exceed the Equivalent Amount in ESP of FF
1,000,000,000, and (iv) comply with Clause 5.1.3;
(v) the person to whom the relevant Revolving Credit Guarantee or
SINAC Term Guarantee is to be issued (which, in the case of a
Revolving Credit Guarantee, must be a person providing, or
which has agreed to provide, working capital facilities to the
requesting Borrower, and in the case of the SINAC Term
Guarantee (or any replacement thereof), must be a person
providing, or which has agreed to provide, term loan facilities
to SINAC) together, if required, with details of such person's
address for delivery of the relevant Revolving Credit Guarantee
or SINAC Term Guarantee;
(vi) the expiry date of the relevant Revolving Credit Guarantee or
SINAC Term Guarantee, which date shall not be later than the
Final Repayment Date; and
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(vii) the name of the proposed Issuing Lender, which may be any
Lender, but if no other Lender has agreed in advance of
delivery of the relevant Drawdown Request to issue the relevant
Revolving Credit Guarantee or SINAC Term Guarantee, the Issuing
Lender shall be the Agent.
5.2.2 Subject to Clause 4.4, the Borrowers' Agent shall deliver to the
Agent, with each Drawdown Request pursuant to Clause 5.2.1, the form
of the Revolving Credit Guarantee or SINAC Term Guarantee which is the
subject of the Drawdown Request.
5.2.3 Provided it has received the notice referred to in Clause 5.5 and
subject to Clause 5.1.7(b), the Issuing Lender shall deliver the
relevant Revolving Credit Guarantee or SINAC Term Guarantee, duly
executed, to the Borrowers' Agent (or, if so directed by the
Borrowers' Agent, to the beneficiary specified in the relevant
Drawdown Notice) on the Drawdown Date.
5.2.4 The SINAC Term Guarantee may only be requested for the Initial
Drawdown Date; provided that the Issuing Lender may, with the consent
--------
of the Agent and Borrowers' Agent and, to the extent required by the
terms of the SINAC Term Guarantee, the beneficiary thereof, agree to
issue one or more replacement SINAC Term Guarantees in substitution
for an existing SINAC Term Guarantee, in each case (i) for SINAC as
Borrower, and (ii) otherwise complying with the terms of this
Agreement, provided that the maximum aggregate SINAC Term Guarantee
Outstandings shall not be increased by the issuance of any such
replacement SINAC Term Guarantee.
5.3 Drawdown of Revolving L/Cs or Banesto Term Letter of Credit
-----------------------------------------------------------
5.3.1 When a Borrower wishes an Issuing Lender to issue a Revolving L/C or
Banesto Term Letter of Credit, the Borrowers' Agent must deliver to
the Agent a duly completed Drawdown Request in the form of Schedule 4
Part C not later than 10.00 a.m. five Business Days before the
proposed Drawdown Date (or three Business Days in the case of the
Banesto Term Letter of Credit or any Revolving L/C to be issued on the
Initial Drawdown Date), specifying:-
(i) the Borrower, subject to the limits set forth in Clause
5.1.2(a) and Clause 5.1.7 and provided that Tudor shall be the
Borrower for the Banesto Term Letter of Credit;
(ii) the proposed Drawdown Date for issue of the Revolving L/C or
Banesto Term Letter of Credit (which in any event shall be a
Business Day during the Availability Period and, in the case of
the Banesto Term Letter of Credit, shall be the Initial
Drawdown Date);
(iii) the currency of the Revolving L/C or Banesto Term Letter of
Credit (which currency shall be ESP in the case of the Banesto
Term Letter of Credit) and the maximum aggregate liability of
the Issuing Lender thereunder, provided that the maximum
--------
aggregate liability of the Issuing Lender under such Revolving
L/C must (i) be a minimum of
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the Equivalent Amount of FF 14,500,000 and an integral multiple
of FF 500,000 except to the extent of variations from such
amounts for rounding purposes approved by the Agent, (ii) in
the case of a Revolving L/C to be denominated in BF, not exceed
the Equivalent Amount in BF of FF 1,500,000,000, (iii) in the
case of a Revolving L/C to be denominated in ESP, not exceed
the Equivalent Amount in ESP of FF 1,000,000,000, and (iv)
comply with Clause 5.1.3;
(iv) the person to whom the Revolving L/C or Banesto Term Letter of
Credit is to be issued (which, in the case of a Revolving L/C,
must be a person providing, or which has agreed to provide,
working capital facilities to the requesting Borrower and, in
the case of the Banesto Term Letter of Credit, must be Banesto)
together, if required, with details of such person's address
for delivery of the Revolving L/C or Banesto Term Letter of
Credit ;
(v) the expiry date of the Revolving L/C or Banesto Term Letter of
Credit concerned, which date shall be not later than five
Business Days before the Final Repayment Date and not more than
365 days following the relevant Drawdown Date; and
(vi) the name of the proposed Issuing Lender, which may be any
Lender, but if no other Lender has agreed in advance of
delivery of the relevant Drawdown Request to issue the
Revolving L/C or Banesto Term Letter of Credit, the Issuing
Lender shall be the Agent ;
5.3.2 Subject to Clause 4.4, the Borrowers' Agent shall deliver to the Agent
with each Drawdown Request pursuant to Clause 5.3.1, the form of
Revolving L/C or Banesto Term Letter of Credit which is the subject of
the Drawdown Request.
5.3.3 Provided it has received the notice referred to in Clause 5.5 and
subject to Clause 5.1.7(b), the Issuing Lender shall issue the
Revolving L/C or Banesto Term Letter of Credit and deliver the same to
the Borrowers' Agent (or, if so directed by the Borrowers' Agent, to
the beneficiary specified in the relevant Drawdown Notice) on the
Drawdown Date.
5.3.4 The Banesto Term Letter of Credit may only be requested for the
Initial Drawdown Date; provided that the Issuing Lender may, with the
--------
consent of the Agent and Borrowers' Agent and, to the extent required
by the terms of the Banesto Term Letter of Credit, the beneficiary
thereof, agree to issue one or more replacement Banesto Term Letters
of Credit in substitution for an existing Banesto Term Letter of
Credit, in each case (i) for Tudor as the Borrower, and (ii) otherwise
complying with the terms of this Agreement, provided that the maximum
aggregate Banesto Term Letter of Credit Outstandings shall not be
increased by the issuance of any such replacement Banesto Term Letter
of Credit.
5.4 Lenders' Participations
-----------------------
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5.4.1 Subject to the provisions of this Agreement, each Lender will make
available to the Agent its Participation Proportion of the relevant
Cash Advance on the relevant Drawdown Date in accordance with Clause
9.1.1 (Payments).
5.4.2 If prior to an Advance being made a Lender's Commitment has been or
will be wholly cancelled or terminated pursuant to this Agreement,
that Lender will not participate in the Advance concerned.
5.4.3 (a) The issue of a Revolving Credit Guarantee or Revolving L/C will
constitute a utilisation of the Tranche B Multicurrency
Revolving Facility and accordingly the Tranche B Multicurrency
Revolving Facility will be deemed to have been drawn down (and
an Advance made) on the relevant Drawdown Date in an amount
equal to the maximum aggregate liability of the Issuing Lender
thereunder and on the basis that each Lender has participated
in such drawing in an amount equal to its Participation
Proportion.
(b) The issue of a Banesto Term Letter of Credit or SINAC Term
Guarantee will constitute a utilisation of the Tranche B
Multicurrency Term Facility and accordingly the Tranche B
Multicurrency Term Facility will be deemed to have been drawn
down (and an Advance made) on the Initial Drawdown Date in an
amount equal to the maximum aggregate liability of the Issuing
Lender thereunder and on the basis that each Lender has
participated in such drawing in an amount equal to its
Participation Proportion.
5.5 Notice to the Lenders of a Proposed Drawdown
--------------------------------------------
Whenever the Agent receives a Drawdown Request which complies with the
requirements of Clause 5.1, 5.2 or 5.3, the Agent will promptly give
notice to each of the Lenders (and the Issuing Lender in the case of
Clauses 5.2 and 5.3) of (a) the details of the requested Cash Advance,
Revolving Credit Guarantee, Revolving L/C, Banesto Term Letter of
Credit or SINAC Term Guarantee and (b) in the case of an Advance the
amount of such Lender's participation (or deemed participation) in the
relevant Advance .
5.6 Payment of Fees
---------------
The Borrowers authorise the Agent to discharge the fees due upon
Initial Drawdown under Clauses 11.1.1(a), (b) and (c) from the
proceeds of the Advances made upon Initial Drawdown under any
Facility. The Borrowers shall be obliged to make such a drawing in an
amount sufficient to discharge such fees on the Initial Drawdown Date.
5.7 Indemnity from the Requesting Borrower
--------------------------------------
5.7.1 The Borrower on whose behalf a Revolving Credit Guarantee, Revolving
L/C, Banesto Term Letter of Credit or SINAC Term Guarantee is
requested (the "Requesting Borrower") agrees to pay to each Issuing
-------------------
Lender from time to time on demand an amount equal to each amount
paid out by such Issuing Lender
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<PAGE>
under any such Revolving Credit Guarantees, Revolving L/Cs, Banesto
Term Letter of Credit or SINAC Term Guarantee issued by it and
undertakes to indemnify and hold harmless the Issuing Lender from and
against all losses, liabilities, damages, costs and expenses which the
Issuing Lender incurs or sustains (other than as a result of the
wilful misconduct or negligence of the Issuing Lender) in connection
with or by reference to the issue of each such Revolving Credit
Guarantee, Revolving L/C, Banesto Term Letter of Credit and/or SINAC
Term Guarantee or its performance of its obligations thereunder or
otherwise in respect of the issue of any such Revolving Credit
Guarantee, Revolving L/C, Banesto Term Letter of Credit and/or SINAC
Term Guarantee, provided that, notwithstanding the foregoing, if on
--------
the date of a payment of any amount by the Agent under the Banesto
Term Letter of Credit which amount represents a drawing by the
beneficiary thereof of principal, and accrued but unpaid interest on
such principal, on or after the scheduled maturity or redemption of
the Tudor Convertible Bonds held by the beneficiary and the conditions
precedent set forth in Clause 4.2 hereof are satisfied (treating the
conversion described in this proviso as the making of an Advance for
such purpose), then such amount shall automatically and simultaneously
with such payment be converted to a Cash Advance and thereupon shall
be included in the amounts repayable pursuant to Clause 6, Schedule 2
and Clauses 7 and 14, and shall bear interest as set forth in Clause
8, and shall in all other respects thereafter be treated as a Cash
Advance.
5.7.2 The Requesting Borrower hereby irrevocably authorises each Issuing
Lender to pay without investigation or confirmation by it any demand
which appears on its face to be validly made under or pursuant to any
Revolving Credit Guarantee, Revolving L/C, Banesto Term Letter of
Credit or SINAC Term Guarantee issued by such Issuing Lender and
agrees that, as between itself, such Issuing Lender and the Lenders,
such demand, in the absence of manifest error (or wilful misconduct or
negligence of the Issuing Lender), shall be conclusive evidence that
the demand is properly made.
5.7.3 Each Issuing Lender shall, upon receipt by it of a demand made under a
Revolving Credit Guarantee, Revolving L/C, Banesto Term Letter of
Credit or SINAC Term Guarantee issued by it, promptly notify the
Borrowers' Agent and, if such Issuing Lender is not also the Agent,
the Agent (who shall notify the Lenders) of such demand.
5.7.4 The Requesting Borrower shall not by virtue of any payment made by it
under this Clause 5.7 be subrogated to any rights, security or moneys
held or received by any Issuing Lender or be entitled at any time to
exercise, claim or have the benefit of any right of subrogation
against such Issuing Lender or any other Finance Party until all
amounts which may be or become payable by the Borrowers under the
Finance Documents have been irrevocably paid in full and all
Commitments hereunder shall have terminated. All rights of
contribution against any Finance Party are hereby waived by the
Requesting Borrower.
5.7.5 The obligations of the Requesting Borrower under this Clause 5.7 shall
be in addition to and shall not be in any way prejudiced by:-
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(a) any collateral or other security hereafter held by any Issuing
Lender as security or any lien to which such Issuing Lender may
be entitled (including, without limitation, under or by reason of
any of the Finance Documents); or
(b) any rights of enforcement which any Issuing Lender may have
against the Requesting Borrower or any of its assets or against
any other person or any of its assets,
and nothing herein contained shall require any Issuing Lender to
enforce any such collateral or other security or lien or to exercise
any such rights of enforcement as a pre-condition to enforcing the
obligations of the Requesting Borrower to such Issuing Lender under
this Clause 5.7.
5.8 Indemnities in favour of Issuing Lenders
----------------------------------------
(a) Each of the Tranche B Revolving Lenders other than the relevant
Issuing Lender (each being a "Revolving Indemnity Lender") hereby
--------------------------
irrevocably and unconditionally undertakes to indemnify each
Issuing Lender (in the proportion which such Revolving Indemnity
Lender's Net Tranche B Multicurrency Revolving Commitment bears
to the Net Tranche B Multicurrency Revolving Commitments of all
of the Lenders) on its first demand against all amounts due and
payable from time to time from the Requesting Borrower to such
Issuing Lender and which are unpaid as a result of the Requesting
Borrower's failure to discharge its obligations and liabilities
to such Issuing Lender under Clause 5.7 in respect of a Revolving
Credit Guarantee or a Revolving L/C.
(b) Each of the Tranche B Multicurrency Term Lenders other than the
relevant Issuing Lender (each being a "Term Indemnity Lender";
---------------------
the Term Indemnity Lenders together with the Revolving Indemnity
Lenders being the "Indemnity Lenders") hereby irrevocably and
-----------------
unconditionally undertakes to indemnify the Issuing Lender (in
the proportion which such Term Indemnity Lender's Tranche B
Multicurrency Term Commitment bears to the Tranche B
Multicurrency Term Commitments of all of the Lenders) on its
first demand against all amounts due and payable from time to
time from the Requesting Borrower to such Issuing Lender and
which are unpaid as a result of the Requesting Borrower's failure
to discharge its obligations and liabilities to such Issuing
Lender under Clause 5.7 in respect of a Banesto Term Letter of
Credit or a SINAC Term Guarantee.
5.9 Counter Indemnity by the Requesting Borrower
--------------------------------------------
In consideration of each of the Indemnity Lenders agreeing to
indemnify the Issuing Lenders in accordance with the terms of Clause
5.8, the Requesting Borrower hereby irrevocably and unconditionally
agrees to indemnify each of the Indemnity Lenders promptly after its
first written demand against all actions,
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claims, liabilities, losses, damages, costs and expenses which may
result or which any of the Indemnity Lenders may suffer or incur as a
result of the Requesting Borrower's failure to discharge its
obligations and liabilities in full to the Issuing Lenders in
connection with the particular Revolving Credit Guarantee, Revolving
L/C, Banesto Term Letter of Credit or SINAC Term Guarantee in respect
of which the indemnity pursuant to Clause 5.8 is given.
5.10. Deemed Advance Indemnities Generally
------------------------------------
5.10.1 Each Indemnity shall continue in full force and effect until the
relevant Indemnified Party shall cease to have any liability in
respect of the Indemnified Obligations (which shall include, in the
case of an Issuing Lender, any liability to issue a Revolving Credit
Guarantee, Revolving L/C, Banesto Term Letter of Credit or SINAC Term
Guarantee).
5.10.2 Each Indemnifying Party undertakes in favour of the relevant
Indemnified Party that its liabilities and obligations under the
relevant Indemnity shall not be discharged, lessened or impaired by:-
(a) any time or indulgence being given or by any thing being done or
other circumstances whatsoever which, but for this provision,
would or might operate to exonerate or discharge it; or
(b) by the failure of any relevant Indemnified Party fully or
effectively to take, perfect or enforce any security or other
rights against it or any third party, or by its bankruptcy,
insolvency or reorganisation.
5.10.3 Each Indemnifying Party undertakes in favour of the relevant
Indemnified Party that the relevant Indemnity shall constitute and be
a continuing security to the relevant Indemnified Party and is in
addition to and not in substitution for, and shall not be prejudiced
or affected by, any other security, guarantee or indemnity now or
hereafter held by the relevant Indemnified Party for the payment of
such moneys or by any such party's or any other person's failure to
take, perfect or enforce any other security or claim which is the
subject of the relevant Indemnity.
5.10.4 In the case of the Requesting Borrower only, it will on demand by the
relevant Indemnified Party pay interest on each amount payable to such
Indemnified Party from the date on which demand is made until such
amount is paid in full at the Default Rate.
5.10.5 The obligations of each Lender under an Indemnity shall be several.
Failure of a Lender to carry out its obligations under an Indemnity
shall not relieve any other Lender of its obligations thereunder.
Neither the Agent nor any Lender shall be responsible for the
obligations of any other Lender under an Indemnity.
5.10.6 No Indemnity by a Lender shall be affected in any way by any time or
indulgence granted to the Requesting Borrower or a beneficiary under a
Revolving Credit Guarantee, Revolving L/C, Banesto Term Letter of
Credit or
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SINAC Term Guarantee or by any variation, compromise or release of any
of the Requesting Borrower's obligations to the Issuing Lender.
5.10.7 No Indemnity by the Requesting Borrower shall be affected in any way
by any time or indulgence granted to a beneficiary under a Revolving
Credit Guarantee, Revolving L/C, Banesto Term Letter of Credit or
SINAC Term Guarantee or to any other party or by any variation,
compromise or release of any of the Indemnified Obligations.
5.10.8 No Indemnifying Party's obligations under an Indemnity shall be
affected by any act, omission, matter or thing which, but for this
provision, might operate to release or to otherwise exonerate it from
its obligations under the relevant Indemnity.
5.10.9 Each Indemnity shall be of a continuing nature and shall not be
considered as wholly or partially satisfied by the payment at any time
or times hereafter of any sum or sums of money for the time being due
but shall extend to cover and be a security for all future sums of
money at any time owing to the relevant Indemnified Party in respect
of the Indemnified Obligations notwithstanding any such payment.
5.10.10 As a separate and independent stipulation each Indemnifying Party
agrees that any sum or sums of money intended to be the subject of an
Indemnity shall be recoverable from it as sole principal debtor even
if they would not be recoverable from the primary obligor whether by
reason of any legal limitation, disability or incapacity or
liquidation of that obligor or any other fact or circumstance (whether
known to the Indemnified Party or not) but which would have been
recoverable from the Indemnifying Party if it were the sole or
principal debtor in respect of such liability.
5.10.11 Any transaction which may be avoided under any enactment relating to
any administration, winding up or liquidation shall not in any way
affect any Indemnified Party's right to recover from the relevant
Indemnifying Party to the full extent of the relevant Indemnity in all
respects as if any release, settlement, discharge or arrangement made
or given on the faith of such transaction had never been made or
given.
5.10.12 Each Indemnifying Party hereby represents and warrants in respect of
itself that the Indemnities given by it constitute its legal, valid
and binding obligation and that all corporate, governmental, exchange
control and other consents or requirements necessary in relation to
such Indemnity have been obtained and are in force.
5.10.13 No invalidity or unenforceability of all or any part of this Clause
5.10 (or Clause 5.7, 5.8 or 5.9) shall affect any rights of indemnity
or otherwise which any Indemnified Party would or may have in the
absence of or in addition to such Clauses.
5.10.14 Any statement of account of any of the Issuing Lenders and any
Indemnity Lender certified as correct by an officer of the relevant
Issuing Lender or, as the
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case may be, any Indemnity Lender showing the amount owing by the
Requesting Borrower to such Indemnity Lender or the relevant Issuing
Lender under or in connection with this counter-indemnity shall, in
the absence of manifest error, be binding on and against the
Requesting Borrower.
5.11 Repayment
---------
5.11.1 Forthwith upon the Agent issuing a notice under Clause 14.2 the
Requesting Borrower will forthwith pay to each of the Issuing Lenders
and the Lenders (as the case may be), an amount equal to the Revolving
Credit Guarantee Outstandings, Revolving L/C Outstandings, Banesto
Term Letter of Credit Outstandings and SINAC Term Guarantee
Outstandings, together with all fees, commissions and other amounts
payable under or in respect of the Revolving Credit Guarantees,
Revolving L/Cs, Banesto Term Letter of Credit and SINAC Term
Guarantee, issued by each such Issuing Lender.
5.11.2 The obligations of the Requesting Borrower under this Clause 5.11
shall constitute a liquidated and accrued debt due and payable for the
benefit of the relevant Issuing Lender or the Lenders (as the case may
be) to be dealt with on the terms of the said account or accounts as
determined by the relevant Issuing Lender or the Lenders (as the case
may be).
5.11.3 If the Agent has issued a notice under Clause 14.2, then, at any time
thereafter if any such event shall then be continuing, each Issuing
Lender may enter into any arrangements with all or any of the
beneficiaries of the Revolving Credit Guarantees, Revolving L/Cs,
Banesto Term Letter of Credit or SINAC Term Guarantee issued by it (or
any of them), including but not limited to negotiating any compromise,
release, reduction, retirement or closing out of the relevant
Revolving Credit Guarantees, Revolving L/Cs, Banesto Term Letter of
Credit or SINAC Term Guarantee on such terms as may be agreed (and/or
paying the amount of any cash cover to such beneficiaries (or any of
them) in satisfaction of such Issuing Lender's liabilities), and any
payment made pursuant to or in connection with any Revolving Credit
Guarantee, Revolving L/C, Banesto Term Letter of Credit or SINAC Term
Guarantee issued by it shall be treated as a payment pursuant to or in
connection with the relevant Revolving Credit Guarantees, Revolving
L/Cs, Banesto Term Letter of Credit or SINAC Term Guarantee for the
purposes of Clause 5.7.
5.11.4 To the extent any contingent liability of an Issuing Lender, in
respect of a Revolving Credit Guarantee, Revolving L/C, Banesto Term
Letter of Credit or SINAC Term Guarantee to a third party, included in
whole in the calculation of Revolving Credit Guarantee Outstandings,
Revolving L/C Outstandings, Banesto Term Letter of Credit Outstandings
or SINAC Term Guarantee Outstandings for purposes of a payment
actually made by a Requesting Borrower pursuant to Clause 5.11.1,
7.2(c) or 14.2(c), irrevocably ceases to exist as either a contingent
or actual liability of the Issuing Lender without being paid by the
relevant Issuing Lender (whether because of expiration of the relevant
Revolving Credit Guarantee, Revolving L/C, Banesto Term Letter of
Credit or SINAC Term Guarantee prior to a drawing thereon or any other
reason), such
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Issuing Lender shall promptly pay to the relevant Borrower an amount
equal to such contingent liability.
6. REPAYMENT.
---------
6.1 Repayment of Tranche A Term Loan and Tranche B Multicurrency Term Loan
----------------------------------------------------------------------
6.1.1 On each Repayment Date, each Borrower shall repay or cause the
repayment (as applicable) of the aggregate amount of the Tranche A
Term Loan and Tranche B Multicurrency Term Loan set forth opposite
such date in Schedule 2 and/or the Equivalent Amount (calculated by
reference to the exchange rates utilised two Business Days prior to
the Initial Drawdown Date) in any other currency or currencies in
which such Loans made to the Borrowers are outstanding, such payment
obligations to be allocated among the relevant Borrowers in proportion
to the respective amounts borrowed by them.
6.1.2 If any Repayment Date is not a Business Day it will be adjusted to
fall on the next succeeding Business Day unless the result of such
adjustment would be to carry that Repayment Date into another calendar
month, in which event such Repayment Date shall be the last preceding
Business Day.
6.1.3 Any amount of the Tranche A Term Loan and Tranche B Multicurrency Term
Loan repaid under this Agreement may not be redrawn and the relevant
Tranche A Term Commitment or Tranche B Multicurrency Term Commitment
shall be reduced by an amount equal to the amount of such Loan so
repaid.
6.2 Repayment of Tranche B Multicurrency Revolving Advances
-------------------------------------------------------
6.2.1 Each Cash Advance under the Tranche B Multicurrency Revolving Facility
shall be borrowed for a period equal to the Interest Period selected
in relation to such Cash Advance. The relevant Borrower shall
accordingly repay each such Cash Advance on the last day of such
Interest Period in the currency in which such Cash Advance was made to
that Borrower.
6.2.2 The Borrowers shall ensure that (i) the aggregate principal amount of
all Tranche B Multicurrency Revolving Advances from time to time
outstanding does not exceed the aggregate amount of the Tranche B
Multicurrency Revolving Facility from time to time (including
Equivalent Amounts in respect of Advances not denominated in FF), and
(ii) the aggregate principal amount of Tranche B Multicurrency
Revolving Advances to a particular Borrower does not exceed such
Borrower's Borrowing Limit. Any amounts outstanding under the Tranche
B Multicurrency Revolving Facility in breach of this Clause 6.2.2
shall become immediately repayable by the relevant Borrower to the
Lenders.
6.2.3 Subject to the provisions of this Agreement, Tranche B Multicurrency
Revolving Advances repaid in accordance with Clause 6.2.1 above shall
be capable of being redrawn by the Borrowers.
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6.2.4 Subject to the terms of this Agreement, if any Tranche B Multicurrency
Revolving Advance (the "New Advance") is to be made to a Borrower on
the day on which another Tranche B Multicurrency Revolving Advance
denominated in the same currency (the "Maturing Advance") is due to be
repaid (the "Maturity Date") by such Borrower then (subject to there
being no Event or Default or Potential Event of Default), as between
each Lender and the relevant Borrower the amount to be repaid by such
Borrower by way of Maturing Advance shall be set off against the
amount of the New Advance to be advanced by each Lender (in respect of
its participation) and the party to whom the smaller amount is to be
paid shall advance or repay (as appropriate) to the party to whom the
larger amount is to be paid the difference between the two amounts on
the Maturity Date.
7. PREPAYMENT AND CANCELLATION.
---------------------------
7.1 Voluntary Prepayments
---------------------
7.1.1 Subject to the order of application set forth in Clause 7.4.1, each
Borrower may voluntarily prepay the whole or part of any Advance made
to it on the last day of an Interest Period (or on any other Business
Day subject to payment of any breakage costs thereby incurred by any
Lender in accordance with Clause 27.1) relating thereto provided that
the Agent has received from the Borrowers' Agent not less than ten
Business Days' notice of the proposed date and the amount of the
prepayment.
7.1.2 If one or more Tranche A Term Loans, Tranche B Multicurrency Term
Loans or Tranche B Multicurrency Revolving Loans are to be prepaid
voluntarily in part, the aggregate amount of the partial prepayment
must be a minimum of the Equivalent Amount of FF 5,000,000 and an
integral multiple of the Equivalent Amount of FF 1,250,000.
7.1.3 A prepayment made in accordance with the terms of this Clause 7 may be
made without penalty.
7.2 Prepayment on Change of Control or Flotation
--------------------------------------------
Immediately upon a Change of Control or Flotation:
(a) the Borrowers will prepay all Cash Advances, accrued interest
thereon and all other sums payable under this Agreement and the
other Finance Documents;
(b) the unborrowed amount of all Facilities will be cancelled and the
Commitment of each Lender in respect of each Facility shall be
reduced to zero; and
(c) the Borrowers will immediately, at the option of the Agent, (i)
procure that each Revolving Credit Guarantee, Revolving L/C,
Banesto Term Letter of Credit and SINAC Term Guarantee is
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cancelled with immediate effect, (ii) pay to the relevant Issuing
Lender an amount equal to the Revolving Credit Guarantee
Outstandings, Revolving L/C Outstandings, Banesto Letter of
Credit Outstandings and SINAC Term Guarantee Outstandings (as
applicable) allocable thereto or (iii) provide to the Agent a
counterguaranty or an indemnity satisfactory in all respects to
the Agent and the Lenders in an amount equal to the amount set
forth in the preceding item (ii) of this subclause 7.2(c) or (iv)
provide the beneficiary of each Revolving Credit Guarantee,
Revolving L/C, Banesto Term Letter of Credit and SINAC Term
Guarantee a new letter of credit, satisfactory in all respects to
such beneficiary, in substitution therefor (which substitution
shall include a release of all obligations of the Issuing Lender
for such Revolving Credit Guarantee, Revolving L/C, Banesto Term
Letter of Credit and SINAC Term Guarantee).
7.3 Mandatory Prepayments
---------------------
7.3.1 Equity Sales, Assets Disposals and Receivables Financings
---------------------------------------------------------
If any member of the Borrowing Group carries out an Equity Sale or
otherwise disposes of an asset (other than:-
(a) a disposal permitted by Clauses 13.2.8(a), (b), (c), (g), (i),
(j), (k) or (l), or
(b) disposals permitted by Clauses 13.2.8(d) and (e) (inclusive) up
to an aggregate amount of Net Cash Proceeds for all such
disposals described in this sub-clause (b) of FF 50,000,000 or
its Equivalent Amount following the date of this Agreement),
the Net Cash Proceeds of such Equity Sale or disposal shall be applied
by such member or, if such member is not an Obligor, then to the
extent permitted by applicable law and giving effect to the provisions
of Clause 15.1(b) and the obligations of the Guarantors set forth
therein, the Obligor which is the immediate parent of such member, as
promptly as practicable in prepayment of the outstandings under this
Agreement in accordance with Clause 7.4.1 below.
7.3.2 Pension Plan Reversions
-----------------------
If any member of the Borrowing Group receives any pension plan
reversion such member or, if such member is not an Obligor, then to
the extent permitted by applicable law and giving effect to the
provisions of Clause 15.1(b) and the obligations of the Guarantors set
forth therein, the Obligor which is the immediate parent of such
member, will make a prepayment as promptly as practicable of the
outstandings under this Agreement in accordance with Clause 7.4.1
below in an amount equal to such pension plan reversion.
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7.3.3 Cash Flow
---------
To the maximum extent permitted by applicable law and giving effect to
the provisions of Clause 15.1(b) and the obligations of the Guarantors
set forth therein, the Lead Borrowers will once per annum make a
prepayment in two instalments to be applied against the outstandings
(including without limitation any Deemed Advances) under this
Agreement in accordance with Clause 7.4.1 below within, in the case of
the first such instalment, 135 days and in the case of the second
instalment, 270 days, of the expiry of the final Accounting Quarter of
each Accounting Reference Period in the amount of 75% of the aggregate
of (i) the consolidated Cashflow of CEAC (determined in accordance
with CEAC Approved Accounting Principles) for the Accounting Reference
Period then ended, (ii) the consolidated Cashflow of Euro Exide
(determined in accordance with Euro Exide Approved Accounting
Principles) for the Accounting Reference Period then ended, (iii) the
consolidated Cashflow of Tudor (determined in accordance with Tudor
Approved Accounting Principles) for the Accounting Reference Period
then ended, (iv) the unconsolidated Cashflow of EHE (determined in
accordance with EHE Approved Accounting Principles) for the Accounting
Reference Period then ended, and (v) the consolidated Cashflow of each
Sub-Group Holding Company (other than CEAC, Euro Exide and Tudor), if
any, determined in accordance with the relevant Approved Accounting
Principles for the Borrowing Sub-Group of which it is a member, for
the Accounting Reference Period then ended, and in each such case, if
a positive number.
7.3.4 Prepayments Due to Other Events
-------------------------------
Without duplication of the requirements of Clauses 7.3.1, 7.3.2 and
7.3.3, each Borrower will make a prepayment of the outstandings under
this Agreement in accordance with Clause 7.4.1 below as promptly as
practicable following the occurrence of any event in respect of such
Borrower which would require a mandatory prepayment under the Parent
Credit Agreement of any amount received by it or any of its
subsidiaries (or any part of such amount), in an amount equal to the
amount that would otherwise be applied but for the operation of this
Clause 7.3.4 in respect of a mandatory prepayment of the outstandings
under the Parent Credit Agreement in accordance with the terms
thereof.
7.4 Prepayments; Order of Application
---------------------------------
7.4.1 Partial prepayments made pursuant to Clauses 7.1 and 7.3 will be
applied by the Borrowers first, subject to clause 7.7.6, to the
-----
permanent prepayment of the Tranche A Term Loan (to be applied, other
than in the case of Clause 7.1, against the scheduled repayments
thereof in inverse order of maturity and, in the case of Clause 7.1,
pro-rata against the scheduled repayments thereof); second to the
------
permanent prepayment of the Tranche B Multicurrency Term Loan (to be
applied pro rata against the scheduled repayments thereof); and third
-----
to the permanent prepayment of Tranche B Multicurrency Revolving
Loans.
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7.4.2 Amounts applied in permanent repayment of the Tranche B Multicurrency
Revolving Loans may not be redrawn and, upon any such prepayment, each
Lender's Tranche B Multicurrency Revolving Commitment shall be reduced
proportionately.
7.5 Prepayments during Interest Periods
-----------------------------------
7.5.1 Prepayments pursuant to Clauses 7.1, 7.2 and 7.3 applied to the
obligations of the Borrowers hereunder shall be subject to payment of
any breakage costs incurred by any Finance Party, calculated in
accordance with Clause 27.1 (General Indemnity and Breakage Costs).
7.6 Cancellation
------------
7.6.1 The Borrowers' Agent may cancel the whole or any part (but if in part,
in a minimum amount of the Equivalent Amount of FF 25,000,000 and
integral multiples of the Equivalent Amount of FF 5,000,000) of the
Tranche B Multicurrency Revolving Facility undrawn when the notice of
cancellation takes effect if it gives 3 Business Days' written notice
of cancellation to the Agent. Cancellation made in accordance with the
terms of this Clause 7 may be made without penalty.
7.6.2 No cancellation may be made if it would result in the Tranche B
Multicurrency Revolving Advances outstanding at the time of the
proposed cancellation exceeding the total Tranche B Multicurrency
Revolving Commitments. Upon any such cancellation taking effect the
maximum amount of the Tranche B Multicurrency Revolving Facility shall
be accordingly reduced and the amount of each Lender's Tranche B
Multicurrency Revolving Commitment (if any) shall be reduced
proportionately.
7.7 General
-------
7.7.1 No prepayment or cancellation may be made except at the times and in
the manner expressly provided by this Agreement.
7.7.2 No amount prepaid in respect of the Tranche A Term Facility or Tranche
B Multicurrency Term Facility may be subsequently re-drawn.
7.7.3 All prepayments shall be made together with interest accrued thereon
up to the date of prepayment and any other amounts then due and
payable under any Finance Document.
7.7.4 The Agent shall notify the Lenders promptly upon receipt by it of a
notice of prepayment or cancellation.
7.7.5 All notices of prepayment and all notices of cancellation given by the
Borrowers' Agent shall be irrevocable.
7.7.6 Clauses 7.1 and 7.3 shall not require any member of the Borrowing
Group to perform any act prohibited by law or regulation, but the
members of the
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Borrowing Group undertake to use their best endeavours to comply with,
or procure compliance with, that Clause, including by way of
dividends, transfer, inter-company loans or otherwise, except to the
extent that the Agent reasonably determines (upon consultation with
the Borrowers' Agent) that such compliance or procurement would result
in an expense which is unjustifiable relative to the benefits
obtainable by the Finance Parties therefrom.
8. INTEREST.
--------
8.1 Interest Rate
-------------
8.1.1 Each Cash Advance will bear interest during each Interest Period
applicable to that Advance at the rate per annum determined by the
Agent to be the sum of (a) the applicable Margin, (b) for any Advance
not denominated in FF, LIBOR for such Interest Period, (c) for any
Advance denominated in FF, PIBOR for such Interest Period in the case
of a PIBOR-Eligible Lender or LIBOR for such Interest Period in the
case of each other Lender and (d) in the case of Cash Advances
denominated in GBP or another currency subject to Mandatory Liquid
Asset Costs, Mandatory Liquid Asset Costs.
8.1.2 Interest will be calculated on the basis of actual days elapsed and a
360-day year (other than interest in respect of Cash Advances
denominated in GBP, which will be calculated on the basis of a year of
365 days), and will accrue from day to day from, and including, the
first day of each Interest Period.
8.1.3 If requested to do so, each Reference Lender shall use its reasonable
endeavours to supply a quotation to the Agent for the purposes of
determining LIBOR or PIBOR (as the case may be) for a particular
Interest Period. If any Reference Lender does not do so, the relevant
arithmetic mean shall be determined on the basis of the quotations
supplied by the remaining Reference Lenders. At such time as there are
three Reference Lenders, if no, or only one, Reference Lender supplies
a quotation, Clause 8.5 shall apply; provided that if there are only
--------
two Reference Lenders and one supplies a quotation, Clause 8.5 shall
not apply in such case.
8.2 Payment of Interest
-------------------
The relevant Borrower will pay interest accrued on each Cash Advance
to the Agent for the account of the Lenders in arrears on the last day
of each Interest Period applicable to that Advance, provided that
where such Interest Period is of a duration of longer than three
months, accrued interest in respect of the relevant Advance shall be
paid every three months during such Interest Period and on the last
day of such Interest Period.
8.3 Selection of Interest Periods
-----------------------------
8.3.1 Subject to Clause 3.5.5, the duration of each Interest Period will be
a period of one, two, three or six months (or such other period as may
be agreed between the Borrowers' Agent, acting on behalf of the
relevant Borrower, and all of the
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Lenders) as notified by the Borrowers' Agent to the Agent not later
than 10.00 a.m. three Business Days prior to the commencement of such
Interest Period, provided that:-
(a) the first Interest Period in relation to a Tranche A Term Advance
or Tranche B Multicurrency Term Advance will commence on the
Drawdown Date relating thereto and each subsequent Interest
Period relating to such Advance (or part thereof) will commence
on the expiry of the preceding Interest Period relating thereto;
(b) if the Borrowers' Agent fails to select an Interest Period, then,
subject as provided in this Clause 8.3, the Borrowers' Agent will
be deemed to have selected an Interest Period of three months;
(c) if all or part of a Tranche A Term Advance or Tranche B
Multicurrency Term Advance is required to be repaid on a
Repayment Date to ensure that the Borrowers comply with their
obligations under Clause 6.1.1 and if an Interest Period relative
to that Advance would, but for the operation of this sub-clause
(c), extend beyond such Repayment Date, then if necessary such
Advance shall be split into two separate Advances (such
additional Advance not to be counted for the purposes of sub-
clause (d) below), one of which shall be in an amount equal to
the amount required to be repaid and having an Interest Period
commencing upon the expiry of the immediately preceding Interest
Period and expiring on the relevant Repayment Date, the other
Advance being for the balance of the amount of the original
Advance; and
(d) the Borrowers' Agent will not be entitled to select more than two
concurrent Interest Periods in relation to the Tranche A Term
Advances or the Tranche B Term Advances.
8.3.2 If any Interest Period would, but for this Clause 8.3.2, end on a day
which is not a Business Day, that Interest Period shall be extended to
the next succeeding Business Day unless the result of such extension
would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the last preceding
Business Day.
8.3.3 No Interest Period for any Advance shall expire after the Final
Repayment Date.
8.3.4 The Agent will notify:-
(a) the Lenders of each Interest Period applicable to each Advance
promptly upon the same being determined; and
(b) the Lenders and the Borrowers' Agent of the rate of interest
applicable to such Interest Period as soon as it is determined
under this Agreement.
8.4 Interest on Unpaid Sums
-----------------------
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8.4.1 If an Obligor fails to pay any sum under this Agreement or any other
Finance Document on its due date (an "unpaid sum"), that Obligor will
----------
pay default interest on such unpaid sum from its due date to the date
of actual payment (after as well as before judgement) at a rate (the
"Default Rate") determined by the Agent to be 2 per cent per annum
------------
above:-
(a) if the unpaid sum is principal which has fallen due prior to the
expiry of the relevant Interest Period, the rate applicable to
such principal immediately prior to the date it so fell due (but
only for the period from such due date to the end of the relevant
Interest Period); or
(b) in any other case (including principal falling within (a) above
once the relevant Interest Period has expired), the rate which
would be payable if the unpaid sum was an Advance made for a
period equal to the period of non-payment divided into successive
Interest Periods of such duration as shall be selected by the
Agent (a "Default Interest Period").
-----------------------
8.4.2 Default interest will be payable by the relevant Borrower on demand by
the Agent and will be compounded at the end of each Default Interest
Period to the extent not paid.
8.4.3 The Agent will promptly notify the Borrowers' Agent and the Lenders of
each determination of the Default Rate and each selection of a Default
Interest Period.
8.5 Market Disruption
-----------------
8.5.1 If prior to the commencement of an Interest Period (an "Affected
--------
Interest Period"):
---------------
(a) the Agent, after consultation with the Lenders, reasonably
determines that, by reason of circumstances affecting the London
or Paris interbank market (as the case may be) or the financial
markets generally, adequate and fair means do not or will not
exist for ascertaining the interest rate applicable to the
Affected Interest Period; or
(b) Lenders whose Relevant Amounts exceed 51% of Relevant Amounts of
all Lenders notify the Agent that LIBOR (in the case of any
Advance not denominated in FF) or PIBOR or LIBOR, as applicable,
(in the case of any Advance denominated in FF) would not
accurately reflect the cost to such Lenders of making or
maintaining their respective participations in the relevant
Advance during the Affected Interest Period; or
(c) the appropriate page of the Telerate Display Screen does not list
any appropriate quotations and at such time as there are three
Reference Lenders none or only one of the Reference Lenders has
notified a rate to the Agent for the purposes of determining
LIBOR or PIBOR (as the case may be) for the Affected Interest
Period;
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the Agent shall give notice of such event to the Borrowers' Agent and
the Lenders (a "Suspension Notice"). If such Suspension Notice shall
-----------------
be given prior to the receipt by the Agent of a Drawdown Request, the
Borrowers' right to borrow and issue a Drawdown Request in respect of
Advances hereunder shall be suspended during the continuance of such
circumstances.
8.5.2 If at the time of the Suspension Notice a Drawdown Request has been
given pursuant to Clause 5.1.1, such Drawdown Request shall, unless
the Borrowers' Agent and the Agent (after consultation with the
Lenders) otherwise agree, be deemed to have been cancelled and the
Advance concerned shall not be made.
8.5.3 Subject to Clause 8.5.4, during the 21 days following the giving of
the Suspension Notice, the Agent, the Borrowers' Agent and the Lenders
shall negotiate in good faith in order to arrive at a mutually
acceptable substitute basis for calculating the alternative interest
rate or (as the case may be) an alternative basis for the relevant
Lender to fund or continue to fund the affected Advance during the
Affected Interest Period on the basis that the net return to the
Lenders or the relevant Lender shall be no less than had the event
described in Clause 8.5.1 not occurred. If within such 21 day period
such parties shall agree in writing upon a substitute basis, such
substitute basis shall apply in accordance with its terms. If such
parties fail to agree on a substitute basis within such 21 day period,
the Agent (after consultation with the Lenders or, as the case may be,
the relevant Lender) shall certify to the Borrowers' Agent (such
certificate to be conclusive in the absence of manifest error and
binding on all concerned) the basis upon which interest in relation to
the Affected Interest Period is to be fixed or (as the case may be)
the basis upon which the relevant Lender will fund or continue to fund
its participation in the Advance during the Affected Interest Period.
Such basis (in relation to the said rate of interest) may include the
substitution of the cost of funds to such Lenders from other sources
and for different funding periods, plus the Margin (plus, in the case
of Advances denominated in GBP or another currency subject to
Mandatory Liquid Asset Costs, Mandatory Liquid Asset Costs), and may
be retroactive to the beginning of the Affected Interest Period. Such
interest shall be calculated at the rate specified in the Agent's
certificate.
8.5.4 Notwithstanding the foregoing, the Borrowers' Agent may, at any time
after the Agent shall have set a substitute funding procedure or
interest rate or rates pursuant to Clause 8.5.3 and for so long as
such funding procedure or interest rate or rates continue(s) to be
applicable, give to the Agent not less than five Business Days' notice
(which shall be irrevocable) of its intention to prepay the whole (but
not part only) of the Advance affected, in which event the Borrowers
shall pay:-
(a) on the date specified in such notice to the Agent for the account
of the Lenders the principal amount of the Advance affected
together with interest accrued thereon at the applicable rate to
the date of actual prepayment; and
(b) to each Lender on demand such amount (if any) as such Lender may
certify should be paid to it pursuant to Clause 27.1 (General
Indemnity and Breakage Costs).
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9. PAYMENTS.
--------
9.1 Place and Time
--------------
9.1.1 All payments to be made by any Obligor or by a Lender under the
Finance Documents are to be made to the Agent in the relevant currency
for value not later than 11.00 a.m. on the due date therefor to such
account as the Agent specifies by written notice for this purpose, in
immediately available and freely transferable funds for value on the
due date.
9.1.2 Subject to Clause 9.1.3, each payment received by the Agent pursuant
to Clause 9.1.1 for the account of another person will be made
available by the Agent to that person for value on the same day by
transfer to such bank account as that person has previously notified
to the Agent by not less than 3 Business Days' prior notice.
9.1.3 Where a sum is to be paid under the Finance Documents for the account
of another person, the Agent will not be obliged to make any such sum
available to that person until it has been able to establish to its
satisfaction that it has actually received such sum, but shall be free
to do so and if it does so and it proves to be the case that it has
not actually received the sum it paid out, then such person will on
request ensure that the amount so made available is refunded to the
Agent and such person shall be liable (1) to pay to the Agent interest
on the amount in question at the rate determined by the Agent to be
equal to the cost to the Agent of funding such amount for the period
from payment out by the Agent until refund to the Agent thereof and
(2) to indemnify the Agent against any additional cost or loss it may
have suffered or incurred by reason of it having paid out such sum
prior to it having received the same.
9.2 No Deductions
-------------
All payments to be made by the Borrowers and/or the Guarantors under
the Finance Documents (whether of principal, interest, acceptance
commission, fees or otherwise) shall be paid in full without set-off
or counterclaim and not subject to any condition.
9.3 Taxes
-----
9.3.1 All payments by the Borrowers and/or the Guarantors under the Finance
Documents are to be made in full without any deduction or withholding
for or on account of any Taxes unless the deduction or withholding is
required by law in which event the relevant Borrower will:-
(a) ensure that the deduction or withholding does not exceed the
minimum amount legally required;
(b) pay to the relevant Taxation or other authorities within the
period for payment permitted by the applicable law such amount as
is required to be paid in consequence of the deduction
(including, but without prejudice to the generality of the
foregoing, the full amount of any deduction from any additional
amount paid pursuant to Clause 9.3.2);
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(c) deliver to the relevant Finance Parties within thirty (30) days
from the date on which the payment of such withholding tax or
deduction was due, the documents evidencing the payment of such
aforementioned withholding tax or deductions; and
(d) indemnify each of the Finance Parties against any losses or costs
incurred by it by reason of (i) any failure on the part of the
relevant Borrower to make any deduction or withholding or (ii)
any such additional amount not being paid on the due date for
payment thereof.
9.3.2 If any deduction or withholding for or on account of Taxes or any
other deduction from any payments made or to be made by the relevant
Obligor, or by the Agent or Security Agent to any other Finance Party,
under any of the Finance Documents is required by law, then the
relevant Obligor shall pay to the Finance Party concerned an
additional amount being the amount required to procure that the
aggregate net amount received by that Finance Party will equal the
full amount which would have been received by it had no such deduction
or withholding or other deduction been made.
9.3.3 No additional amount will be payable to a Lender under Clause 9.3.2 in
respect of Taxes to the extent that such additional amount becomes
payable as a result only of a change in the Lending Office of the
relevant Lender, unless (i) such change is requested by the Borrowers'
Agent, or (ii) under the relevant Tax laws, regulations, treaties or
rules in effect at the time of the change in Lending Office, such
additional amount would not have been payable.
9.3.4 If a Borrower is obliged to pay an amount under Clause 9.3.1, the
relevant Borrower may prepay in whole (but not in part) and without
penalty (subject to Clause 27) all Advances made available to it by
the affected Lender, on the Borrowers' Agent giving not less than
three Business Days' prior written notice to the Agent and the
affected Lender, provided that such notice is given within 30 days of
the relevant Borrower becoming aware that it would be obliged to pay
such amount and provided further that such obligation was not in
effect as of the date of this Agreement. The liability of such Lender
to make any further Advances or other extensions of credit available
to the Borrowers (and such Lender's Commitments) shall automatically
be cancelled on the giving of such notice.
9.3.5 (a) If any of the Lenders determines, in its reasonable discretion,
that it has received, realised, utilised and retained a Tax
benefit by reason of any deduction or withholding in respect of
which a Borrower or a Guarantor has made an increased payment or
paid any indemnifying amount or compensating sum under this
Clause 9.3, such Lender shall, provided that the Agent and each
Lender has received all amounts which are then due and payable by
the members of the Borrowing Group under any of the Finance
Documents, promptly pay to the Borrowers' Agent on behalf of the
relevant member of the Borrowing Group (to the extent that such
Lender can do so without prejudicing the amount of such benefit
or repayment and the right of such Lender to obtain any other
benefit, relief or allowance which may be available to it) such
amount, if any, as such Lender, in its
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absolute discretion shall determine will leave such Lender in no
worse position than it would have been in if the deduction or
withholding had not been required, provided that:-
(i) each Lender shall have reasonable discretion as to the
time at which and the order and manner in which it
realises or utilises any Tax benefit and shall not be
obliged to arrange its business or its Tax affairs in any
particular way in order to be eligible for any credit or
refund or similar benefit;
(ii) no Lender shall be obliged to disclose any information
regarding its business, Tax affairs or Tax computations;
and
(iii) if a Lender has made a payment to the Borrowers' Agent
pursuant to this Clause 9.3.5 on account of any Tax
benefit and it subsequently transpires that such Lender
did not receive that Tax benefit, or received a lesser Tax
benefit, the relevant member of the Borrowing Group shall,
on demand, pay to such Lender such sum as the relevant
Lender may determine as being necessary to restore its
after-Tax position to that which it would have been had no
adjustment under this Clause 9.3.5(a) been necessary.
(b) No Lender shall be obliged to make any payment under this Clause
9.3.5 if, by doing so, it would contravene the terms of any
applicable law or any notice, direction or requirement of any
governmental or regulatory authority (whether or not having the
force of law).
9.4 Payments on Business Days
-------------------------
Subject to Clauses 6.1.2 and 8.3.2, if any sum would otherwise become
due for payment pursuant to any of the Finance Documents on a day
which is not a Business Day, such sum shall become due on the next
succeeding Business Day unless that day falls in the next calendar
month, in which case the sum shall become due on the last preceding
Business Day and all sums payable under any of the Finance Documents
calculated by reference to any period of time shall be recalculated on
the basis of such extension in time (or reduction thereof).
9.5 Accounts
--------
9.5.1 Each Lender shall maintain an account or accounts recording the
amounts from time to time lent by, owing to and paid to such Lender
pursuant to the Finance Documents, which shall, as between such Lender
and the relevant Obligor, be prima facie evidence of such amounts.
----- -----
9.5.2 The Agent will maintain a memorandum account showing the principal
amount of all Advances for the time being outstanding hereunder and
all payments with respect thereto made by the Borrowers from time to
time pursuant to this Agreement.
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9.6 Currency
--------
(a) A repayment or prepayment of an Advance or any part of an Advance
is payable in the currency in which the Advance was denominated
on the date it was made.
(b) Interest and fees in respect of a Cash Advance, or in respect of
a Revolving Credit Guarantee, Revolving L/C, Banesto Term Letter
of Credit or SINAC Term Guarantee are payable in the currency in
which the relevant amount of the relevant Cash Advance, Revolving
Credit Guarantee, Revolving Letter of Credit, Banesto Term Letter
of Credit or SINAC Term Guarantee in respect of which it is
payable is denominated. Fees in respect of Commitments hereunder
shall be payable in FF.
(c) Amounts payable in respect of costs, expenses and Taxes and the
like are payable in the currency in which they are incurred.
(d) Any other amount payable under this Agreement is, except as
otherwise provided in this Agreement, payable in FF.
10. CHANGE IN CIRCUMSTANCES.
-----------------------
10.1 Increased Costs
---------------
10.1.1 If the effect of any implementation of, change in or introduction or
making after the date of this Agreement of, any law, regulation,
treaty or official directive or official request or guidance
applicable to any Lender or any affiliate, including without
limitation a holding company (an" Affected Lender") (whether or not
---------------
having the force of law) or any change in the interpretation or
application thereof or compliance by that Lender with the same
(including without limitation those relating to Taxation, reserve
asset, special deposit, cash ratio, liquidity or capital adequacy
requirements or any other form of banking or monetary controls) is
to:-
(a) impose an additional cost on the Affected Lender as a result of
it having entered into any of the Finance Documents or making or
maintaining its participation in any Advance or of it performing
its obligations under the Finance Documents; or
(b) reduce any amount received or receivable by the Affected Lender
under the Finance Documents or reduce the effective return on its
capital or any class thereof; or
(c) result in the Affected Lender making any payment or foregoing any
interest or other return on or calculated by reference to any
amount received or receivable by the Affected Lender from any
other party under any of the Finance Documents,
(each such increased cost, reduction, payment, foregone interest or
other return being hereafter referred to in this Clause 10.1 as an
"increased cost"), then:-
--------------
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(1) the Affected Lender will notify the Borrowers' Agent and the
Agent of such event promptly upon its becoming aware of the same;
and
(2) upon demand from time to time by the Affected Lender, the
relevant Borrowers will pay to the Affected Lender such amount as
the Affected Lender shall determine to be necessary to compensate
the Affected Lender on an after-tax basis for such increased cost
(or the portion of such increased cost as is in the reasonable
opinion of the Affected Lender attributable to its entering into
the Finance Documents or of making or maintaining its
participation in any Advance or of maintaining its Commitment).
10.1.2 The certificate of an Affected Lender specifying the amount of
compensation payable under Clause 10.1.1 and containing reasonable
detail as to how such amount was calculated will, in the absence of
manifest error, be conclusive.
10.1.3 The Borrowers will not be obliged to compensate any Affected Lender
pursuant to Clause 10.1.1 in respect of any increased cost:-
(a) attributable to a change in the rate of Tax on the overall net
income of the Affected Lender; or
(b) compensated for by the operation of Clause 9.3 (Taxes); or
(c) incurred in consequence of the implementation in whole or in part
of the International Convergence of Capital Measurements and
Capital Standards dated July 1988 published by the Basle
Committee on Banking Regulations and Supervisory Practices (the
"Guidance"), except to the extent that a higher level of capital
--------
adequacy is imposed than that stipulated in the Guidance as at
the date of this Agreement;
(d) included within the definition of Mandatory Liquid Asset Costs;
or
(e) until the calculation of such cost set forth in the certificate
referred to in Clause 10.1.2 has been received by the Borrowers'
Agent.
10.2 Illegality
----------
If the effect of any implementation of, change in or introduction or
making after the date of this Agreement of any law, regulation, treaty
or official directive or official request or guidance applicable to
any Lender (a "Restricted Lender") (whether or not having the force of
-----------------
law) in any jurisdiction applicable to that Restricted Lender is to
prohibit such Lender or make it illegal for such Lender to make
available or to maintain its participation in any Advance or maintain
its Commitment, then the Restricted Lender will give written notice to
that effect to the Agent and the Borrowers' Agent, specifying in
reasonable detail the obligations the performance of which is
prohibited and the relevant law, regulation, treaty, directive,
request or guideline, whereupon:-
(a) to the extent of such prohibition or illegality, the relevant
Borrowers shall forthwith prepay the Restricted Lender's
participation in all Cash Advances then outstanding together with
all interest accrued
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thereon and all other amounts due to the Restricted Lender under
this Agreement (including pursuant to Clause 27 (Indemnities));
and/or
(b) to the extent of such prohibition or illegality, the Restricted
Lender's undrawn Commitment (if any) shall be cancelled
forthwith.
10.3 Mitigation
----------
If circumstances arise in relation to a particular Lender which would,
or may, result in:-
(a) an obligation to pay an additional amount under Clause 9.3.2
(Gross-Up); or
(b) a demand for compensation pursuant to Clause 10.1 (Increased
Costs); or
(c) an obligation to repay or the cancellation of an undrawn
Commitment under Clause 10.2 (Illegality);
then, without in any way limiting, reducing or otherwise qualifying
the obligations of the Borrowers under any of the Clauses referred to
above, such Lender will promptly after becoming aware thereof notify
the Agent and the Borrowers' Agent thereof and, except as set out in
the provisos in paragraphs (y) and (z) below, in consultation with the
Agent and the Borrowers' Agent, take such steps as may be reasonably
open to it to mitigate the effects of such circumstances including
(but without limitation):-
(i) changing its Lending Office for the purposes of this Agreement;
or
(ii) transferring its rights and obligations hereunder pursuant to
Clause 25.2 or 25.3 to a bank or financial institution acceptable
to the Borrowers' Agent and the Agent which is willing to
participate in the Facilities in its place ;
provided that (y) the Lender concerned will not be obliged to take any
action under sub-paragraph (i) above if to do so would or might (in
its opinion) have an adverse effect upon its business, operations or
financial condition or cause it to incur liabilities (including any
material costs and expenses) or obligations (including Taxation) which
(in its opinion) are material or would reduce its return in relation
to its participation in the Facilities and (z) such Lender will not be
obliged to take the action referred to in sub-paragraph (ii) above
unless the Borrowers indemnify it by means of an indemnity in form and
content satisfactory to such Lender against any liabilities or
obligations reasonably incurred as a result of taking such action.
11. FEES, EXPENSES AND STAMP DUTIES.
-------------------------------
11.1 Fees
----
11.1.1 The Borrowers will pay to the Agent the following fees:-
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(a) for the account of each Lender a commitment fee during the
Availability Period for each respective Facility which will:-
(i) be computed at the rate of 0.50% per annum and on the
daily aggregate undrawn, uncancelled amount of the Total
Commitments;
(ii) accrue from day to day and be calculated on the basis of a
360 day year and the actual number of days elapsed;
(iii) be payable quarterly in arrear on the last day of each
successive calendar quarter, on each drawing under either
Term Facility and on the termination or lapse of the
Availability Period to the extent no drawing under either
Term Facility is made concurrent with such termination or
lapse; and
(b) for the account of each Lender a fee during the term of each
Revolving Credit Guarantee, Revolving L/C, Banesto Term Letter of
Credit or SINAC Term Guarantee which will:-
(i) be computed at an annual rate equal to the Margin in
effect from time to time and be charged by reference to
the amount of the relevant Deemed Advance;
(ii) accrue from day to day and be calculated on the basis of a
360 day year and the actual number of days elapsed; and
(iii) be payable quarterly in arrear on the last day of each
successive calendar quarter;
and, for the account of the Issuing Lender, an additional fee
equal to 1/8 of 1% per annum on the amount of the relevant Deemed
Advance, computed and payable in the same manner as the other
fees described in this sub-clause 11.1.1(b);
(c) for its own account or as otherwise specified in the Fees Letter,
such arrangement, agency and other fees at the times and
otherwise in accordance with the terms of the Fees Letter.
11.1.2 All fees payable under the Finance Documents are exclusive of any VAT
or other similar tax chargeable upon or in connection with such fees.
If any VAT or other similar Tax is or becomes so chargeable, such Tax
will be paid by the relevant Borrower at the same time as the relevant
fee itself is paid.
11.2 Expenses
--------
11.2.1 The Borrowers will on demand pay and reimburse to the Agent and the
Security Agent, on the basis of a full indemnity, all reasonable costs
and expenses (including legal fees, due diligence expenses,
recordation fees of Spanish Notaries, Official Commercial Stockbrokers
or Sociedad Rectora de la Bolsa de Madrid and other out-of-pocket
expenses and any VAT or other similar Tax
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thereon) incurred by the Agent or the Security Agent in connection
with the negotiation, preparation, recordation, execution, completion
and syndication of each of the Finance Documents, and all documents,
matters and things referred to in the Finance Documents or incidental
to any of the Finance Documents.
11.2.2 The Borrowers will on demand pay and reimburse to the Agent and the
Security Agent, on the basis of a full indemnity, all reasonable costs
and expenses (including reasonable legal fees, recordation fees of
Spanish Notaries, Official Commercial Stockbrokers or Sociedad Rectora
de la Bolsa de Madrid and other out-of-pocket expenses and any VAT or
other similar Tax thereon) incurred by the Agent or the Administrative
Agent, respectively, in connection with:-
(a) any variation, recordation, amendment, supplement, restatement,
waiver, consent or suspension of rights (or any proposal for any
of the same) relating to any of the Finance Documents (and
documents, matters or things referred to therein); and
(b) the investigation of any Event of Default or Potential Event of
Default, provided that the relevant Finance Party had reasonable
grounds to believe that such Event of Default or Potential Event
of Default had occurred.
11.2.3 The Borrowers will on demand pay and reimburse to each Finance Party,
on the basis of a full indemnity, all costs and expenses (including
reasonable legal fees recordation fees of Spanish Notaries, Official
Commercial Stockbrokers or Sociedad Rectora de la Bolsa de Madrid and
other out-of-pocket expenses and any VAT or other similar Tax thereon)
incurred by such Finance Party in connection with the preservation,
enforcement or the attempted preservation or enforcement of any of
such Finance Party's rights under any of the Finance Documents (and
documents referred to therein).
11.3 Stamp Duties, etc
-----------------
The Borrowers will:-
11.3.1 pay, and on demand indemnify each Finance Party from and against any
liability for, any stamp duty, documentary, registration and other
duties and Taxes (if any) which are or may hereafter become payable in
connection with the entry into, performance, execution or enforcement
of any of the Finance Documents or to which any of the Finance
Documents may otherwise be or become subject or give rise; and
11.3.2 on demand indemnify each of the Finance Parties from and against any
losses or liabilities which they may incur as a result of any delay or
omission by the Borrowers to pay any such duties or Taxes.
12. REPRESENTATIONS AND WARRANTIES.
------------------------------
12.1 Reliance and Effective Time
---------------------------
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12.1.1 Each Obligor acknowledges that each Finance Party has or will have
entered into this Agreement and the other Finance Documents to which
it is a party and participated in the Advances in full reliance on
representations in the terms set out in the following provisions of
this Clause 12. Subject to Clause 12.1.2, each Borrower and Guarantor
represents and warrants to each Finance Party in the terms set forth
in Clauses 12.2 to 12.20 inclusive with reference to itself and each
of its respective subsidiaries.
12.1.2 The representations and warranties in this Clause 12 will be deemed
initially made on the Initial Drawdown Date and repeated on the date
of delivery of each Drawdown Request and on each Drawdown Date
thereafter by reference to the facts and circumstances existing on
each such day, except that:-
(i) each reference to financial statements in Clause 12 shall be
construed as a reference to the then latest available financial
statements of the Borrowing Group;
(ii) those representations and warranties which are expressly stated
to relate to an earlier date or time shall be deemed repeated
only by reference to the facts and circumstances existing at
that earlier date or time;
(iii) the representations and warranties set forth in Clauses 12.13
to 12.18 inclusive will not be deemed repeated after the
Initial Drawdown Date, other than in the case of Operating
Budgets, which will be deemed made for each successive
Operating Budget on the date of delivery thereof pursuant to
this Agreement;
(iv) the representations and warranties hereunder made on the
Initial Drawdown Date shall be deemed made immediately
following the repayment of the EHE Pre-Closing Parent
Indebtedness and Indebtedness to be Refinanced (Tranche B) on
such date and after giving effect to the releases described in
Clause 4.1.1(s).
12.2 Incorporation
-------------
It, unless it is a Non-Material Subsidiary, is duly incorporated or
organised and validly existing with limited liability under the laws
of the country or other jurisdiction of its incorporation, and has the
power to own its assets and carry on its business as it is being
conducted or is proposed to be conducted.
12.3 Power and Authority
-------------------
Its organisational documents incorporate provisions which respectively
ensure, and all necessary corporate or other action has been taken to
ensure, that:-
12.3.1 it is authorised to sign or execute (if appropriate, under seal or as
a deed) and deliver each of the Finance Documents to which it is a
party and perform the transactions contemplated thereby;
12.3.2 its obligations under each of the Finance Documents rank and will at
all times rank in accordance with Clause 12.7; and
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12.3.3 each of the Finance Documents to which it is a party is admissible in
evidence in the courts of France, England, Spain and each other
jurisdiction in which it is organised or in which any of its assets
are located (subject only to payment of any stamp duty or similar
requirement identified in a relevant legal opinion delivered to or for
the benefit of the Finance Parties in connection with that Finance
Document).
12.4 Enforceability
--------------
Its obligations under each of the Finance Documents to which it is a
party constitute its legal, valid, binding and enforceable obligations
and are in full force and effect, except as limited by the
Reservations.
12.5 Authorisations and Consents
---------------------------
All consents, licences, approvals, authorisations and notifications
(whether corporate, official or otherwise) required to be obtained or
made by it in connection with the entry into, performance, validity
and enforceability of each of the Finance Documents to which it is a
party have been unconditionally obtained and are in full force and
effect.
12.6 No Contravention
----------------
Neither the signing (or other mode of execution) and delivery of any
of the Finance Documents nor the performance of any of the
transactions contemplated therein or of any of its obligations
thereunder do now or will:-
12.6.1 conflict with its organisational documents; or
12.6.2 contravene or constitute a default under or otherwise result in a
conflict with any material provision contained in any agreement,
instrument, law, regulation, judgment, order, licence, permit or
consent in effect on the Initial Drawdown Date by which it or any of
its assets is bound or affected; or
12.6.3 cause a breach of any limitation on it or the powers of its directors
or other officers, whether imposed by or contained in its
organisational documents or in any law, order or judgment in effect on
the Initial Drawdown Date to which it is subject or any agreement or
instrument by which it or any of its assets is bound or affected.
12.7 Ranking
-------
Its Financial Indebtedness evidenced by the Finance Documents to which
it is a party, to the extent not secured by any Security Interest,
ranks and will continue to rank at all times at least pari passu with
---- -----
all of its unsecured unsubordinated liabilities, subject only to such
liabilities as are given priority by mandatory application of law (but
not including liabilities evidenced by Spanish escrituras publicas or
polizas intervenidas coming into existence prior to the date on which
this Agreement becomes an escritura publica under Spanish law which
are not permitted hereunder to comprise any part of the Continuing
Indebtedness, other than the Tudor Convertible Bonds held by Banesto).
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12.8 No Defaults and Tax Liabilities
-------------------------------
12.8.1 Unless notified to the Agent under Clause 13.3.1, no Event of Default
or Potential Event of Default has occurred and is continuing and no
event has occurred (which has not been remedied or waived) which
constitutes a default under or in respect of any agreement,
instrument, deed or document to which it is a party or by which it or
any of its assets may be bound or affected being a default which will
or can be reasonably expected to have a Material Adverse Effect, and
no event has occurred (which has not been remedied or waived) which,
with the giving of notice which may validly be given and/or the lapse
of any grace period and/or giving of any certificate or statement
which may validly be given and/or making of any determination which
may validly be made and/or fulfilment of any other condition (which
notice, grace period, certificate, statement, determination or
condition is in any case specified or referred to in the relevant
agreement, instrument, deed or document), will constitute any such
default which will or can be reasonably expected to have a Material
Adverse Effect.
12.8.2 No claims are being or are reasonably likely to be asserted against it
with respect to Taxes which would be reasonably likely to have a
Material Adverse Effect.
12.9 Indebtedness and Security Interests
-----------------------------------
It has no Financial Indebtedness other than Permitted Indebtedness,
and no Security Interest (or agreement to create the same) exists on
or over its assets other than Permitted Security Interests and
Security Interests in favour of the Security Agent and/or the Finance
Parties pursuant to the Security Documents.
12.10 Ownership of Assets, Licences and Agreements for Business Operations;
---------------------------------------------------------------------
Intellectual Property
---------------------
12.10.1 It has good title to or valid leasehold or other valid right to use
all its material assets (other than Intellectual Property) to the
extent required to conduct the Business or the part thereof which it
conducts.
12.10.2 Except with respect to Environmental Licences (which are addressed by
Section 12.17 hereof), all licences, consents and authorisations have
been obtained which are necessary for the carrying on of its Business
or the part thereof which it conducts and all such licences, consents
and authorisations are in full force and effect, and there are no
circumstances known to it which indicate that any of such licences,
consents and authorisations is reasonably likely to be revoked or
varied or amended in whole or in part, except to the extent that the
absence, non-effectiveness, revocation, variation or amendment of any
such license, consent or authorisation would not have, and would not
be reasonably likely to have, a Material Adverse Effect.
12.10.3 Except in any case in this Clause 12.10.3 where the facts or
circumstances causing the inaccuracy of a particular representation
have not had and would not be reasonably likely to have a Material
Adverse Effect the Borrowing Group owns or has licensed to it all
Intellectual Property rights required to conduct the Business, and the
Relevant Intellectual Property:-
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(i) is beneficially owned by or validly licensed to a member of the
Borrowing Group, is free from any licences to third parties and
Security Interests, and will not be adversely affected by the
transactions contemplated by this Agreement;
(ii) has not lapsed or been cancelled and all steps have been taken
to protect and maintain the Relevant Intellectual Property
including paying renewal fees where appropriate; and
(iii) does not infringe any intellectual property rights of any
nature of any third party.
12.11 Accounts
--------
12.11.1 The consolidated financial statements of the Borrowing Group most
recently delivered to the Agent pursuant to Clause 4.1.1 or 13.3.4, as
the case may be:-
(a) have been prepared in accordance with the relevant Approved
Accounting Principles consistently applied, except to the extent
specified therein;
(b) in the case of such financial statements for:-
(i) EHE or CEAC, are reguliers et sinceres and give une image
fidele of the consolidated financial condition of the
Borrowing Group or CEAC Group, respectively, as at the
date to which they were drawn up;
(ii) Euro Exide, give a true and fair view of the consolidated
financial condition of the Euro Exide Group as at the date
to which they were drawn up; and
(iii) Tudor, fairly and adequately represent the financial
condition and the net worth (la situacion financiera y el
patrimonio) of the consolidated Tudor Group as at the date
to which they were drawn up;
and in each case set forth all material actual or contingent
liabilities then existing required to be set forth therein in
accordance with the relevant Approved Accounting Principles
consistently applied;
subject in the case of any unaudited interim financial statements, to
changes resulting from audit and normal year-end adjustments.
12.12 Bankruptcy, Suspension of Payments and Related Matters
------------------------------------------------------
12.12.1 It has not taken any action nor (so far as it is aware having made all
due enquiry) have any steps been taken or legal proceedings been
started against it for winding-up, dissolution or re-organisation
(including a suspension de pagos or quiebra), the enforcement of any
Security Interest over its assets or for the appointment of a
receiver, administrative receiver, or administrator, trustee or
similar officer of it or of any or all of its assets or any other
procedure under
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which it obtains protection from any of its creditors, or any
analogous proceedings in any relevant jurisdiction.
12.12.2 As at the Initial Drawdown Date, immediately prior to each Drawdown
and immediately following any incurrence of Permitted Assumed Debt
(unless it is a Non-Material Subsidiary), it will be solvent within
the definition of any law applicable to it which requires as a
condition to the validity (and/or non-voidability) of financial
obligations undertaken, or Security Interest granted, by it that it be
solvent.
12.13 Accountants' Report; Business Plan; Operating Budget
----------------------------------------------------
In relation to the Accountants' Report:-
(i) all factual information contained in the Accountants' Report
was, at the date of the report, true and accurate in all
material respects; and
(ii) all assumptions and presumptions contained in the Accountants'
Report (on the consolidated basis contemplated in the
Accountants' Report) attributable to any member of the
Borrowing Group were reasonable at the time they were made and
in relation to the period in respect of which they were made.
In relation to the Business Plan and the Operating Budget:-
(a) all factual information contained in or utilised for the purpose
thereof was, at the date thereof, true and accurate in all
material respects and nothing has occurred since the date thereof
which renders any factual statement contained therein or so
utilised misleading in any material respect;
(b) all assumptions and presumptions made for the purpose thereof
were fair and reasonable at the time they were made and in
relation to the period in respect of which they were made and so
far as any Borrower is aware (after having made all due enquiry)
nothing has occurred since the date thereof which makes it
necessary to change the consolidated forecasts, projections and
estimates set out therein in any material respect; and
(c) all forecasts, projections and estimates taken on a consolidated
basis contained or referred to in the Business Plan and the
Operating Budget and all assumptions and presumptions upon the
basis of which the same were made, at the time they were made
were, to its best knowledge, fair and reasonable and, so far as
any Borrower is aware (after having made all due enquiry),
nothing has occurred since the date thereof which makes it
necessary to change any of those forecasts, projections and
estimates in any material respect.
12.14 Environmental Report and the Environmental Budget
-------------------------------------------------
In relation to the Environmental Report and the Environmental Budget,
(a) to the best knowledge of the Lead Borrowers after due inquiry all
factual
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information contained in the Environmental Report and the
Environmental Budget was, at the date of such report, true and
accurate in all material respects and nothing has occurred since the
date of such report which renders any factual statement therein
misleading in any material respect, and (b) all forecasts, projections
and estimates contained or referred to in the Environmental Report and
the Environmental Budget and all assumptions and presumptions upon the
basis of which the same were made, at the time there were made were
fair and reasonable and, so far as the Borrowers are aware (after
having made all due enquiry), nothing has occurred since the date
thereof which makes it necessary to change any of those forecasts,
projections and estimates in any material respect.
12.15 No Material Adverse Effect
--------------------------
No event or matter having or likely to have a Material Adverse Effect
has occurred since 31st December 1994 to and including the Initial
Drawdown Date.
12.16 Litigation
----------
No litigation, arbitration or administrative proceeding to which it is
party is current or pending or, so far as it is aware, threatened
against it nor is there subsisting any unsatisfied judgement or award
given against it by any court, board of arbitration or other body,
which is reasonably likely to result in liability to any member of the
Borrowing Group which has a Material Adverse Effect.
12.17 Environmental Warranties
------------------------
12.17.1 No Environmental Event has occurred at any time in relation to any
site now or previously owned or occupied by any Borrower, Guarantor or
any of their respective subsidiaries which is reasonably likely to
have a Material Adverse Effect.
12.17.2 It has obtained and is, and has at all times been, in substantial
compliance with all Environmental Licences necessary in connection
with the ownership and operation of its facilities and business as
currently owned and operated or if there is or has been any failure to
so obtain or any non-compliance with such Environmental Licences such
failure or non-compliance is not reasonably likely to have a Material
Adverse Effect.
12.17.3 No circumstances exist which may reasonably be expected to prevent or
interfere with any Borrower, Guarantor or any of their respective
subsidiaries obtaining or being in substantial compliance with any
Environmental Licences in the future so as to give rise to a Material
Adverse Effect.
12.17.4 On the basis of its ongoing reviews which identify and evaluate
liabilities and costs relating to Environmental Law, it has reasonably
concluded that the application of any Environmental Law to it or any
of its subsidiaries is not reasonably likely to have any Material
Adverse Effect.
12.17.5 Its operations, and the operations of its subsidiaries, are, and at
all times have been, in full compliance with all Environmental Law or
if there is any non-
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compliance with Environmental Laws, such non-compliance is not
reasonably likely to have a Material Adverse Effect. No circumstances
exist which currently are known or ought reasonably to be known by it
which may reasonably be expected to prevent or interfere with any
Borrower, Guarantor or any of their respective subsidiaries being in
full compliance with any Environmental Laws in the future so as to
give rise to a Material Adverse Effect.
12.18 Group Structure and Assets and Turnover
---------------------------------------
The structure of the Borrowing Group on the Initial Drawdown Date is
as set out in Schedule 5, and on the date of this Agreement the
Borrowers will have no other subsidiaries except as set forth therein.
Schedule 5 includes details of all companies, partnerships, joint
ventures and other entities in which any member of the Borrowing Group
has an interest in excess of ten per cent (10%) of the aggregate of
all voting shares or equivalent interests then in issue, and the
percentage of such shares or equivalent interests held by the members
of the Borrowing Group. The identity of each Non-Material Subsidiary
on the date of this Agreement is separately listed on Schedule 5. The
Assets of each subsidiary of CEAC, Tudor and Euro Exide as of 31st
August, 1995, the turnover of each subsidiary of CEAC and Tudor for
the period ended 31st December, 1994 and the turnover of each
subsidiary of Euro Exide for the period ended 31st March, 1995,
together with the percentage such Assets and turnover represent of the
consolidated Assets and turnover of the Borrowing Group for such
dates, is as set out in Schedule 14.
12.19 Margin Stock
------------
Neither it, nor any of its subsidiaries, is engaged principally, or as
one of its important activities, in the business of extending credit
for the purpose of purchasing or carrying any Margin Stock.
12.20 Labour Law and Employee Benefit Plans
-------------------------------------
It has complied with all applicable labour and social security laws
and instituted all employee benefit plans legally necessary; these
plans in place are in full force and effect and each such plan is
fully funded to meet its expected obligations as they come due except
for such failure to fund, the liability as to which is not reasonably
likely to have a Material Adverse Effect.
13. UNDERTAKINGS
------------
13.1 Duration of Undertakings
------------------------
Each Borrower undertakes to each of the Finance Parties in the terms
of the provisions of Clauses 13.2 to 13.4 inclusive (except to the
extent that any of such undertakings is stated to be made only by one
or more specific members of the Borrowing Group, in which case such
undertaking shall be construed as being made only by such member or
members), CEAC and each Obligor that is a member of the Initial CEAC
Group undertakes to each of the Finance Parties in the terms of the
provisions of Clause 13.5, Tudor and each of its subsidiaries
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undertake to each of the Finance Parties in the terms of the
provisions of Clause 13.6, EHE undertakes to each of the Finance
Parties in the terms of the provisions of Clause 13.7 and CEAC and
Euro Exide undertake to each of the Finance Parties in the terms of
the provisions of Clause 13.8, all such undertakings to continue until
the liabilities and obligations under each of the Finance Documents
have been finally discharged and no Finance Party has any obligation
to lend hereunder, unless in any case the Agent (acting on the
instructions of the Majority Lenders) agrees otherwise. All
undertakings set forth in this Clause 13 are cumulative such that, if
more than one set of such undertakings are given by an Obligor, such
Obligor shall be bound by the aggregate of all restrictions set forth
in the undertakings given by it.
13.2 General Undertakings
--------------------
13.2.1 Use of Proceeds
---------------
It will use the proceeds of Advances only for the purposes specified
in Clause 2.2 and, in the case of such proceeds advanced by it to any
other person, will procure that such proceeds are used for such
purposes.
13.2.2 Authorisations and Consents
---------------------------
It will, and will procure that each of its subsidiaries will, obtain
and promptly renew from time to time and maintain in full force and
effect all such authorisations, approvals, consents, licences and
exemptions, and promptly make and renew from time to time all such
filings and registrations, as may be required under any applicable law
or regulation (i) to enable it to perform its material obligations
under each of the Finance Documents and (ii) for the validity and
enforceability thereof, subject to the Reservations.
13.2.3 Change of Business
------------------
It will not, and will procure that each of its subsidiaries will not,
engage in any material business other than the Business or any
business reasonably incidental thereto.
13.2.4 Maintenance of Status and Authorisations, Title to Assets
---------------------------------------------------------
It will, and will procure that each of its Material Subsidiaries
will:-
(a) do all such things as are necessary to maintain their respective
legal existences, except that any two or more subsidiaries of
CEAC, Tudor and/or Euro Exide may consolidate or merge with one
another, in each case in accordance with Clause 13.2.9, and
except further that the cessation of the existence of a person
that has ceased its business in a manner not prohibited by Clause
14.1.11 (taking into account the provisions of Clause 14.2) shall
not constitute a violation of this Clause 13.2.4(a);
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(b) ensure that it and each of them has the right and is duly
qualified to conduct their respective business as conducted in
all applicable jurisdictions, and obtain and maintain all
licences, consents, authorisations, franchises, intellectual
property and other rights necessary for the preservation and
operation of such businesses in all material respects, except to
the extent that the absence of any such right or qualification,
or the non-existence or non-maintenance of such licences,
consents, authorisations, franchises, property or rights, would
not have, and would not be reasonably likely to have, a Material
Adverse Effect; and
(c) comply in all material respects with all laws, regulations,
judgements, orders, licenses, permits or consents binding upon
it, except where non-compliance would not have, and would not be
reasonably likely to have, a Material Adverse Effect.
13.2.5 Commercial Terms Transactions
-----------------------------
It will not enter into, and will procure that each of its subsidiaries
does not enter into, any arrangement or transaction other than
substantially on commercial terms.
13.2.6 Insurances
----------
It will:-
(a) maintain and will procure that each of its subsidiaries maintains
in full force and effect adequate insurance (including, without
limitation, employer's and public liability insurance and
business interruption/loss of profits insurance) in relation to
its and their respective assets and businesses against all such
risks as are normally insured against by other companies (whose
practice is not to self-insure except in connection with
reasonable excesses) owning or possessing similar assets or
carrying on similar businesses in an amount, to the extent
reasonably possible, equal to the full replacement cost of such
assets (after allowing for any decrease in value of such assets
as a result of normal wear and tear in the case of plant and
machinery and related assets), in respect of its or their
respective businesses, except where its failure to do so will not
have a Material Adverse Effect; and
(b) supply copies of all such policies if so requested by the Agent.
13.2.7 Taxes
-----
It will pay within any permitted period, and will procure that each of
its subsidiaries pays within any permitted period, all material Taxes
imposed upon it or any of them or any of its or their assets, income
or profits or any transactions undertaken or entered into by it or any
of them (other than such Taxes as are being contested in good faith by
appropriate proceedings, pending determination of which payment may
lawfully be withheld, in respect of which
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Taxes there shall be set aside adequate reserves in accordance with
Approved Accounting Principles).
13.2.8 Disposals
---------
It will not, and will procure that its subsidiaries will not (whether
by a single transaction or a number of related or unrelated
transactions and whether at the same time or over a period of time)
sell, transfer or otherwise dispose of any of its assets (including
shares of the capital stock of any other person, or if such person is
not an incorporated entity, other ownership interests therein, and the
coverage of this undertaking is to be deemed to include any
transaction the effect of which would be to reduce the percentage of
any class of shares or interests in any person held directly or
indirectly by any Lead Borrower) or all or any part of its
undertakings, assets or revenues or any interest therein, other than:-
(a) disposals of assets in the ordinary course of trading by
Borrowers other than EHE or EF;
(b) payment of cash by Borrowers other than EHE or EF in respect of a
transaction not otherwise prohibited by this Agreement, and
exchange of cash equivalents for cash by Borrowers other than EHE
or EF;
(c) the exchange or prompt replacement by Borrowers other than EHE or
EF of assets for or with other assets required for its trading
activities of similar or greater value than the assets disposed
of or replaced, on arm's length commercial terms;
(d) disposals of assets by Borrowers other than EHE or EF which are
no longer required for the purposes of its business at a price
not significantly less than the market value of those assets
less, if the assets would otherwise be liquidated, the costs of
the liquidation;
(e) disposals, other than disposals of shares of or ownership
interests in an Obligor, not falling within any other paragraph
of this Clause 13.2.8 whose consideration does not exceed FF
25,000,000 in any one case and FF 125,000,000 when aggregated
with all other such disposals made by the Borrowing Group
following the Initial Drawdown date;
(f) sales by CEAC, Tudor or Euro Exide of Receivables the proceeds of
which are utilised in accordance with Clause 7.3.1, provided that
--------
the face amount of Receivables so sold shall not exceed
331/3% of the aggregate face amount of Receivables of such
Lead Borrower and its subsidiaries as of the date of (and
immediately prior to) the relevant sale and provided further
----------------
that the Borrowers' Agent has provided to the Agent a certificate
substantially in the form of Schedule 7 demonstrating that, after
giving effect to such sales on a pro forma basis (and including
the face amount of such Receivables as assets and Financial
Indebtedness in determining the Gearing Ratio), the Gearing Ratio
for the Borrowing Group as of the last day of the most
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recently ended Accounting Quarter shall not be greater than
1.20:1.00;
(g) sales, transfers or other disposals by (i) a member of one
Borrowing Sub-Group to another member of that Borrowing Sub-
Group, or (ii) a member of one Borrowing Sub-Group (such group
with respect to such member being the "DISPOSING GROUP") to a
member of another Borrowing Sub-Group (such group with respect to
such member being the "ACQUIRING GROUP") in respect of which
sales, transfers or other disposals the Borrowers' Agent has
provided to the Agent a certificate substantially in the form of
Schedule 7 demonstrating that, after giving effect to such sale,
transfer or disposal on a pro forma basis, the Gearing Ratio for
such Disposing Group and for such Acquiring Group as of the date
of the relevant disposition in each case shall not be greater
than 1.25:1.00;
(h) disposals of all but not part of the shares of capital stock of
subsidiaries of Tudor provided that at the time of any such
disposal such subsidiaries have no (i) material assets other than
undeveloped land and (ii) no Financial Indebtedness under the
Finance Documents; provided that, simultaneously with receipt of
the Net Cash Proceeds arising from any such disposal for
application in accordance with Clause 7.4.1, the Agent acting on
behalf of the Lenders shall release the Guarantee of the relevant
subsidiary;
(i) sales, transfers or other disposals of shares in a member of the
Borrowing Group to EHE by one or more subsidiaries of EHE
provided the only consideration for such sale, transfer or
disposal is (x) an equity investment by EHE in such subsidiary
otherwise permitted hereby, or (y) one or more promissory notes
issued by EHE, and provided further that the following conditions
precedent to such sale, transfer or disposal are satisfied:-
(A) the jurisdiction of incorporation or organisation of
such member may not be England or Wales if, following such
sale, transfer or disposal, more than one Sub-Group Holding
Company would be incorporated or organised under the laws of
England or Wales;
(B) the Borrowers' Agent shall have delivered to the Agent
(x) a certificate substantially in the form of Schedule 7
demonstrating that, after giving effect to such sale,
transfer or disposal on a pro forma basis, the Gearing Ratio
for (x) the Borrowing Sub-Group of which such subsidiary is
a member and (y) (i) the Borrowing Sub-Group to which such
subsidiary is sold or transferred or (ii) any new Borrowing
Sub-Group arising from such sale, transfer or disposition,
as of the date of the relevant disposition in each case
shall not be greater than 1.25:1.00, and (y) a copy of
Schedule 5 hereto, updated to show all changes (including on
a pro forma basis the changes contemplated by such sale,
transfer or
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disposition) in the information set out therein from
the date of this Agreement;
(C) EHE shall have entered into a pledge agreement for such
shares in form and substance satisfactory to the Agent,
dated no later than the effective date of such sale,
transfer or other disposal, with the Security Agent on
behalf of the Lenders granting to the Security Agent in that
capacity a first priority Security Interest in such shares,
securing:-
(i) in the case of shares of members of the Borrowing
Group that are members of the Initial CEAC Group, EHE's
obligations as a Tranche A Borrower and as a Guarantor
in respect of the Tranche B Facility in an amount,
subject to Clause 3.4.2, up to the Security Reference
Amount; and
(ii) in the case of shares of other members of the
Borrowing Group, in an amount, subject to Clause 3.4.3,
up to the CNTA Adjusted Share;
(D) the member of the Borrowing Group making such sale,
transfer or disposal shall have entered into a pledge
agreement for any promissory notes issued by EHE in
connection therewith in form and substance satisfactory to
the Agent, dated no later than the effective date of such
sale, transfer or other disposal, with the Security Agent on
behalf of the Lenders, granting to the Security Agent in
that capacity a first priority Security Interest in such
promissory notes, securing obligations under the Tranche A
Facility and obligation in respect of the Tranche B Facility
in an amount, subject to Clause 3.4.2, up to the Security
Reference Amount;
(E) the Borrowers' Agent shall have delivered to the Agent
legal opinions, in form and substance satisfactory to the
Agent, addressed to the Agent and the Lenders from reputable
French counsel acceptable to the Agent and reputable counsel
acceptable to the Agent in each of the jurisdictions (x) in
which the member of the Borrowing Group making such sale,
transfer or disposal is incorporated or organised, and (y)
in which the member of the Borrowing Group subject to such
sale, transfer or disposal is incorporated or organised;
(j) the contribution by EHE to EF, solely in exchange for the
issuance to EHE of shares of equity capital of EF, of shares
of equity capital of CEAC constituting 83% of the
outstanding shares of CEAC on the date of such contribution;
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(k) disposals by (i) Tudor Holdings of all the outstanding equity
shares of Sonnak and Pakkasakku to EHE for one or more promissory
notes aggregating not more than USD 32,000,000 or its equivalent
amount in other currencies, or a subscription by EHE to equity
shares in Tudor Holdings otherwise permitted hereby, and (ii)
Manos of all the outstanding equity shares of Tudor AB to EHE for
the EHE Subsidiary Note; provided in the case of sub-clause (i)
--------
of this sub-clause (k) that:-
(A) all outstanding shares of Tudor Holdings are pledged by
Manos pursuant to the Security Document identified in sub-clause
(xiv) of the definition thereof, such pledge to remain in effect
until Tudor Holdings is liquidated as contemplated by sub-clause
(C) below;
(B) as from the Third Amendment Effective Date and for all
periods thereafter until the completion of such liquidation,
Tudor Holdings shall have no Financial Indebtedness;
(C) Manos shall cause Tudor Holdings to be liquidated promptly
after the Third Amendment Effective Date (and in any event before
the lapse of nine months following the Third Amendment Effective
Date); and
(D) the notes referred to in sub-clause (i) of this sub-clause
(k) shall be transferred to Manos in connection with such
liquidation, and within thirty days of such transfer Manos
shall:-
(x) pledge such notes to the Security Agent on behalf of
the Lenders, pursuant to documentation satisfactory to the
Security Agent granting a perfected first priority Security
Interest in such notes, to secure the maximum amount of
obligations under the Finance Documents permitted under the
Indentures and applicable law, and
(y) deliver to the Security Agent one or more opinions in
form, substance and scope satisfactory to the Security Agent
as to the perfection and priority of such Security Interest;
(l) the sale by EHE of equity shares of the Parent (such shares
having been contributed to EHE by the Parent in exchange for the
issuance of shares by EHE) to CEAC in exchange for a promissory
note issued on the Third Amendment Effective Date in the original
principal amount of not more than FF 86,239,212.05 or its
equivalent amount in other currencies, which promissory
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note is repaid in full and canceled on or about the Third
Amendment Effective Date;
(m) the sale by EHE of the shares of Pakkasaku and Snnak to Tudor AB
and/or one or more subsidiaries of Tudor AB solely in exchange
for additional equity shares in Tudor AB and/or the issuance by
Tudor AB of one or more promissory notes to EHE, in which
promissory notes the Security Agent is granted, on behalf of the
Lenders, a first priority Security Interest in such notes
securing an amount up to the Security Reference Amount pursuant
to documentation satisfactory to the Security Agent;
Except as permitted by sub-clause (c), (g), (i), (j), (k), (l) or (m)
above, no disposal permitted hereunder will be made other than for a
cash consideration payable on or before completion on terms that the
purchaser thereof does not obtain title or possession to any asset the
subject of such disposal prior to completion of such disposal and
payment of the whole consideration therefor;
provided that such consideration may take the form of promissory
--------
notes in an aggregate principal amount outstanding to the Borrowing
Group at any one time of not more than FF 25,000,000.
13.2.9 Merger, Consolidation, Etc.
---------------------------
It will not, and will procure that its subsidiaries do not, merge or
consolidate with any other person (whether by winding-up, dissolution
or other means) except that, subject to the proviso set out below,
(a) two or more members of a Borrowing Sub-Group may consolidate or
merge with one another,
(b) two or more members of the Borrowing Group (other than EHE or EF)
may consolidate with one another where such consolidation or
merger is not described in the preceding clause (a) of this
Clause 13.2.9, provided the Borrowers' Agent has provided to the
--------
Agent a certificate substantially in the form of Schedule 7
demonstrating that, after giving effect to such consolidation or
merger on a pro forma basis the Gearing Ratio for each of the
Borrowing Sub-Groups (to the extent relevant) shall not be
greater than 1.25:1.00, and
(c) EHE may merge into Exide Holdings Europe S.A. provided that
--------
immediately prior to the effective time of such merger, Exide
Holdings Europe S.A. shall have no material assets and no
liabilities;
in each case provided the Agent shall have received legal opinions in
respect of the relevant merger or consolidation in form and substance
reasonably satisfactory to it, which legal opinions shall, in any
event, confirm that none of the material rights of any Finance Party
or the material obligations and liabilities to any Finance Party of
any of the companies in the Borrowing Group will, after such merger or
consolidation, cease to be in full force and effect and that the
person surviving or resulting from such merger or consolidation is
bound under the Finance Documents after giving effect to such merger
or consolidation to the
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same extent as the other person or persons party to such transaction
were bound immediately prior thereto.
13.2.10 Negative Pledge
---------------
It will not, and will procure that its subsidiaries will not, create
or have outstanding any Security Interest on or over its respective
assets, except for (i) with respect to all assets other than
intercompany notes and shares of the capital stock of its
subsidiaries, Permitted Security Interests and (ii) with respect to
intercompany notes and shares of the capital stock of its
subsidiaries, the Security Interests created in favour of the Security
Agent pursuant to the terms of the Security Documents.
13.2.11 Indebtedness
------------
Each of the Lead Borrowers, other than EHE, will not, and will procure
that i ts subsidiaries will not, incur or permit to exist any
Financial Indebtedness other than Permitted Indebtedness. EHE will not
incur or permit to exist any Financial Indebtedness, other than
Financial Indebtedness under the Finance Documents, EHE Post-Closing
Indebtedness, Financial Indebtedness under Interest Rate Agreements
meeting the requirements of Clause 13.2.21, Financial Indebtedness of
EHE to the Parent which is both (i) incurred by EHE solely to purchase
equity shares in the Parent, which shares are sold by EHE to CEAC as
contemplated by sub-clause (l) of Clause 13.2.8, and (ii) contributed,
on or about the Third Amendment Effective Date, by the Parent to EHE
in exchange for the issuance of equity securities of EHE, Financial
Indebtedness of EHE to its subsidiaries complying with the terms of
Clause 13.2.8(i) and incurred solely to purchase from such
subsidiaries 100% of the equity shares, owned beneficially by the
Borrowing Group, of other existing members of the Borrowing Group, and
Financial Indebtedness of EHE to Tudor Holdings or Manos described in
Clause 13.2.8(k).
13.2.12 Loans, Etc.
-----------
It will not, and will procure that its subsidiaries will not, make any
loans or grant any credit to any person or make any other similar
arrangement other than (i) loans to directors or employees which,
together with all such loans made by other members of the Borrowing
Group, do not exceed a maximum aggregate amount of FF 20,000,000 or
the Equivalent Amount outstanding at any time for the entire Borrowing
Group, (ii) trade credit granted in the ordinary course of its trading
business, (iii) loans of proceeds of Cash Advances to the extent
permitted by Clause 2.2, (iv) loans to all material terms of which the
Agent (acting upon the instructions of the Majority Lenders) has
consented, (v) loans to governmental agencies and instrumentalities
required under applicable law, (vi) so long as any Exide Notes remain
outstanding and without prejudice to any other provision in this
Agreement (including without limitation Clauses 13.5(e) and
14.1.19(b)(i)), loans or credits granted by a member of the Borrowing
Group to the Parent or any of its Restricted Subsidiaries (as defined
in each of the Indentures), (vii) loans or credits granted by one
member of a Borrowing Sub-Group to another member of a Borrowing Sub-
Group and (viii) loans or credits granted by one member of the
Borrowing Group to another member of the Borrowing Group, other than
as permitted by clause (vii) hereof, provided that,
--------
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after giving effect to such loan or credit on a pro forma basis, the
Gearing Ratio for each Borrowing Sub-Group (to the extent relevant)
shall not be greater than 1.25:1.00.
13.2.13 Acquisitions of Subsidiaries or Businesses
------------------------------------------
It will not, and will procure that its subsidiaries will not, acquire
(i) any subsidiary which is not a Lead Borrower or a subsidiary of a
Lead Borrower as at the date of this Agreement, (ii) any shares of any
member of the Borrowing Group from any person that is not a member of
the Borrowing Group, or (iii) any business, or enter into any
agreement under which it may be or become bound to acquire any such
subsidiary, shares or business other than the acquisition of any
subsidiaries, shares or businesses:
(i) described in Clause 13.2.8(g); or
(ii) in respect of which both the aggregate consideration (paid and
payable by the persons in the Borrowing Group) in any calendar
year may not exceed FF 40,000,000 or the Equivalent Amount in
any one calendar year or 3% of the Net Worth of the Borrowing
Group determined as of the last day of the Accounting Reference
Period immediately preceding the date of an acquisition for all
such acquisitions following the date of this Agreement, and the
---
aggregate gross liabilities of such subsidiaries or businesses
shall in no case exceed twice the aggregate consideration (paid
and payable by persons in the Borrowing Group) to acquire such
subsidiary or business; provided that nothing in this Clause
13.2.13 shall permit the acquisition by any member of the
Borrowing Group other than EHE of any shares of or other equity
interests in EHE; or
(iii) described in sub-clause (xiii) of the definition of "Permitted
Investment" herein.
13.2.14 Capital Expenditures
--------------------
(a) The Borrowers shall procure that the Capital Expenditures
(determined in accordance with EHE Approved Accounting
Principles) of the Borrowing Group in each Accounting Reference
Period ending after the date of this Agreement not exceed the
amount set forth in respect thereof in the Business Plan;
provided that for any Accounting Reference Period of less than
twelve months, the permitted amount of Capital Expenditures
shall be pro-rated accordingly.
(b) Without prejudice to the other terms of this Agreement, upon
each disposal of a business or company (or a material part of
either), the amount specified in Clause 13.2.14(a) shall be
automatically reduced by the amount (if any) reasonably
determined by the Agent to be attributable to that business,
company or part thereof.
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(c) Notwithstanding the foregoing, to the extent that the actual
Capital Expenditures (as so calculated) during any Accounting
Reference Period are less than the amount set forth for such
Accounting Reference Period above, 100% of such unused amount
shall be added to the amount of permitted Capital Expenditures in
the immediately succeeding year subject to no Event of Default
having occurred and being continuing at the time of a proposed
usage of all or any part of such unused amount in such succeeding
year.
13.2.15 Supply Agreements
-----------------
CEAC will, and will procure that each of its subsidiaries will, at
their own cost and expense take all reasonable steps to preserve and
enforce available rights and remedies in respect of the Supply
Agreements or any breach thereof, maintain in full force and effect
(subject to rights of termination exercisable by the other party or
parties thereto not arising from the relevant Obligor's (or its
subsidiaries') actions or omissions) and during their term comply with
the terms of the Supply Agreements to which they are parties, in all
material respects, and not agree to any waiver of any material term of
or to any material amendment or variation of the terms of the Supply
Agreements except, in each case, to the extent that the failure to
perform or observe any of the undertakings set forth in this Clause
13.2.15 is not reasonably likely to have a Material Adverse Effect.
13.2.16 Environmental Obligations
-------------------------
(a) It will, and will procure that each of its subsidiaries will, (i)
comply with the terms of all Environmental Licenses applicable to
it or any of its subsidiaries and with all Environmental Laws
applicable to ownership or use of its Real Property now or
hereafter owned or operated by it or any of its subsidiaries,
(ii) promptly pay or cause to be paid all costs and expenses
incurred in such compliance and (iii) keep or cause to be kept
all such Real Property free and clear of any Security Interests
imposed pursuant to such Environmental Laws for such period as
such Real Property is owned or operated by it or any of its
subsidiaries, except for such non-compliances, failures to pay or
Security Interests which individually or in the aggregate would
not reasonably be expected to have a Material Adverse Effect.
(b) It will not, and will procure that each of its subsidiaries will
not, generate, use, treat, store, release or dispose of, or
permit the generation, use, treatment, storage, release or
disposal of Dangerous Substances on any Real Property now or
hereafter owned or operated by it or any of its subsidiaries, or
transport or permit the transportation of Dangerous Substances to
or from any such Real Property except for Dangerous Substances
used or stored at, or transported from, any such Real Properties
in compliance with all applicable Environmental Laws and used in
connection with the operation, use and maintenance of any such
Real Property, except such non-compliances as would not
reasonably be expected to have a Material Adverse Effect.
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(c) At the written request of any Agent or the Majority Lenders,
which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, it will provide, at
the Borrowers' sole cost and expense, an environmental site
assessment report and compliance audit concerning any Real
Property, prepared by an environmental consulting firm approved
by the Agent addressing the matters in sub-clause (i), (ii) or
(iii) below of this Clause 13.2.16(c) which gives rise to such
request and estimating the range of the potential costs of any
removal, remedial or other corrective action in connection with
any such matter, provided that in no event shall such request be
made unless (i) an Event of Default has occurred and is
continuing, (ii) the Lenders receive notice under Clauses
13.2.16(d) or 13.2.16(e) for any event for which notice is
required to be delivered for any such Real Property or (iii) the
Agent or the Majority Lenders reasonably believe that there was a
breach of any representation, warranty or covenant contained in
Clause 12.17, 13.2.16(a) or 13.2.16(b). If the Borrowers fail to
provide the same within ninety (90) days after such request was
made, the Agent may order the same, and the Obligors shall grant
and hereby grant to each of the Agent and the Lenders and their
agents access to such Real Property and specifically grant the
Agent and the Lenders an irrevocable non-exclusive license,
subject to the rights of tenants, to undertake such an assessment
all at the expense of the Borrowers.
(d) Promptly upon, and in any event within five Business Days after,
an officer or director of a member of the Borrowing Group
obtaining knowledge thereof, written notice of any of the
following matters (including all reasonably related claims or
liabilities) which could reasonably be expected to result in a
remedial cost to the Borrowing Group in excess of FF 25,000,000
shall be delivered to the Lenders:-
(i) any pending or threatened Environmental Claim against any
member of the Borrowing Group (including any such claim
arising out of the ownership or operation by a member, or
any predecessor-in-interest thereto, of the Borrowing Group
of any Real Property then no longer owned by a member of the
Borrowing Group) or any Real Property then owned or operated
by a member of the Borrowing Group and any pending or
threatened suspension, revocation or material modification
of any Environmental Licence applicable to a member of the
Borrowing Group (including any threatened closure or
shutdown of all or any part of a facility owned or operated
by any member of the Borrowing Group);
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by a member of the Borrowing
Group that (x) results in material noncompliance by a member
of the Borrowing Group with any applicable Environmental Law
or (y) could reasonably be expected to form the basis of an
Environmental Claim against a member, or any
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predecessor-in-interest thereto, of the Borrowing Group
(including any such claim arising out of the ownership or
operation by a member of the Borrowing Group of any Real
Property then no longer owned by a member of the Borrowing
Group) or any Real Property then owned by a member of the
Borrowing Group;
(iii) any condition or occurrence on any Real Property owned or
operated by a member of the Borrowing Group that could
reasonably be expected to cause such Real Property to be
subject to any restrictions on the ownership, occupancy,
use or transferability by a member of the Borrowing Group
of such Real Property under any Environmental Law;
(iv) the taking of any removal or remedial action in response to
the actual or alleged presence of any Dangerous Substances
on any Real Property owned or operated by a member, or any
predecessor-in-interest thereto, of the Borrowing Group as
required by any Environmental Law or any governmental or
other administrative agency; and
(v) any change or addition to any applicable Environmental Law
the effect of which change or addition is reasonably likely
to have a Material Adverse Effect.
All such notices shall describe in reasonable detail the nature
of the claim, investigation, condition, occurrence or removal or
remedial action and the relevant member of the Borrowing Group's
response thereto. In addition, the Borrower's Agent will provide
the Lenders with copies of such detailed reports of any
Environmental Claim as may reasonably be requested by the
Majority Lenders. In addition, promptly upon receiving written
notice of the entry of any Real Property (or any property with
respect to which it or any of its subsidiaries has liability or
potential liability) on any register or database maintained by
any Governmental Authority or like authority for those properties
deemed contaminated with Dangerous Substances including, without
limitation, a "black spots" list, inform the Agent of the entry
where the entry has or is reasonably likely to have a Material
Adverse Effect.
(e) It will, and will procure that each of its subsidiaries will,
undertake a suitable site assessment of the Environmental status of
any material real property (or any material interest therein) or any
company in which it intends or they intend to acquire a majority
interest (which assessments shall include, but not be limited to, a
written environmental site assessment prepared by a reputable
environmental consultant for real property or interests therein
acquired or held by any company to be acquired), provided it is so
permitted by the then owner of such real property, and will notify the
Agent of the results of such assessment.
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13.2.17 Intellectual Property
---------------------
It will, and will procure that each of its subsidiaries will, to the
extent reasonably practicable in carrying on their respective
businesses:-
(a) observe and comply with all material obligations and laws to
which it in its capacity as registered proprietor, beneficial
owner, user, licensor or licensee of the Relevant Intellectual
Property or any part thereof is subject, except to the extent
that the failure to observe and comply with such obligations and
laws does not and is not reasonably likely to have a Material
Adverse Effect;
(b) do all acts as are reasonably practicable to maintain, protect
and safeguard the Relevant Intellectual Property and not
discontinue the use of any of the Relevant Intellectual Property
nor allow it to be used in such a way that it is put at risk by
becoming generic or by being identified as disreputable in any
material way, except to the extent that the failure to do such
acts does not and is not reasonably likely have a Material
Adverse Effect;
(c) duly register in such register(s) or with such authorities as may
be available for the purpose and in such name(s) as may be
required by the law and practice of the place of registration
such of the Relevant Intellectual Property and all assignments,
licences and mortgages thereof as may be capable of registration
in such place(s), except to the extent that the failure to so
register any thereof does not and is not reasonably likely to
have a Material Adverse Effect;
(d) pay all fees necessary to maintain, protect and safeguard the
Relevant Intellectual Property and the registrations required to
be made under Clause 13.2.17(c) before the latest time provided
for payment thereof, except to the extent that the failure to
make any such payments does not and is not reasonably likely to
have a Material Adverse Effect;
(e) take all such reasonable steps, including the commencement of
legal proceedings, as may be necessary to safeguard and maintain
the validity, reputation, integrity, registration or subsistence
of the Relevant Intellectual Property, except to the extent that
the failure to take such steps does not and is not reasonably
likely to have a Material Adverse Effect;
(f) not change the specification referred to in any registration of
any Relevant Intellectual Property or permit any disclaimer,
condition, restriction, memorandum or other thing to be entered
on the registration of any of the trade marks comprised within
the Relevant Intellectual Property the effect of which will be to
affect the value of such trade marks, except to the extent that
such changes and entries do not and are not reasonably likely to
have a Material Adverse Effect;
(g) not assign, sever, dispose of or otherwise part with control of
the Relevant Intellectual Property, create or permit to subsist
any Security Interest therein or grant any licence to any person
to use the same in any manner which will affect the value of such
Relevant Intellectual Property, except
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to such extent as does not and is not reasonably likely to have a
Material Adverse Effect;
(h) maintain comprehensive, detailed and up-to-date records of all
Relevant Intellectual Property (including details of agents
engaged in relation to registrations thereof); and
(i) as and when reasonably requested by the Agent, promptly provide
the Agent with a copy of the record described in Clause
13.2.17(h) and/or a written summary of all Relevant Intellectual
Property created or acquired since the date of this Agreement or
the date of the last notification, as the Agent may request.
13.2.18 Investments; limitation on cash and cash equivalent holdings by
---------------------------------------------------------------
subsidiaries
------------
It will not, and will procure that its subsidiaries will not, own any
interest in any share, equity related investment or investment
security other than Permitted Investments.
13.2.19 No Subordination
----------------
It will not, and will procure that its subsidiaries will not, permit
any Financial Indebtedness or other obligation owed by it to another
member of the Borrowing Group, or to it by another member of the
Borrowing Group, to be contractually subordinated to any other
obligations.
13.2.20 Additional Guarantors
---------------------
It will procure that:-
(a) on or before the later of (x) the 90th day after the date of this
Agreement and the (y) 60th day after the Initial Drawdown Date,
Centra S.A., a Polish company, executes and delivers to the Agent
a Deed of Accession, each of the documents described in Clauses
4.1.1(a) and (d) relevant to it and such other documents as the
Agent may reasonably request in order that such company may
accede as a Guarantor to this Agreement and be under all of the
liabilities and obligations expressed to be assumed by it under
such Deed of Accession and this Agreement on such date;
(b) on or before 31st January, 1996, Industria Composizioni Stampate
S.P.A., an Italian company, executes and delivers to the Agent a
Deed of Accession and each of the documents described in Clauses
4.1.1(a) and (d) relevant to it in order that such company may
accede as a Guarantor to this Agreement and be under all of the
liabilities and obligations expressed to be assumed by it under
such Deed of Accession and this Agreement on such date;
(c) on or before the 30th day after the first date on which the
Borrowing Group's percentage equity ownership of Sonnenschein
exceeds 75%, Sonnenschein executes and delivers to the Agent a
Deed of Accession and
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each of the documents described in Clauses 4.1.1(a) and (d)
relevant to it in order that Sonnenschein may accede as a
Guarantor to this Agreement and be under all of the liabilities
and obligations expressed to be assumed by it under such Deed of
Accession and this Agreement on such date;
(d) on or before the 15th day after the date on which Hagen A.G., a
German company, is converted from an Aktiengesellschaft to a
Gesellschaft mit beschrankter Haftung, Hagen A.G. executes and
delivers to the Agent a Deed of Accession and each of the
documents described in Clauses 4.1.1(a) and (d) relevant to it in
order that Hagen A.G. may accede as a Guarantor to this Agreement
and be under all of the liabilities and obligations expressed to
be assumed by it under such Deed of Accession and this Agreement
on such date; and
(e) each of its subsidiaries which either after the date of this
Agreement becomes a Material Subsidiary (an "Existing Material
-----------------
Subsidiary") or is a person to be acquired pursuant to Clause
----------
13.2.13 which would be a Material Subsidiary after giving effect
to such acquisition (an "Acquired Material Subsidiary") executes
----------------------------
and delivers, except to the extent that (i) such execution and
delivery is prohibited by law or (ii) it would, in the reasonable
opinion of the Agent, create an unreasonable risk of liability
for the directors of such Material Subsidiary after taking into
account the costs of the contingent liability to the Material
Subsidiary attributable to the guaranteeing of obligations under
the Finance Documents versus the benefits to be derived therefrom
by such Material Subsidiary, in the case of an Existing Material
Subsidiary, within 90 days of availability to the Borrower's
Agent of information demonstrating that such subsidiary has
become a Material Subsidiary and, in the case of an Acquired
Material Subsidiary, substantially contemporaneously with the
consummation of its acquisition (and in any event within 30 days
thereafter), to the Agent a Deed of Accession, the documents
described in Clauses 4.1.1(a) and (d) relevant to it and such
other documents as the Agent may reasonably request.
13.2.21 Interest Rate Protection.
-------------------------
At all times during the three year period after the date which is 90
days after the date of this Agreement the Lead Borrowers shall
maintain in effect one or more Interest Rate Agreements with respect
to the Loans, in an aggregate notional principal amount of not less
than 40% and not more than 50% of the Commitments which Interest Rate
Agreements shall have the effect of establishing maximum interest
rates for the respective relevant currencies reasonably acceptable to
the Agent with respect to such notional principal amount, each such
Interest Rate Agreement to be in form and substance satisfactory to
the Agent.
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13.3 Information and Accounting Undertakings
---------------------------------------
13.3.1 Events of Default
-----------------
The Borrowers' Agent will notify the Agent, and each Borrower will
notify the Borrowers' Agent, of the occurrence of any Event of Default
or Potential Event of Default immediately upon becoming aware of it
and will from time to time on request deliver to the Agent a
certificate confirming that no Event of Default or Potential Event of
Default has occurred or setting out details of any Event of Default or
Potential Event of Default and the action taken or proposed to be
taken to remedy it.
13.3.2 Books of Account
----------------
It will, and will procure that each of its respective subsidiaries
will, keep proper books of account and will prepare management
accounts in the usual form and will permit the Agent or any authorised
representative of the Agent upon reasonable notice to visit them and
inspect the same at the place where they are maintained and to
interview such officers and employees of the Borrowing Group as the
Agent may reasonably require, provided that such visits and interviews
may not occur more frequently than once a year unless an Event of
Default has occurred.
13.3.3 Appointment of Auditors
-----------------------
Each of the Lead Borrowers will not at any time appoint or continue to
employ any auditors other than the Auditors or other auditors of
international repute approved by the Agent, provided that nothing in
--------
this Clause 13.3.3 shall limit or otherwise affect the appointment of
statutory auditors.
13.3.4 Financial Statements and Operating Budget
-----------------------------------------
The Borrowers' Agent will deliver to the Agent in form and substance
acceptable to the Agent for distribution to the Lenders sufficient
copies for each of the Lenders of the following:-
(a) as soon as available and in any event within 120 days after the
end of each Accounting Reference Period, the consolidated
financial statements of the Borrowing Group and each Borrowing
Sub-Group, audited (in the case of the Borrowing Group only) by
the Auditors as at the end of and for that financial year;
(b) as soon as available and in any event within 45 days after the
end of each Accounting Quarter (commencing on or after the
initial Drawdown Date), the unaudited consolidated financial
statements of the Borrowing Group and each Borrowing Sub-Group,
setting out separately the accounts of each Borrower (and any
other member of the Borrowing Group as reasonably requested by
the Agent) and the relevant consolidating adjustments as at the
end of, and for, the relevant Accounting Quarter;
(c) as soon as available and in any event, in the case of all fiscal
months of each Sub-Group Holding Company other than the months of
April and
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July, within 30 days after the end of each such fiscal month and
in the case of the fiscal months of April and July of each Sub-
Group Holding Company, within 60 days after the end of each such
fiscal month, the consolidated monthly management accounts of
each Borrowing Sub-Group as at the end of such month;
(d) not less than 60 days after the beginning of each successive
Accounting Reference Period, the Operating Budget applicable to
such Accounting Reference Period;
(e) within 30 days after the end of each fiscal month of each Sub-
Group Holding Company in respect of each Sub-Group Holding
Company either (i) a certificate in the form of Schedule 7
demonstrating that, after giving effect on a pro forma basis to
each transaction permitted under sub-clause (ix) (b) of the
definition of "Permitted Investment", Clause 13.2.8 (g), Clause
13.2.8 (i), Clause 13.2.9 (b) or Clause 13.2.12(viii) which has
occurred, the Gearing Ratio for each of the Borrowing Sub-Groups
as of the last day of the most recently ended Accounting Quarter
is not greater than 1.25:1.00 or (ii) a certificate stating that
no transaction permitted under sub-clause (ix) (b) of the
definition of "Permitted Investment", Clause 13.2.8 (g), Clause
13.2.8 (i), Clause 13.2.9 (b) or Clause 13.2.12(viii) has
occurred during the prior fiscal month; and
(f) as soon as available and in any event by December 31, 1995, the
consolidated financial statements of the Euro Exide Group for the
period ended March 31, 1995 audited by the Auditors as at the end
of and for that financial year;
the financial statements provided pursuant to Sub-clauses 13.3.4(a),
(b), (c) and (f) to include, without limitation, in respect of each
Accounting Quarter or Accounting Reference Period, as the case may be,
a statement of consolidated profit and loss, a consolidated balance
sheet, a consolidated cash flow statement, together with a comparison
of all such information with the information, if any such consolidated
information is available, for the corresponding period in the
preceding financial year (or part thereof following the date hereof),
and the financial statements provided pursuant to Sub-clauses 13.3.4
(a), (b), (c) and (f) to include a comparison with the relevant
projections, estimates or forecasts in the relevant Operating Budget.
In the event that any financial information is provided under this
Clause 13.3.4 in respect of a period, or as at a date, prior to the
transfer by the Parent of the shares of capital stock of Euro Exide to
EHE or the transfer by CEAC of the shares of capital stock of CMP
Batteries Limited, an English company to EHE, then, in each case, such
financial information shall be provided on a pro forma basis after
giving effect to such transfer.
13.3.5 Financial Covenant and Other Compliance Certificates
----------------------------------------------------
Each of the financial statements delivered under Sub-clauses
13.3.4(a), (b) and (f) shall be accompanied by a certificate signed by
the chief executive officer with responsibility for finance of the
Borrowers' Agent and (in the case of financial statements delivered
pursuant to Sub-clauses 13.3.4(a) and (f)) approved by a corporate
meeting of the respective Boards of Directors of EHE,
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or the relevant Sub-Group Holding Company (as applicable) certifying
whether or not the Borrowing Group is in compliance with each of the
covenants contained in Clause 13.4 and whether or not any event set
out in Clause 14.1.20 has taken place (such certificate to contain
detailed calculations reasonably acceptable to the Agent demonstrating
such determination), confirming that at the date of such financial
statement no Event of Default or Potential Event of Default had
occurred, or if one has occurred, a description thereof and the action
taken or proposed to be taken to remedy it and, in the case of the
annual financial statements, (i) listing each Material Subsidiary as
at the date of such annual financial statements, and (ii) accompanied
by a certificate from the Auditors (in such form and with such content
as the Agent may reasonably require) demonstrating whether or not the
Borrowers are in compliance with the covenants contained in Clause
13.4 and whether or not any event set out in Clause 14.1.20 has taken
place.
13.3.6 Accounting Reference Period/Accounting Quarter
----------------------------------------------
No alteration may be made to its Accounting Reference Period or
Accounting Quarters without the prior written consent of the Agent
(which consent shall not be unreasonably withheld), other than a once-
only change required to conform such Accounting Reference Period and
Accounting Quarter to the financial year of the Parent, to the extent
not so conformed prior to the date of this Agreement. The Agent may
require such changes in the financial covenants contained in this
Agreement as will fairly reflect any such change.
13.3.7 Auditors' Investigations
------------------------
The Borrowers' Agent will, if so required by the Agent acting on the
instructions of the Majority Lenders (who believe reasonably and in
good faith that either (i) any financial statements or calculations
provided by the Borrowers' Agent are inaccurate or incomplete in any
material respect or (ii) the financial performance of the Borrowing
Group is reasonably likely to give rise (or has given rise) to a
breach of one or more of the financial covenants in Clause 13.4), at
the reasonable expense of the Borrowers, instruct the Auditors or
other firm of accountants selected by the Agent to discuss the
financial position of the Borrowing Group with the Borrowers and/or to
carry out an investigation into the affairs of the Borrowing Group
and/or the financial performance of the Borrowing Group and/or the
accounting and other reporting procedures and standards of the
Borrowing Group. Such investigation may include an independent
valuation of Inventory and Receivables. The Auditors or other
accountants shall be instructed to disclose to the Agent and the
Lenders (and provide it and the Lenders with copies of) such
information as the Agent may reasonably request regarding the
financial condition and operations of the Borrowers and any other
member of the Borrowing Group. The Borrowers shall not be obliged to
pay for any such exercise more than once in any Accounting Reference
Period unless a previous exercise demonstrated that the financial
information provided by the Borrowers' Agent pursuant to this
Agreement was materially incorrect, in which case the Borrowers shall
be liable for the costs of a subsequent exercise such as are necessary
to ensure that appropriate action has been taken to rectify the
problems identified.
13.3.8 Other Information
-----------------
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The Borrowers' Agent will promptly deliver to the Agent for
distribution to the Lenders:-
(a) details of any litigation, arbitration or administrative
proceedings which could reasonably be expected to give rise to a
Material Adverse Effect;
(b) at the same time as sent to any of its financial creditors, any
other material document or information sent to such creditors;
(c) such other information relating to its financial condition or
operations (including sales and details in relation to its
debtors), or those of any other member of the Borrowing Group, as
the Agent (or any other Lender through the Agent) may from time
to time reasonably request; and
(d) details of any occurrence or circumstance which will materially
adversely affect the ability of any Obligor to perform any of its
payment obligations under any of the Finance Documents.
13.3.9 Other Investigations
--------------------
It will, and will procure that its subsidiaries will, permit the Agent
and such person or persons as the Agent shall nominate at all
reasonable times during normal business hours and on not less than 24
hours' written notice to enter into and upon the principal premises
from which the relevant Borrower's or subsidiary's business is being
conducted to view the state and condition of such premises.
13.3.10 Approved Accounting Principles
------------------------------
All audited financial statements or accounts of the Borrowing Group
delivered or to be delivered to the Agent under this Agreement shall
be prepared in accordance with the relevant Approved Accounting
Principles. If (i) as a result of a change in law or other change in
Approved Accounting Principles such statements or accounts are
required to be prepared on a different basis, or (ii) any change in
Approved Accounting Principles would result in any material change in
the manner in which any item relevant to the covenants in Clause 13.4
(Financial Covenants) or the events described in Clause 14.1.20 is
accounted for or reported by the Borrowing Group, or (iii) any member
of the Borrowing Group shall propose to change its Approved Accounting
Principles from those specified in the definitions herein:-
(a) the Borrowers' Agent shall promptly so advise the Agent, and
shall deliver to the Agent (with sufficient copies for the
Lenders) the Operating Budget for the then current Accounting
Reference Period and the financial statements required to be
delivered under Clauses 13.3.4(a) and (b) during the prior twelve
month period, in each case, giving effect to the relevant
changes;
(b) on request of the Agent (which request shall be deemed made in
the case of a proposal to change any of the Approved Accounting
Principles from those specified in the definitions herein), the
Borrowers' Agent and the
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Agent (on behalf of the Lenders) shall negotiate in good faith
with a view to agreeing such amendments to Clauses 13.4 and
14.1.20 and/or the definitions of any or all of the terms used
therein as are necessary as a result of such change in law or in
generally accepted accounting principles (or other change) to
give the Lenders comparable protection to that contemplated at
the date of this Agreement;
(c) if amendments satisfactory to the Lenders are agreed by the
Borrowers and the Agent in writing within 30 days of such
notifications to the Agent, those amendments shall take effect in
accordance with the terms of that agreement; and
(d) if such amendments are not so agreed within 30 days, within 15
days after the end of that 30 day period, the Borrowers' Agent
shall either:-
(i) deliver to the Agent, in reasonable detail and in a
form satisfactory to the Agent, details of all such
adjustments as need to be made to the relevant
financial statements in order to bring them into line
with Approved Accounting Principles or, as the case may
be, to eliminate the effect of the relevant change; or
(ii) ensure that the relevant financial statements are
prepared in accordance with the relevant Approved
Accounting Principles subject, as the case may be, to
eliminating the effect of the relevant change.
13.3.11 Annual Meeting with Banks
-------------------------
At the request of the Agent, the Borrowers' Agent shall within 120
days after the close of each of its fiscal years hold a meeting at a
time and place selected by the Borrowers' Agent and reasonably
acceptable to the Agent, with all of the Lenders at which meeting
shall be reviewed the financial results of the previous fiscal year,
the financial condition of the Borrowing Group and the Operating
Budget for the then current fiscal year of the Borrowing Group.
13.3.12 Environmental Report Updates
----------------------------
The Borrowers' Agent shall within 60 days after the end of each
Accounting Reference Period furnish the Agent and each Lender with an
environmental audit report, satisfactory in form and scope to the
Agent, from Pilko & Associates or other environmental consulting firms
acceptable to the Agent, which updates, as of the end of each
Accounting Reference Period, compliance and liability issues with
respect to the sites owned or operated by members of the Borrowing
Group.
13.3.13 Absence of Negative Pledges
---------------------------
It will not, and will procure that none of its subsidiaries will,
covenant for the benefit of any person other than the Lenders pursuant
to the Finance Documents, to refrain from granting for the purpose of
securing Financial Indebtedness, Security Interests on all or any
portion of its or their assets or properties, except
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(i) in respect of assets subject to Permitted Security Interests in
favour solely of the holder of the relevant Security Interest and (ii)
any such covenants in existence on the date hereof pursuant to any of
the Continuing Indebtedness provided that the principal amount of such
--------
Continuing Indebtedness shall not be increased after the date hereof.
13.4 Financial Covenants
-------------------
13.4.1 It undertakes that:-
(a) Debt Service Cover Ratio
------------------------
In respect of any period specified below, the Debt Service
Cover Ratio shall not be less than the ratio specified below
for that period:
<TABLE>
<CAPTION>
=======================================================
PERIOD MINIMUM
RATIO
=======================================================
<S> <C>
Date of this Agreement to 31st March, 1998 1.30:1.00
- -------------------------------------------------------
1st April, 1998 to 31st March, 1999 1.50:1.00
- -------------------------------------------------------
1st April, 1999 to 31st March 2000 2.20:1.00
- -------------------------------------------------------
1st April, 2000 and thereafter 2.60:1.00
=======================================================
</TABLE>
(b) Expense Cover Ratio
-------------------
In respect of any period specified below, the Expense Cover
Ratio shall not be less than the ratio specified below for
that period:
<TABLE>
<CAPTION>
======================================================
PERIOD MINIMUM
RATIO
======================================================
<S> <C>
Date of this Agreement to 31st March 1998 1.50:1.00
- ------------------------------------------------------
1st April, 1998 to 31st March, 1999 2.00:1.00
- ------------------------------------------------------
1st April, 1999 and thereafter 2.50:1.00
======================================================
</TABLE>
Calculation
-----------
(a) The covenants contained in Clause 13.4.1 will be tested on a
rolling aggregate basis for the immediately preceding four
quarterly periods ending on the last day of the relevant
Accounting Quarter, in each case by reference to the quarterly
management accounts in respect of the first three Accounting
Quarters of each Accounting Reference Period, delivered to
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<PAGE>
the Agent pursuant to Clauses 13.3.4(b), for the relevant period,
and by reference to the audited accounts required to be delivered
to the Agent pursuant to Clause 13.3.4(a) in respect of the
fourth Accounting Quarter of each Accounting Reference Period;
provided that if when the audited accounts become available they
--------
either demonstrate that the figures in any relevant quarterly
management accounts utilised for any such calculation cannot have
been substantially accurate or indicate a material discrepancy
which is prejudicial to the Finance Parties between the aggregate
figures for the management accounts for the four relevant
Accounting Quarters and the aggregate audited figures, then the
Agent shall require such adjustment to the calculations made or
to be made as it reasonably considers appropriate to rectify such
inaccuracy or discrepancy, and compliance with the covenants in
Clause 13.4.1 will be determined by reference to such adjusted
figures.
(b) In the case of any component calculated by reference to
management accounts the relevant Approved Accounting Principles
will be applied within the reasonable parameters which may be
expected of management accounts not the subject of audit
procedures.
13.5 Additional Undertakings of CEAC and its subsidiaries
----------------------------------------------------
CEAC, and any Obligor that is a member of the Initial CEAC Group,
undertakes that:-
(a) Restriction on Redemption and Acquisition of Own Shares
-------------------------------------------------------
It will not, and will procure that the other Borrowers that are
in the Initial CEAC Group will not, directly or indirectly
redeem, purchase, retire or otherwise acquire for consideration
any shares, warrants or other equity or equity related securities
issued by it or set apart any sum for any such purpose or
otherwise reduce its capital without the consent of the Agent
(acting on the instructions of the Majority Lenders).
(b) Blockage of Payments, Etc.
--------------------------
It is not, and will procure that none of the members of the
Initial CEAC Group is, a party to any contractual or similar
arrangement pursuant to which any such subsidiary is prohibited
from making any loan, payment of dividends, distributions of
income or other amounts, or transferring any properties or
assets, to the relevant Borrower, or any condition or requirement
is imposed on any such payment or transfer except, in the case of
prohibitions on transfers of properties or assets, customary
provisions restricting subletting or assignment of any lease
governing a leasehold interest of it or one of its subsidiaries.
(c) Payments to its Members and Affiliates
--------------------------------------
It will not, and will procure that none of the members of the
Initial CEAC Group will, make any payment to the Parent or any of
the Parent's
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<PAGE>
subsidiaries (other than members of the CEAC Group) by way of
management fee, royalty fee or otherwise except in respect of
services actually provided on commercial terms and such fee may
only be paid if no Event of Default has occurred and is
continuing; provided that CEAC and its subsidiaries may make
payments to EHE pursuant to the Tax Integration Agreement in an
amount equal to the Tax which the respective payor would have
been required to pay to the French taxation authorities but for
the existence of the Tax Integration Agreement.
(d) Restriction on Payment of Dividends, Etc.
-----------------------------------------
CEAC will not, and EHE will not permit CEAC to, declare or pay,
directly or indirectly, any dividends or make any other
distribution, or other amounts whether in cash or otherwise, on
any ordinary shares of CEAC, or any other shares of CEAC or
directly or indirectly redeem, purchase, retire or otherwise
acquire any thereof; provided that so long as no Event of Default
--------
or Potential Event of Default then exists or would exist after
giving effect thereto, CEAC may, and EHE may cause CEAC to,
declare and pay dividends to CEAC's shareholders in an amount
which, when aggregated with loans and credits outstanding
pursuant to Clause 13.5(e)(vi), do not exceed 75% of the
consolidated Net Income of the CEAC Group (determined in
accordance with CEAC Approved Accounting Principles) for all
Accounting Reference Periods ending after 18th May, 1995.
(e) Loans, Etc.
-----------
It will not, and will procure that its subsidiaries will not,
make any loans or grant any credit to any person or make any
other similar arrangement other than (i) loans to directors or
employees which, together with all such loans made by other
members of the Borrowing Group, do not exceed a maximum aggregate
amount of FF 20,000,000 or the Equivalent Amount outstanding at
any time for the entire Borrowing Group, (ii) trade credit
granted in the ordinary course of its trading business, (iii)
loans of proceeds of Cash Advances to the extent permitted by
Clause 2.2, (iv) loans to all material terms of which the Agent
(acting upon the instructions of the Majority Lenders) has
consented, (v) loans to governmental agencies and
instrumentalities required by the operation of applicable law,
(vi) loans or credits granted by one member of the CEAC Group to
another member of the CEAC Group, (vii) provided no Event of
Default or Potential Event of Default then exists or would result
therefrom, loans (net of any repayments thereof) by CEAC to the
Parent or any of its subsidiaries (other than members of the CEAC
Group) which, when aggregated with dividends paid in accordance
with Clause 13.5(d), do not exceed 75% of the Net Income of the
CEAC Group (determined in accordance with CEAC Approved
Accounting Principles) for all Accounting Reference Periods
ending after 18th May, 1995, and (viii) EHE Debt Service Loans.
(f) Sonnenschein Purchase
---------------------
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<PAGE>
CEAC will use its reasonable efforts to consummate, or to procure
that another member of the Borrowing Group consummates, the
purchase of the equity shares of Sonnenschein outstanding on the
date of this Agreement and not beneficially owned by members of
the Borrowing Group within 270 days of the date of this Agreement
or as soon as practicable thereafter and, prior to the date on
which the Borrowing Group's percentage equity ownership of
Sonnenschein exceeds 75%, it will not (i) transfer or otherwise
dispose of shares of the capital stock of Sonnenschein, (ii)
permit Sonnenschein to make any acquisition of shares or any
acquisition of assets other than in the ordinary course of
trading, or (iii) permit Sonnenschein to merge or consolidate
with any other person (whether by winding-up, dissolution or
other means).
13.6 Additional Undertakings of Tudor
--------------------------------
Tudor undertakes that:
(a) Redemption of Tudor Convertible Bonds.
--------------------------------------
From the Initial Drawdown Date, it will proceed with reasonable
speed and diligence to redeem the Tudor Convertible Bonds held by
Banesto subject to receipt of the approval of the Comision
Nacional del Mercado de Valores, which it will take all
reasonable steps to obtain.
(b) Conversion of Hagen A.G.
------------------------
It will use its reasonable efforts to convert its subsidiary,
Hagen A.G., a German company, from an Aktiengesellschaft to a
Gesellschaft mit beschrankter Haftung, within 270 days of the
date of this Agreement or as soon as practicable thereafter, and
prior to the date of such conversion, it will not (i) transfer or
otherwise dispose of any shares of the capital stock of Hagen
A.G., (ii) permit Hagen A.G. to make any acquisition of shares or
any acquisition of assets other than in the ordinary course of
trading and (iii) permit Hagen A.G. to merge or consolidate with
any other person (whether by winding-up, dissolution or other
means).
(c) Guarantee of ICS
----------------
Prior to the date on which Industria Composizioni Stampate S.P.A.
accedes as a Guarantor, it will not (i) transfer or otherwise
dispose of shares of the capital stock of Industria Composizioni
Stampate S.P.A., (ii) permit Industria Composizioni Stampate
S.P.A. to make any acquisition of shares or any acquisition of
assets other than in the ordinary course of trading, or (iii)
permit Industria Composizioni Stampate S.P.A. to merge or
consolidate with any other person (whether by winding-up,
dissolution or other means).
13.7 Additional Undertakings of EHE
------------------------------
EHE undertakes that:
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<PAGE>
(a) Business
--------
It will not engage in any business or activity other than the
ownership of the shares of capital stock of EF and any other Sub-
Group Holding Company, and ownership of equity shares in the
Parent to be used by EHE solely for the purposes described in
Clause 13.2.11 and activities necessarily related thereto.
(b) Transfer of Euro Exide
----------------------
It will, within 30 days of the date of this Agreement, cause Euro
Exide to register the transfer of all of the issued and
outstanding shares of capital stock of Euro Exide in the name of
EHE.
(c) Ownership of EF
---------------
It will at all times own beneficially and of record 100% of the
outstanding shares of equity capital of EF other than Directors
Qualifying Shares and
(d) Business of EF; no Permitted EF Financial Indebtedness
------------------------------------------------------
It will procure that (i) EF will not engage in any business or
activity other than the ownership of up to 100% of the issued
shares of capital stock of CEAC contributed to EF by EHE and
activities necessarily related thereto, and (ii) EF will incur no
Financial Indebtedness other than Financial Indebtedness of EF
solely as a Guarantor hereunder.
13.8 Additional Undertaking of CEAC and Euro Exide
---------------------------------------------
Each of CEAC and Euro Exide undertake within that 30 days of the date
of this Agreement, they will cause CMP Batteries Limited, an English
company, to register the transfer of all of the issued and outstanding
shares of capital stock of CMP Batteries Limited in the name of Euro
Exide.
14. EVENTS OF DEFAULT
-----------------
14.1 List of Events
--------------
Each of the events set out in this Clause 14.1 constitutes an Event of
Default whether or not the occurrence of the event concerned is
outside the control of the Borrowers or any other person.
14.1.1 Payment Default
---------------
Any Obligor fails to pay on the due date any amount payable by it
under any of the Finance Documents at the place at and in the currency
in which it is expressed to be payable but, without prejudice to
Clause 27.1, such non-payment shall not constitute an Event of Default
if it is a non-payment in respect of interest or fees and the relevant
payment is received by the Agent within three Business Days of the due
date for payment thereof.
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14.1.2 Breach of Other Obligations
---------------------------
(a) A breach of any provision of Clause 13.4 (Financial Covenants)
occurs;
(b) any Borrower fails to comply with any of its obligations in
Clause 13 (other than Clause 13.4) and, in any such case, if such
failure is, in the reasonable opinion of the Agent, capable of
remedy, it is not remedied within ten Business Days after the
first of any Borrower becomes aware of such failure; or
(c) any Obligor fails to comply with or perform any of its other
obligations or undertakings under any of the Finance Documents
and, if such failure is, in the reasonable opinion of the Agent,
capable of remedy, it is not remedied within ten Business Days
after the first of any Obligor becomes aware of such failure.
14.1.3 Misrepresentation
-----------------
Any representation, warranty or statement which is made by any Obligor
in any of the Finance Documents or is contained in any certificate,
statement or notice provided under or pursuant to any of the Finance
Documents proves to be incorrect in any material respect when made (or
deemed to be repeated) unless the circumstances giving rise to that
default are, in the reasonable opinion of the Agent, remediable, and
are remedied within ten Business Days of the first of any Obligor
becoming aware of the same.
14.1.4 Invalidity, Unlawfulness, Etc.
-----------------------------
(a) Any provision of any Finance Document is, or becomes, materially
invalid or unenforceable for any reason (except by reason of the
unavailability of specific performance or other equitable remedy)
or shall be repudiated or the validity or enforceability of any
provision of any Finance Document shall at any time be contested
by any Obligor party thereto, or any Obligor shall deny the
existence of any liability or obligation on its part thereunder.
(b) At any time it is or becomes unlawful under the laws of any
applicable jurisdiction for any Obligor (other than a Non-
Material Subsidiary) to perform any of its material obligations
under any Finance Document.
(c) At any time any act, condition or thing required to be done,
fulfilled or performed in order (i) to enable any Obligor
lawfully to enter into, exercise its rights under and perform the
material obligations expressed to be assumed by it in any of the
Finance Documents, (ii) to ensure that the material obligations
expressed to be assumed by any Obligor in any Finance Document
are legal, valid and binding or (iii) to make each Finance
Document admissible in evidence in France (other than the payment
of any stamp tax described in the opinion delivered by Messrs.
Gide Loyrette Nouel and accepted by the Agent pursuant to Clause
4.1.1(d)) and the jurisdiction or jurisdictions in which any
Obligor is organised or incorporated (in each case, only to the
extent the relevant
119
<PAGE>
Obligor is a party thereto), is not done, fulfilled or performed,
and if the relevant matter is, in the reasonable opinion of the
Agent, capable of remedy, it is not remedied within fourteen
Business Days after the first of any Obligor becomes aware of
such matter.
14.1.5 Insolvency
----------
Subject to Clause 14.2, any member of the Borrowing Group (other than
a Non-Material Subsidiary and B.I.G. France SARL, a French societe a
responsabilite limitee) is declared insolvent (including any
suspension de pagos or quiebra) or is unable, or admits in writing its
inability, to pay its debts as they fall due or stops or threatens to
stop payment of its debts generally or becomes insolvent within the
terms of any applicable law.
14.1.6 Receivership and Administration
-------------------------------
Subject to Clause 14.2,
(a) an application is made for the appointment of an administrator
(as such term is used in the Insolvency Act 1986) or similar
official (including a sindico, interventor or administrador
judicial) in relation to any member of the Borrowing Group (other
than a Non-Material Subsidiary) or a resolution is passed by the
directors or shareholders of the Parent or any such member for
such an application to be made;
(b) a liquidator, trustee, administrative or other receiver, manager
(being a person acting on behalf of all or any creditors) or
similar officer (including a sindico, interventor or
administrador judicial) is appointed in respect of (or takes
possession of) any member of the Borrowing Group (other than a
Non-Material Subsidiary) or in respect of (or takes possession
of) all or any part of its assets; or
(c) any distress, execution, attachment (other than an attachment or
arrestment to found jurisdiction) or other process affects any
asset of any member of the Borrowing Group (other than a Non-
Material Subsidiary), except where such member is, in good faith,
reasonably contesting such distress, execution, attachment or
other process by proceedings diligently pursued and such
distress, execution, attachment or other process is discharged or
stayed within 30 days.
14.1.7 Compositions and Arrangements
-----------------------------
Subject to Clause 14.2, a moratorium or suspension of payments
(including suspension de pagos) in respect of all or any classes of
debts of any member of the Borrowing Group (other than a Non-Material
Subsidiary) or a composition or an arrangement with creditors
generally of any such member or any other arrangement whereby its
affairs are submitted to the control of its creditors is applied for,
ordered or declared.
14.1.8 Winding-up or Similar
---------------------
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<PAGE>
Subject to Clause 14.2, any order is made or resolution passed or any
legal proceedings are consented to by any member of the Borrowing
Group (other than a Non-Material Subsidiary) or otherwise commenced
for the suspension of payments generally (including a suspension de
pagos) or dissolution, termination of existence, liquidation, winding-
up or bankruptcy (including quiebra) of such member.
14.1.9 Protection from Creditors
-------------------------
Subject to Clause 14.2, any order is made or resolution is passed or
other action is taken by or with respect to any member of the
Borrowing Group (other than a Non-Material Subsidiary) for protection
from creditors of such member.
14.1.10 Similar Events Elsewhere
------------------------
Subject to Clause 14.2, there occurs in relation to any member of the
Borrowing Group (other than a Non-Material Subsidiary) or any of their
respective assets, in any country or territory in which that member is
organised or carries on business or to the jurisdiction of whose
courts it or any of its assets are subject, any event which
corresponds in that country or territory with any of those mentioned
in Clauses 14.1.5 to 14.1.9 (inclusive) (including, without
limitation, the filing of any petition or the commencement of any
proceedings under any United States federal or state bankruptcy,
insolvency, reorganisation or other similar law), or such member or
its assets otherwise become subject, in any such country or territory,
to any law relating to insolvency, bankruptcy or liquidation.
14.1.11 Cessation of Business
---------------------
Subject to Clause 14.2, any member of the Borrowing Group (other than
a Non-Material Subsidiary) ceases, or threatens to cease, to carry on
all or a substantial part of its business, other than in connection
with a transfer by such member of all or substantially all of its
assets in accordance with Clause 13.2.8(g).
14.1.12 Compulsory Acquisition
----------------------
All or any part of the property or assets of any member of the
Borrowing Group (other than a Non-Material Subsidiary) is compulsorily
acquired by, or by the order of, any central or local governmental
authority and such acquisition results in a Material Adverse Effect.
14.1.13 Security Interests
------------------
Any Security Interest securing obligations or liabilities in excess of
FF 10,000,000 or the Equivalent Amount affecting the business,
undertaking or any of the assets of any member of the Borrowing Group
becomes enforceable (other than by the exercise of a lien arising
solely by operation of law in the ordinary course of trading where the
indebtedness in respect of which that lien is being exercised (i) has
been due for less than seven days or (ii) is being contested in good
faith by appropriate means) whether or not steps are taken to enforce
the same.
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14.1.14 Cross Default
-------------
(a) Any other Financial Indebtedness in excess of FF 20,000,000 or
the Equivalent Amount of any member of the Borrowing Group:-
(i) is not paid when due or within any applicable grace
period in any agreement relating to that Financial
Indebtedness; or
(ii) becomes due and payable (or presently capable of being
declared due and payable) before its normal maturity or
is placed upon demand before it is due (or any
commitment for any such indebtedness is cancelled or
suspended) by reason of a default or event of default,
however described, or by reason of any other
contractual provision requiring prepayment.
(b) Any amount due under a WCP Facility becomes due and payable (or
presently capable of being declared due and payable) before its
normal maturity or is placed on demand before its time (or any
WCP Commitment for any WCP Facility is cancelled or suspended) by
reason of a default, however described, relating thereto.
14.1.15 Auditors' Qualification
-----------------------
The Auditors qualify their report on the audited consolidated
financial statements of the Borrowing Group or any Borrowing Sub-Group
in any way whatsoever, other than those of the type previously
reported in any audited annual financial statements delivered to the
Lenders prior to the date of this Agreement and in connection
herewith.
14.1.16 Material Adverse Effect
-----------------------
An event or circumstance occurs or exists which has, or is reasonably
likely to have, a Material Adverse Effect.
14.1.17 Litigation
----------
Except as specifically set forth in Schedule 14.1.17, any litigation,
arbitration or administrative proceedings are current or pending at
the date of this Agreement or are commenced after that date against
any member of the Borrowing Group which have, or are reasonably likely
to have, a Material Adverse Effect.
14.1.18 Environmental Defaults
----------------------
(a) Any member of the Borrowing Group does not comply with any
Environmental Law or Environmental Licence or becomes subject to
any liability or potential liability in respect of Dangerous
Substances and that non-compliance or liability or potential
liability is reasonably likely to have a Material Adverse Effect;
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<PAGE>
(b) If any entry on any register maintained by any government or like
authority for those properties deemed contaminated with Dangerous
Substances, including, without limitation, a "black spots" list,
is made in respect of any property owned by any member of the
Borrowing Group (or with respect to which property any member of
the Borrowing Group has any liability or potential liability) and
as a result of such registration there is a fall in the value of
the property in question which is reasonably likely to have a
Material Adverse Effect;
(c) any change in applicable Environmental Law results in the
imposition of any liability on any Finance Party in relation to
any Environmental Event which liability is reasonably likely to
have a Material Adverse Effect; or
(d) any change in applicable law causes the rights of any person in
relation to any Environmental Claim against any member of the
Borrowing Group to rank ahead of the rights of any Finance Party
against it in a manner which has a Material Adverse Effect.
14.1.19 Certain Defaults of Tudor and its subsidiaries
----------------------------------------------
(a) Blockage of Payments
--------------------
Tudor or any of its subsidiaries are or become a party to any
contractual or similar arrangement pursuant to which any such
subsidiary is prohibited from making any loan, payment of
dividends, distributions of income or other amounts, or
transferring any properties or assets, to any Borrower, or any
condition or requirement is imposed on any such payment or
transfer except, in the case of prohibitions on transfers of
properties or assets, customary provisions restricting subletting
or assignment of any lease governing a leasehold interest of it
or one of its subsidiaries.
(b) Certain Dividends and Other Payments
------------------------------------
(i) Loans to the Parent and Subsidiaries of the Parent
--------------------------------------------------
Tudor or any of its subsidiaries make a loan or grant any
credit, or make any similar arrangement, to or for the
benefit of the Parent or any of its subsidiaries (other
than EHE and its subsidiaries).
(ii) Payments to its Members and Affiliates
--------------------------------------
Tudor or any of its subsidiaries make any payment to the
Parent or any of the Parent's subsidiaries (other than
Tudor and its subsidiaries) by way of management fee,
royalty fee or other fee for services of any nature
except, where payment is made when no Event of Default or
Potential Event of Default then exists or would result
therefrom, in respect of services actually provided on
commercial terms.
123
<PAGE>
(iii) Payments of Dividends, Etc.
---------------------------
Tudor or any of its subsidiaries declares or pays,
directly or indirectly, any dividends or makes any other
distribution, or other amounts whether in cash or
otherwise, on any of its ordinary or other shares, (other
than, in any case, a dividend or distribution resulting in
a payment only to Tudor or, in the case of a payment by a
subsidiary of Tudor, to another subsidiary of Tudor or
another shareholder of that subsidiary), or EHE votes at a
shareholder meeting of Tudor in favour of any of the
foregoing.
(iv) Repayment of Certain Indebtedness
---------------------------------
Tudor or any of its subsidiaries repay or purchase any
Financial Indebtedness to or from the Parent or any of its
subsidiaries (other than to or from members of the
Borrowing Group).
(v) Redemption and Acquisition of Own Shares
----------------------------------------
Tudor or any of its subsidiaries shall, except to the
extent (a) required by this Agreement in respect of the
Tudor Convertible Bonds or (b) permitted by this Agreement
in respect of the equity shares of Tudor outstanding on
the date hereof and not beneficially owned by members of
the Borrowing Group, directly or indirectly, redeem,
purchase, retire or otherwise acquire for consideration
any shares, warrants or other equity or equity related
securities issued by it or set apart any sum for any such
purpose or otherwise reduce its capital without the
consent of the Agent (acting on the instructions of the
Majority Lenders).
The foregoing subclauses of this Clause (b) notwithstanding, as
long as any Exide Notes remain outstanding, no:
(w) payment of dividends or making of any other
distributions permitted by applicable law on any
Capital Stock of a Tudor Restricted Subsidiary,
which Capital Stock is owned by the Parent or any of
its Restricted Subsidiaries,
(x) payment of any Indebtedness (as defined in each
Indenture as in effect on the date hereof) owed by a
Tudor Restricted Subsidiary to the Parent or any
other Restricted Subsidiary,
(y) loan or advance by any Tudor Restricted Subsidiary
to the Parent or any other Restricted Subsidiary, or
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(z) transfer of any property or assets by a Tudor
Restricted Subsidiary to the Parent or any other
Restricted Subsidiary,
made at any time when there has been (x) no acceleration of
obligations hereunder pursuant to Clause 14.3 and (y) no failure
---
to pay in full the Financial Indebtedness under this Agreement at
the final maturity thereof, shall be an Event of Default if the
aggregate amount of such payments, loans, advances and transfers,
including for this purpose a payment made in respect of the Tudor
Convertible Bonds held by the Parent on the date of this
Agreement and a payment made in respect of the purchase of the
equity shares of Tudor and/or Sociedad Portuguesa do Acumulador
Tudor S.A. outstanding on the date of this Agreement and
beneficially owned by the Parent or any of its Restricted
Subsidiaries (other than Tudor or any of its subsidiaries), (each
a "PAYMENT") made by any such Tudor Restricted Subsidiary is less
than or equal to 100% of such Tudor Restricted Subsidiary's
Adjusted Consolidated Net Income (as defined in each of the
Indentures) subsequent to 2nd October, 1994 (provided that in the
event any such Payments are made in the form of asset transfers,
such assets shall be valued at the value of such assets set forth
on the Parent's books under U.S. GAAP (as defined in each of the
Indentures), and, whether or not any Exide Notes remain
outstanding, no EHE Debt Service Loan shall be an Event of
Default.
14.1.20 Minimum Net Worth and Gearing Events of Default
-----------------------------------------------
The event set out in sub-clause (a) or (b) takes place at any time or
the event set out in sub-clause (c) takes place with respect to more
than one Borrowing Sub-Group during the same Accounting Quarter, or
the event set out in sub-clause (c) takes place with respect to any
one Borrowing Sub-Group and is not cured during the Accounting Quarter
following the Accounting Quarter in which such event first takes
place.
(a) Minimum Net Worth of Borrowing Group
------------------------------------
As at the end of any Accounting Quarter, the Net Worth of the
Borrowing Group (determined in accordance with EHE Approved
Accounting Principles), less the outstanding principal amount of
any loans or other advances by any member of the Borrowing Group
to (or financial receivables of such member from), or other
Financial Indebtedness (including without limitation but without
duplication, guarantees) of any member of the Borrowing Group in
respect of, the Parent or any of its subsidiaries (other than a
member of the Borrowing Group), tested and calculated on the same
basis as set forth in Clause 13.4.2 for the covenants referred to
therein, is less than the amount specified below for the period
during which such Accounting Quarter falls:-
<TABLE>
<CAPTION>
=====================================================================
PERIOD AMOUNT (IN FF)
=====================================================================
<S> <C>
Date of this Agreement to 31st December, 1996 1,900 million
---------------------------------------------------------------------
</TABLE>
125
<PAGE>
<TABLE>
<S> <C>
=====================================================================
1st January, 1997 to 31st December, 1997 2,000 million
=====================================================================
1st January, 1998 to 31st December, 1998 2,300 million
=====================================================================
1st January, 1999 to 31st December, 1999 2,600 million
=====================================================================
1st January, 2000 to 31st December, 2000 3,000 million
=====================================================================
1st January, 2001 to 31st December, 2001 3,200 million
=====================================================================
1st January, 2002 and thereafter 4,000 million
=====================================================================
</TABLE>
(b) Gearing of Borrowing Group
--------------------------
In respect of any period specified below, the Gearing Ratio of
the Borrowing Group is greater than the ratio specified below for
that period:-
<TABLE>
<CAPTION>
===============================================================
PERIOD MAXIMUM
RATIO
===============================================================
<S> <C>
Date of this Agreement to 31st December, 1996 1.50:1.00
---------------------------------------------------------------
1st January, 1997 to 31st December, 1997 1.20:1.00
---------------------------------------------------------------
1st January, 1998 to 31st December, 1998 0.90:1.00
---------------------------------------------------------------
1st January, 1999 to 31st December, 1999 0.70:1.00
---------------------------------------------------------------
1st January, 2000 and thereafter 0.30:1.00
===============================================================
</TABLE>
(c) Gearing of Borrowing Sub-Groups
-------------------------------
As at the end of any Accounting Quarter, the Gearing Ratio of any
Borrowing Sub-Group is greater than 1.25:1.00.
14.1.21 Constitutional Documents
------------------------
The Constitutional Documents of any Borrower or any subsidiary of a
Borrower are materially amended which amendment is reasonably likely
to result in a Material Adverse Effect.
14.1.22 Payment of Management Fees
--------------------------
The members of the Borrowing Group pay (a) to the Parent or any
subsidiary of the Parent that is not a member of the Borrowing Group
management fees, royalty fees or otherwise in respect of services
actually provided on commercial terms either (y) in an aggregate
amount in excess of FF 35,000,000 in any Accounting Reference Period
or (z) following the occurrence and during the continuance of any
Potential Event of Default or Event of Default or (b) to EHE
management fees, royalty fees or other similar fees in any amount.
14.1.23 Non-Repayment of Parent/Tudor Debt
----------------------------------
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<PAGE>
The Parent fails to apply the proceeds from the redemption or
repurchase of the Tudor Convertible Bonds held by the Parent on the
date of this Agreement, together with certain fees due and payable, to
the repayment in full of the USD 10,000,000 loan from Tudor to the
Parent outstanding as the date of this Agreement, promptly after the
occurrence of such redemption.
14.1.24 Exercise of Remedies by Parent Lenders
--------------------------------------
The lenders party to the Parent Credit Agreement or any agreement
refinancing all or any part of the Financial Indebtedness evidenced by
the Parent Credit Agreement determine, in accordance with the relevant
voting provisions, to exercise remedies with respect to the shares of
capital stock of EHE pledged to such lenders or their agent as
security for the obligations of the Parent thereunder.
14.2 Bankruptcy and Insolvency Types of Events of Default
----------------------------------------------------
Notwithstanding the terms of 14.1.5 through 14.1.11 inclusive, the
occurrence of any event described under such Clauses with respect to
any subsidiary of any Sub-Group Holding Company shall not constitute
an Event of Default if the Borrower's Agent shall have, not less than
twenty days prior to the occurrence of such event, provided evidence
satisfactory to the Agent that, the occurrence of such event is not
reasonably likely either to (i) have a Material Adverse Effect or (ii)
to result in the incurrence by the Lenders of any material liabilities
or claims.
14.3 Cancellation and Repayment
--------------------------
At any time after the occurrence and during the continuance of an Event
of Default the Agent may and, if so instructed by the Majority Lenders,
will by notice to the Borrowers' Agent:-
(a) cancel any unborrowed amount of the Facilities (whereupon the
commitment of each Lender in respect to each Facility shall be
reduced to zero);
(b) declare all Advances, accrued interest thereon and any other sum
accrued under this Agreement and any of the other Finance
Documents to be immediately due and payable, whereupon they shall
become so due and payable; and/or
(c) require the relevant Borrower immediately, at the option of the
Agent, to (i) procure that each Revolving Credit Guarantee,
Revolving L/C, Banesto Term Letter of Credit and SINAC Term
Guarantee is cancelled with immediate effect, (ii) pay to the
relevant Issuing Lender an amount equal to the Revolving Credit
Guarantee Outstandings, Revolving L/C Outstandings, Banesto Term
Letter of Credit Outstandings and SINAC Term Guarantee
Outstandings (as applicable) allocable thereto, (iii) provide to
the Agent a counterguaranty or an indemnity satisfactory in all
respects to the Agent and in an amount equal to the amount set
forth in the
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<PAGE>
preceding item (iii) of this subclause 14.3(c) or (iv) provide to
the beneficiary of each such Revolving Credit Guarantee,
Revolving L/C, Banesto Term Letter of Credit and SINAC Term
Guarantee a new letter of credit, satisfactory in all respects to
such beneficiary, in substitution therefor.
15. GUARANTEE
---------
15.1 Guarantee
---------
Subject to any limitations specified for the relevant Guarantor in
Clause 15.10 or in the Deed of Accession, if any, executed by it
hereunder, each Guarantor irrevocably and unconditionally:-
(a) as principal obligor, waiving any benefit under applicable law
(in the case of each Guarantor incorporated under the laws of
Spain, con renuncia a los beneficios de excusion, orden y
division), guarantees to each Finance Party, prompt performance
by each Obligor (any reference in this Guarantee to one or more
Obligors shall not be construed to include a reference by a
Guarantor to itself in its capacity as a Borrower or a
Guarantor), of all its respective obligations under the Finance
Documents (the "GUARANTEE OBLIGATION");
(b) undertakes with each Finance Party that whenever (i) an Obligor
does not pay any amount when due under or in connection with any
Finance Document or (ii) a Lead Borrower which is the direct or
indirect parent of such Guarantor is unable to make the
prepayment required by Clause 7.3.3 because of any legal
restriction on the payment of dividends or distributions in
respect of any of the shares of its subsidiaries, such Guarantor,
or (iii) an Obligor which is the direct parent of a member of the
Borrowing Group which is not an Obligor is unable to make a
payment required by Clause 7.3.1 or 7.3.2, to the maximum extent
permitted by applicable law, shall forthwith on demand by the
Agent pay that amount (the "PAYMENT OBLIGATION") as if such
Guarantor instead of the relevant Obligor were expressed to be
the principal obligor; and
(c) indemnifies each Finance Party on demand against any loss or
liability suffered by it under the Finance Documents as a result
of any obligation guaranteed by such Guarantor being or becoming
unenforceable, invalid or illegal.
15.2 Joint and Several Liability
---------------------------
Subject to any limitations specified for the relevant Obligor in
Clause 15.10 and/or in the relevant Deed of Accession, each obligation
expressed under this Agreement to be an obligation of the Obligors
shall be the joint and several obligation of each Obligor.
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<PAGE>
15.3 Continuing Guarantee
--------------------
This guarantee is a continuing guarantee and will extend to the
ultimate balance of all sums payable by the Obligors under the Finance
Documents, regardless of any intermediate payment or discharge in
whole or in part, including, without limitation, any Permitted Assumed
Debt.
15.4 Reinstatement
-------------
(a) Where any discharge (whether in respect of the obligations of any
Obligor or any security for those obligations or otherwise) is
made in whole or in part or any arrangement is made on the faith
of any payment, security or other disposition which is avoided or
must be restored on insolvency, liquidation or otherwise without
limitation, the liability of each Guarantor under this Clause 15
shall continue as if the discharge or arrangement had not
occurred.
(b) Each Finance Party may concede or compromise any claim that any
payment, security or other disposition is liable to avoidance or
restoration.
15.5 Waiver of Defences
------------------
The obligations of each Guarantor under this Clause 15 will not be
affected by, and each Guarantor waives its rights (to the fullest
extent permitted by law) in connection with, any act, omission, matter
or thing which, but for this provision, would reduce, release or
prejudice any of its obligations under this Clause 15 or prejudice or
diminish those obligations in whole or in part, including (whether or
not known to it or any Finance Party):-
(a) any time or waiver granted to, or composition with, any Obligor
or any other person;
(b) the taking, variation, compromise, exchange, renewal or release
of, or refusal or neglect to perfect, take up or enforce, any
rights against, or security over assets (including any balance of
any deposit or account or credit on the books of any Finance
Party or other person in favour of any Obligor or any other
person) of, any Obligor or other person or any non-presentation
or non-observance of any formality or other requirement in
respect of any instrument or any failure to realise the full
value of any security;
(c) any incapacity or lack of powers, authority or legal personality
of or dissolution or change in the members or status of any
Obligor or any other person;
(d) any variation (however fundamental) or replacement of a Finance
Document or any other document or security so that references to
that Finance Document in this Clause 15 shall include each
variation or replacement;
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<PAGE>
(e) any unenforceability, illegality or invalidity of any obligation
of any person under any Finance Document or any other document or
security, to the intent that such Guarantor's obligations under
this Clause 15 shall remain in full force and its guarantee be
construed accordingly, as if there were no unenforceability,
illegality or invalidity;
(f) any postponement, discharge, reduction, non-provability or other
similar circumstance affecting any obligation of any Obligor
under a Finance Document resulting from any insolvency,
liquidation or dissolution proceedings or from any law,
regulation or order so that each such obligation shall for the
purposes of each Guarantor's obligations under this Clause 15 be
construed as if there were no such circumstance; or
(g) the incurrence by any Borrower of the Financial Indebtedness of
another Borrower under the circumstances described in the
definition of "Permitted Assumed Debt".
15.6 Immediate recourse
------------------
Each Guarantor waives any right it may have of first requiring any
Finance Party (or any trustee or agent on its behalf) to proceed
against or enforce any other rights or security or claim payment from
any person before claiming from such Guarantor under this Clause 15.
15.7 Appropriations
--------------
Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid
in full, each Finance Party (or any trustee or agent on its behalf)
may:-
(a) refrain from applying or enforcing any other moneys, security or
rights held or received by that Finance Party (or any trustee or
agent on its behalf) in respect of those amounts, or apply and
enforce the same in such manner and order as it sees fit (whether
against those amounts or otherwise) and no Guarantor shall be
entitled to the benefit of the same; and
(b) hold in a market rate interest-bearing suspense account any
moneys received from each Guarantor or on account of such
Guarantor's liability under this Clause 15, without liability to
pay interest on those moneys.
15.8 Non-competition
---------------
Until all amounts which may be or become payable by the Obligors under
or in connection with the Finance Documents have been irrevocably paid
in full, each Guarantor shall not, after a claim has been made or by
virtue of any payment or performance by it under this Clause 15:-
130
<PAGE>
(a) be subrogated to any rights, security or moneys held, received or
receivable by any Finance Party (or any trustee or agent on its
behalf) or be entitled to any right of contribution or indemnity
in respect of any payment made or moneys received on account of
such Guarantor's liability under this Clause 15;
(b) without the consent of the Agent, claim, rank, prove or vote as a
creditor of any Obligor or its estate in competition with any
Finance Party (or any trustee or agent on its behalf); or
(c) receive, claim or have the benefit of any payment, distribution
or security from or on account of any Obligor , or exercise any
right of set-off as against any Obligor.
Each Guarantor shall hold in trust for and forthwith pay or transfer
to the Agent for the Finance Parties any payment or distribution or
benefit of security received by it contrary to this Clause 15.8.
15.9 Additional Security, Relation to Other Obligations of Guarantors;
-----------------------------------------------------------------
This guarantee is in addition to and shall not in any way be
prejudiced by any other security now or hereafter held by any Finance
Party.
15.10 Limitations on Certain Guarantees
---------------------------------
15.10.1 Guarantee of CEAC and Certain Subsidiaries
------------------------------------------
The other terms and conditions of Clause 15 notwithstanding, (i) the
Guarantee Obligation of CEAC and its subsidiaries organised under the
laws of France which are members of the Initial CEAC Group shall not
include obligations under the Finance Documents of EHE as a Borrower,
or of any other Borrower solely in its capacity as a Guarantor of
EHE's obligations under the Finance Documents, and (ii) the Payment
Obligation of CEAC and its subsidiaries organised under the laws of
France which are members of the Initial CEAC Group shall not include
amounts due from EHE as a Borrower, or from any other Borrower solely
in its capacity as a Guarantor of EHE's obligations under the Finance
Documents; provided that the foregoing shall not be deemed to limit
--------
CEAC's and such subsidiaries' Guarantee Obligation or Payment
Obligation in respect of any Obligor's respective obligations in any
other capacity or any obligation of any other Obligor under any of the
Finance Documents.
15.10.2 Guarantors organised in Germany.
-------------------------------
(a) Subject to Clause 15.10.2(c), the obligations under this Clause
15 of each Guarantor which is a gesellschaft mit beschrankter
Haftung organised under the laws of the Federal Republic of
Germany (each a "GERMAN GMBH GUARANTOR") shall at all times be
limited so that its liability as a Guarantor under this Agreement
and the other Finance Documents shall at no time require its
payment of any moneys which are required to maintain its
registered share capital ("Stammkapital") to the extent solely
that such
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<PAGE>
share capital is protected by Sections 30 and 31 of the German
Limited Liabilities Companies Act ("GmbH-Gesetz").
(b) Subject to Clause 15.10.2(c), the Finance Parties shall not be
entitled to enforce the obligations of any German GmbH Guarantor
under this Clause 15 for so long as, and solely to the extent
that, such enforcement would cause such German GmbH Guarantor's
net assets ("Reinvermogen") to be reduced below the amount of its
registered share capital which is protected by Sections 30 and 31
of the German Limited Liabilities Companies Act ("GmbH-Gesetz").
(c) Nothing in this Clause 15.10.2 shall limit or prejudice, or shall
be deemed to limit or prejudice, in any fashion any obligations
of any Obligor (including without limitation where such Obligor
also is a German GmbH Guarantor) as an Obligor under this
Agreement or any of the other Finance Documents.
16. THE AGENT AND THE OTHER FINANCE PARTIES
---------------------------------------
16.1 Appointment and duties of the Agent, Security Agent Lead Arranger,
------------------------------------------------------------------
Underwriters and Co-Arrangers
-----------------------------
16.1.1 Each Lender hereby appoints (i) Bankers Trust Company as Agent, Lead
Arranger and an Underwriter, to act as its agent and lead arranger and
an underwriter, respectively, in connection with the Finance
Documents, (ii) Bankers Trust Company as Security Agent, to act as
security agent for purposes of the Security Documents and as agent as
defined under French law ("mandataire") for purposes of the Security
Documents which purport to apply to French assets, (iii) Bank of
America N.T. & S.A., Bank of Montreal and Citibank, N.A. to act with
Bankers Trust Company as Underwriters, and (iv) Bank of America N.T. &
S.A., Bank of Montreal and Citibank, N.A. to act as Co-Arrangers,
under and in connection with the Finance Documents and irrevocably
authorises Bankers Trust Company for and on its behalf to exercise
such rights, powers and discretions as are specifically delegated to
it by the terms of the Finance Documents, together with all such
rights, powers and discretions as are incidental thereto, and to give
a good discharge for any moneys payable under the Finance Documents.
The Lenders empower the Agent or the Security Agent, as the case may
be, on the broadest terms to take such actions and to exercise any and
all rights derived from this Agreement, including, but not limited to
(i) recordation of the Finance Documents before a Spanish Notary or a
Commercial Stockbroker, (ii) the enforcement of the Finance Documents,
and (iii) the sending or receiving of whatever notices or
communications the Agent may deem necessary or advisable.
16.1.2 The Agent will act solely as agent for the Lenders in carrying out its
functions as agent under the Finance Documents and will exercise the
same care as it would in dealing with a credit for its own account.
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<PAGE>
16.1.3 The relationship between the Lenders and the Agent is that of
principal and agent only. The Agent shall not have, nor be deemed to
have assumed, any obligations to, or trust or fiduciary relationship
with, the other Finance Parties or the Parent, EHE or any member of
the Borrowing Group other than those for which specific provision is
made by the Finance Documents.
16.1.4 References in this Clause 16 to "Agent" shall be deemed also to be
references to the Agent in its capacities as Security Agent, Lead
Arranger and Underwriter (save where specific reference is made to the
contrary), notwithstanding the use of the expression "the Agent and
the Security Agent" in certain provisions of the Finance Documents.
16.2 Agent's Duties
--------------
The Agent shall:-
16.2.1 promptly send to each Lender details of each communication received by
it from the Parent, the Borrowers' Agent or the members of the
Borrowing Group under the Finance Documents, except that details of
any communication relating to a particular Lender shall be sent to
that Lender only;
16.2.2 promptly send to each Lender a copy of any legal opinion delivered
under this Agreement or any of the other Finance Documents and of any
document or information received by it pursuant to Clause 13.3
(Information and Accounting Undertakings) or (if requested) pursuant
to Clause 4.1;
16.2.3 subject to those provisions of this Agreement which require the
consent of all the Lenders, act in accordance with any instructions
from the Majority Lenders or, if so instructed by the Majority
Lenders, refrain from exercising a right, power or discretion vested
in it under this Agreement or any of the Finance Documents;
16.2.4 have only those duties, obligations and responsibilities expressly
specified in the Finance Documents; and
16.2.5 without prejudice to any other clause hereof (including without
limitation Clauses 16.3.5, 16.4(c) and 16.6.3), promptly notify each
Lender of the occurrence of any Event of Default or Potential Event of
Default of which an officer of the Agent responsible for the
administration of this Agreement becomes aware.
16.3 Agent's and Security Agent's Rights
-----------------------------------
The Agent and the Security Agent, as the case may be, may:-
16.3.1 perform any of its duties, obligations and responsibilities under the
Finance Documents by or through its personnel, delegates or agents (on
the basis that the Agent and/or Security Agent may extend the benefit
of any indemnity received by it hereunder to its personnel, delegates
or agents);
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<PAGE>
16.3.2 refrain from exercising any right, power or discretion vested in it
under the Finance Documents until it has received instructions from
the Majority Lenders, or where relevant, all the Lenders;
16.3.3 unless it has received notice in writing to the contrary treat (a) the
Lender which makes available any portion of an Advance as the person
entitled to repayment of that portion and (b) the office set under a
Lender's name in Schedule 1 (or, in the case of a Transferee, at the
end of the Transfer Certificate to which it is a party as Transferee)
as its Lending Office;
16.3.4 refrain from doing anything which would or might in its opinion be
contrary to any law, regulation, directive or judgement of any court
of any jurisdiction or otherwise render it liable to any person and
may do anything which is in its opinion necessary to comply with any
such law, regulation, judgement or directive;
16.3.5 assume that no Event of Default or Potential Event of Default has
occurred unless an officer of the Agent while active on the account of
the Borrowers acquires actual knowledge to the contrary;
16.3.6 refrain from taking any step (or further step) to protect or enforce
the rights of any Lender under this Agreement or any of the other
Finance Documents until it has been indemnified and/or secured to its
satisfaction against any and all costs, losses, expenses or
liabilities (including legal fees) which it would or might sustain or
incur as a result;
16.3.7 rely on any communication or document believed by it to be genuine and
correct and to have been communicated or signed by the person to whom
it purports to be communicated and signed;
16.3.8 rely as to any matter of fact which might reasonably be expected to be
within the knowledge of the Borrowers on a statement by or on behalf
of the Borrowers;
16.3.9 obtain and pay for such legal or other expert advice or services as
may seem necessary to it or desirable and rely on any such advice.
16.3.10 accept without enquiry such title as the Obligors may have to any
asset or assets intended to be the subject of the security
created by the Security Documents; and
16.3.11 hold or deposit any title deeds, the Security Documents or any
other documents in connection with any of the assets charged by
the Security Documents with any banker or banking company or any
company whose business includes undertaking the safe custody of
deeds or documents or with any lawyer or firm of lawyers and it
shall not be responsible for or be required to insure against any
loss incurred in connection with any such holding or deposit and
it may pay all sums required to be paid on account or in respect
of any such deposit.
134
<PAGE>
16.4 Exoneration of Agent, Lead Arranger, Underwriters, Co-Arrangers and
-------------------------------------------------------------------
Security Agent
--------------
Neither the Agent nor the Lead Arranger nor the Underwriters nor the
Co-Arrangers nor the Security Agent nor any of their respective
personnel or agents:-
(a) shall be responsible for the adequacy, accuracy or completeness
of any representation, warranty, statement or information in the
Information Memorandum, any of the Finance Documents or any
notice or other document delivered under the Finance Documents;
(b) shall be responsible for the execution, delivery, validity,
legality, adequacy, enforceability or admissibility in evidence
of any of the Finance Documents;
(c) shall be obliged to enquire as to the occurrence or continuation
of an Event of Default or a Potential Event of Default;
(d) shall be responsible for any failure of the Parent or any member
of the Borrowing Group or any of the Lenders duly and punctually
to observe and perform their respective obligations under the
Finance Documents;
(e) shall be responsible for the consequences of relying on the
advice of any professional advisers selected by any of them in
connection with the Finance Documents;
(f) shall be liable for acting (or refraining from acting) in what it
believes to be in the best interests of the Lenders in
circumstances where it has been unable, or it is not practicable,
to obtain the instructions of the Lenders or the Majority Lenders
(as the case may be); or
(g) shall be liable for anything done or not done by it under or in
connection with the Finance Documents save in the case of its own
negligence or wilful misconduct.
16.5 The Agent, the Lead Arranger, the Underwriters, the Co-Arrangers and
--------------------------------------------------------------------
the Security Agent individually
-------------------------------
16.5.1 If it is a Lender, each of the Agent, the Lead Arranger, the
Underwriters, the Co-Arrangers and the Security Agent shall have the
same rights and powers under the Finance Documents as any other Lender
and may exercise those rights and powers as if it were not also acting
as Agent, Lead Arranger, Underwriter, Co-Arrangers or Security Agent.
16.5.2 Each of the Agent, the Lead Arranger, the Underwriters, the Co-
Arrangers and the Security Agent may:-
(a) retain for its own benefit (and without liability to account) any
fee or other sum receivable by it for its own account; and
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<PAGE>
(b) accept deposits from, lend money to, provide any advisory, trust
or other services to or engage in any kind of banking or other
business with any party to this Agreement, or any subsidiary or
affiliate of any party (and, in each case, may do so without
liability to account).
16.6 Communications and Information
------------------------------
16.6.1 All communications to the Parent, Borrowers' Agent and/or any member
of the Borrowing Group are to be made by or through the Agent. Each
Finance Party will notify the Agent of, and provide the Agent with a
copy of, any communication between such Finance Party, the Parent, the
Borrowers' Agent, any member of the Borrowing Group or any other of
the Finance Parties on any matter concerning the Facilities or the
Finance Documents.
16.6.2 The Agent will not be obliged to transmit to the other Finance Parties
any information in any way relating to any of the parties to the
Finance Documents which the Agent may have acquired otherwise than in
connection with the Facilities or the Finance Documents.
16.6.3 In acting as Agent for the Lenders, the Agent's banking division shall
be treated as a separate entity from any other of its divisions (or
similar unit of the Agent in any subsequent re-organisation),
subsidiaries or affiliates (the "Other Divisions") and, in the event
---------------
that the Agent should act for the Parent, any of the Parent's
subsidiaries, the Borrowers' Agent, any Borrower or any other members
of the Borrowing Group in a corporate finance or other advisory
capacity ("Advisory Capacity"), any information given by any of them
-----------------
to one of the Other Divisions is to be treated as confidential and
will not be available to the Finance Parties without the consent of
the person for whom the Agent is acting in an Advisory Capacity,
provided that:-
(a) the consent of that person shall not be required in relation to
any information which the Agent in its discretion determines
relates to an Event of Default or a Potential Event of Default or
in respect of which the Lenders have given a confidentiality
undertaking in a form satisfactory to the Agent and the
Borrowers' Agent or that person; and
(b) if representatives or employees of the Agent receive information
in relation to an Event of Default or a Potential Event of
Default while acting in an Advisory Capacity they will not be
obliged to disclose such information to representatives or
employees of the Agent in their capacity as agent bank, lead
arranger, co-arranger or administrative agent hereunder or to any
of the Lenders if to do so would breach any rule or regulation or
fiduciary duty imposed upon such persons.
16.7 Non-Reliance on Agent, Lead Arranger, Underwriters, Co-Arrangers or
-------------------------------------------------------------------
Security Agent
--------------
Each Lender confirms in favour of the Agent, Lead Arranger,
Underwriters, Co-Arrangers and Security Agent that it is (and will at
all times continue to be) solely responsible for making its own
independent investigation and appraisal of
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<PAGE>
the business, operations, financial condition, creditworthiness,
status and affairs of the Parent and the Borrowing Group and has not
relied, and will not at any time rely on the Agent or the Lead
Arranger or the Underwriters or the Co-Arrangers or the Security
Agent:-
16.7.1 to provide it with any information relating to the business,
operations, financial condition, creditworthiness, status and affairs
of the Parent or the Borrowing Group, whether coming into its
possession before or after the making of any Advance, except as
otherwise specifically provided herein; or
16.7.2 to check or enquire into the adequacy, accuracy or completeness of any
information provided by the Parent or Borrowing Group under or in
connection with this Agreement or any other Finance Document (whether
or not such information has been or is at any time circulated to it by
the Agent), including, without limitation, that contained in the
Information Memorandum; or
16.7.3 to assess or keep under review the business, operations, financial
condition, creditworthiness, status or affairs of the Parent or any
member of the Borrowing Group.
16.8 Indemnity to Agent, Lead Arranger, Underwriters, Co-Arrangers and
-----------------------------------------------------------------
Security Agent
--------------
16.8.1 Each Lender shall on demand fully indemnify the Agent, the Lead
Arranger, the Underwriters, the Co-Arrangers and the Security Agent
and their respective officers, employees and affiliates (collectively
the "Agency Indemnitees") in the proportion which its Relevant
------------------
Amount bears to the Relevant Amounts of all the Lenders at the
relevant time against any cost, expense or liability sustained or
incurred by any of the Agency Indemnitees in their respective
capacities as Agent, Lead Arranger, Underwriters, Co-Arrangers and
Security Agent as a consequence of or in connection with complying
with any instructions from the Lenders or the Majority Lenders (as the
case may be) or otherwise sustained or incurred in their respective
capacities as Agent, Lead Arranger, Underwriters, Co-Arrangers and
Security Agent in connection with the Finance Documents or its
respective duties, obligations and responsibilities under the Finance
Documents, except to the extent that they are sustained or incurred
principally as a result of the negligence or wilful misconduct of such
Agency Indemnitee as finally determined by a court having jurisdiction
(the determination not being subject to appeal).
16.8.2 The provisions of Clause 16.8.1 are without prejudice to the
obligations of the Borrowers to indemnify the Agency Indemnitees
pursuant to Clause 27 and the Borrowers will reimburse each Lender on
demand for any payment made by that Lender pursuant to Clause 16.8.1.
16.9 Termination and Resignation of Agency: Appointment of Successor
---------------------------------------------------------------
16.9.1 The Agent may resign its appointment at any time by giving notice to
the Lenders and the Borrowers' Agent.
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16.9.2 A successor Agent shall be selected:-
(a) by the retiring Agent (following consultation with the Borrowers'
Agent) nominating one of its Affiliates (as defined below) as
successor Agent in its notice of resignation; or
(b) if the retiring Agent makes no such nomination, by the Majority
Lenders nominating one of the Lenders as successor Agent
(following consultation with the Borrowers); or
(c) if the Majority Lenders have failed to nominate a successor Agent
within 30 days of the date of the retiring Agent's notice of
resignation, by the retiring Agent nominating a financial
institution of good standing to be the successor Agent.
For this purpose "Affiliate" in relation to the Agent means one of its
affiliates or holding companies (both as defined in the Companies Act
1985) or another affiliate of any of such holding companies.
16.9.3 The resignation of the retiring Agent and the appointment of the
successor Agent will only become effective upon the successor Agent
accepting its appointment as Agent in writing at which time:-
(a) the successor Agent will become bound by all the obligations of
the Agent and become entitled to all the rights, privileges,
powers, authorities and discretions of the Agent hereunder;
(b) the agency of the retiring Agent will terminate but without
prejudice to any liabilities which the retiring Agent may have
incurred or the indemnities to which the retiring Agent may be
entitled prior to the termination of its agency; and
(c) the retiring Agent will be discharged from any further liability
or obligation under or in connection with the Finance Documents
(save that the outgoing Agent shall pay to the successor a pro
rata proportion of the agency fee paid under Clause 11.1.1(c)).
16.9.4 The retiring Agent will co-operate with the successor Agent in order
to ensure that its functions are transferred to the successor Agent
without disruption to the service provided to the Borrowing Group and
the Lenders and will promptly make available to the successor Agent
such documents and records as have been maintained in connection with
this Agreement in order that the successor Agent is able to discharge
its functions.
16.9.5 The provisions of this Agreement will continue in effect for the
benefit of any retiring Agent in respect of any actions taken or
omitted to be taken by it or any event occurring before the
termination of its agency.
16.10 Resignation of Security Agent
-----------------------------
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The Security Agent may resign its appointment in exactly the same
manner as set out in relation to the Agent in Clause 16.9 above except
that the Security Agent's resignation shall not take effect until all
necessary deeds and documents have been entered into in order to
substitute its successor as holder of the security comprised in the
Security Documents.
16.11 Payments to Finance Parties
---------------------------
16.11.1 The Agent will account to the other Finance Parties for their due
proportion of all sums received by the Agent for such Finance
Parties, whether by way of repayment of principal or payment of
interest, commitment commission, fees or otherwise.
16.11.2 Save as otherwise specifically agreed between the Agent and the
other Finance Parties in the case of any arrangement fee, the
Agent may retain for its own use and benefit, and shall not be
liable to account to the other Finance Parties for all or any
part of, any sums received by it by way of agency fee or any
other fee or by way of reimbursement of expenses incurred by it.
16.12 Change of Office of Agent, Lead Arranger, Underwriters, Co-Arrangers
--------------------------------------------------------------------
or Security Agent
-----------------
The Agent, the Lead Arranger, any Underwriter, any Lead Manager or the
Security Agent may at any time and from time to time in their
respective sole discretion by written notice to the Borrowers' Agent
and each of the other Finance Parties designate a different office
from which their respective duties as Agent, Lead Arranger,
Underwriters or Co-Arrangers will thereafter be performed.
17. EVIDENCE OF INDEBTEDNESS
------------------------
In any proceedings relating to this Agreement, a statement as to any
amount due to any Finance Party under this Agreement which is
certified as being correct by an officer of the Agent and a statement
as to any amount due to a Finance Party under this Agreement which is
certified as being correct by an officer of that Finance Party shall
in the absence of manifest error, unless otherwise provided in this
Agreement, be prima facie evidence of the amount so due and that such
amount is in fact due and payable. In view of the determination of the
outstanding debt at the time enforcement takes place, the parties
agree that such debt, with respect to any Obligor hereunder organised
under the laws of the Kingdom of Spain, shall correspond to the
balance of specific memorandum accounts, one in each of the currencies
of the Advances hereunder, opened and held by the Agent and such
Lenders in the Obligors' names, in accordance with the terms of
Article 1435 of the Spanish Civil Procedure law ("Ley de
Enjuiciamiento Civil"), in which accounts all amounts owed by the
Obligors shall be debited, and all amounts paid by the Obligors shall
be credited. The settlement to determine the balance of the accounts
shall be performed
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exclusively by the Agent and such affected Lenders, if any, which
shall issue the appropriate certifications. Prior to starting the
enforcement of this Agreement, said certification acknowledging the
balance of the specific accounts shall be notified to the Obligors
through notarial means.
18. APPLICATION OF MONEYS
---------------------
If any sum paid or recovered in respect of the liabilities of the
members of the Borrowing Group under any of the Finance Documents is
less than the amount then due, the Agent shall apply that sum in the
following order:-
(a) first to any unpaid fees and reimbursement of unpaid expenses of
the Agent and the Security Agent;
(b) secondly to any unpaid fees and reimbursement of unpaid expenses
of the Lenders;
(c) thirdly to unpaid interest;
(d) fourthly to unpaid principal; and
(e) fifthly to other amounts due under the Finance Documents;
in each case (other than (a) and (b) and, to the extent of differences
in amounts of interest owing the PIBOR-Eligible Lenders and other
Lenders (c)) pro rata to the outstanding amounts owing to the Finance
--- ----
Parties under the Finance Documents taking into account any
applications under this Clause 18.
19. PRO RATA PAYMENTS
-----------------
19.1 If any amount owing by any member of the Borrowing Group under any
Finance Document to a Lender (the "Recovering Lender") is discharged
-----------------
by payment, set-off, use of cash collateral or any other manner other
than through the Agent in accordance with Clause 9.1.1 (such amount
being referred to in this Clause 19.1 as the "Recovery"), then:-
--------
(a) within two Business Days of receipt of the Recovery, the
Recovering Lender shall pay to the Agent an amount equal (or
equivalent) to such Recovery;
(b) the Agent shall treat such payment as if it were part of the
payment to be made by the Borrowers to the Lenders rateably in
accordance with their respective Commitments; and
(c) save for any receipt by the Recovering Lender as a result of the
operation of paragraph (b) above, as between the members of the
Borrowing Group and the Recovering Lender the Recovery shall be
treated and deemed as not having been paid.
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<PAGE>
19.2 Each Lender shall notify the Agent promptly of any such Recovery by
that Lender other than by payment through the Agent. If any Recovery
subsequently has to be wholly or partly refunded by the Recovering
Lender which paid an amount equal thereto to the Agent under Clause
19.1(a), each Lender to which any part of that amount was distributed
shall, on request from the Recovering Lender, repay to the Recovering
Lender such Lender's pro rata share of the amount which has to be
refunded by the Recovering Lender.
19.3 Each Lender shall on request supply to the Agent such information as
the Agent may from time to time request for the purpose of this Clause
19. Notwithstanding the foregoing provisions of this Clause 19, no
Recovering Lender shall be obliged to share with another person any
Recovery which it receives pursuant to legal proceedings taken by it
to recover any sums owing to it under the Finance Documents where such
other person has a legal right to, but does not, either join in such
proceedings or commence and diligently pursue separate proceedings to
enforce its rights in the same or another court (unless the
proceedings instituted by the Recovering Lender are instituted by it
without prior notice having been given to such other person through
the Agent).
19.4 Failure by any Recovering Lender to comply with any of the provisions
of this Clause 19 shall not release any other Recovering Lender from
any of its obligations or liabilities under this Clause 19.
19.5 Each party to this Agreement agrees to take all steps required of it
pursuant to Clause 19.1, and to use its reasonable endeavours to
obtain any consents or authorisations which may at any relevant time
be required, for any payment by it pursuant to this Clause 19.
19.6 The provisions of this Clause 19 shall not, and shall not be construed
so as to, constitute a charge by a Lender over all or any part of a
sum received or recovered by it in the circumstances mentioned in this
Clause 19.
20. SET-OFF
-------
Any Finance Party may without notice to any members of the Borrowing
Group, following the giving of notice by the Agent pursuant to Clause
14.2, combine, consolidate or merge all or any of the accounts of any
member of the Borrowing Group with, and liabilities to, that Finance
Party and may set off or transfer any sum standing to the credit of
any such accounts in or towards the satisfaction of any of the
liabilities of such member of the Borrowing Group to that Finance
Party under the Finance Documents (whether or not such liabilities are
then due for payment), and may do so notwithstanding that the balances
on such accounts and the liabilities may not be expressed in the same
currency, and each Finance Party is hereby authorised to effect any
necessary conversions at the Finance Party's own rate of exchange then
prevailing.
21. NOTICES
-------
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21.1 Save as specifically otherwise provided in this Agreement or agreed
with the Agent any notice, demand or other communication to be served
under this Agreement may be served upon any party hereto only by
posting by first class (or air mail) post or by delivering the same in
person or by courier or sending the same by facsimile transmission to
the party to be served at its address or facsimile number given in the
relevant Finance Document or at such other address or number as it may
from time to time notify in writing to the other parties hereto. As
regards the initial parties to this Agreement, their respective
addresses and numbers are set out under their respective names in
Schedule 1 or in the signature pages of this Agreement.
21.2 notice or demand served by first class (or air mail) post shall be
deemed duly served upon receipt, a notice or demand served in person
or by courier shall be deemed duly served when delivered and a notice
or demand sent by facsimile transmission shall be deemed to have been
served at the time of transmission unless served on a non-Business Day
or after 5.00 p.m. at the place in which the recipient is located in
which case it will be deemed served at 9.00 a.m. at the place in which
the recipient is located on the following Business Day.
21.3 In proving service of any notice or demand it will be sufficient to
prove, in the case of a letter, that such letter was properly stamped
or franked first class (or with appropriate air mail postage),
addressed and placed in the post, in the case of a notice or demand
served by courier that it was delivered by the courier company and, in
the case of a facsimile transmission, that such facsimile was duly
transmitted to a current facsimile number of the addressee at the
address referred to above and the transmission report indicates that
it was correctly sent and received.
22. NO IMPLIED WAIVERS
------------------
22.1 No failure or delay by the Agent, the Lead Arranger or any of the
Underwriters or Co-Arrangers or any other Finance Party in exercising
any right, power or privilege under any of the Finance Documents shall
operate as a waiver thereof nor shall any single or partial exercise
of any right, power or privilege preclude any further exercise thereof
or the exercise of any other right, power or privilege.
22.2 The rights and remedies provided in the Finance Documents are
cumulative and not exclusive of any rights and remedies provided by
law and all such rights and remedies howsoever arising will, save
where expressly provided to the contrary therein, be available to the
Finance Parties severally and any Finance Party shall be entitled to
commence proceedings in connection therewith in its own name.
23. INVALIDITY OF ANY PROVISION
---------------------------
If any of the provisions of this Agreement become invalid, illegal or
unenforceable in any respect under any law, the validity, legality and
enforceability of the remaining provisions shall not in any way be
affected or impaired.
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24. CONFIDENTIALITY
---------------
24.1 Each of the Finance Parties agrees with the Borrowers to hold
confidential all information which they acquire under or in connection
with the Finance Documents save to the extent they are required by law
or regulation, or are requested by any regulator with jurisdiction
over, or over any business of, the relevant Finance Party or any of
its subsidiaries or affiliates, or where necessary in connection with
litigation, to disclose the same or the same comes into the public
domain (otherwise than as a result of a breach of this Clause 24).
24.2 information in accordance with Clause 25.4 (Disclosure of
Information).
24.3 Except to the extent required by law, all public announcements in
relation to this Agreement shall be made through the Agent. The Agent
will not make any written public announcement in relation to this
Agreement without first having the text of the announcement approved
by the Parent (such approval not to be unreasonably withheld or
delayed).
25. CHANGES TO PARTIES
------------------
25.1 Assignment by the Borrowers, Etc.
---------------------------------
None of the members of the Borrowing Group may assign or transfer all
or part of their rights or obligations under this Agreement or any of
the other Finance Documents, except that a Borrower may transfer its
rights and obligations in respect of the Tranche A Term Facility or
Tranche B Multicurrency Term Facility upon satisfaction of the
conditions set forth in the definition of "Permitted Assumed Debt".
25.2 Lenders
-------
25.2.1 A Lender (a "Transferor") may at any time assign or otherwise transfer
----------
(together, "Transfer") all or any part of its rights or obligations
--------
under the Finance Documents to any person (a "Transferee"), subject to
----------
the other terms of this Clause 25, provided that unless the Borrowers'
--------
Agent and the Agent otherwise agree, any Transfer by a Transferor (i)
in relation to all Facilities other than a WCP Facility, must, to the
extent it has rights and/or obligations in respect of one or more
Facility, be in relation to both Facilities and any Transfer shall be
for the same proportion of the Transferor's rights and obligations in
each Facility, and (ii) in relation to a WCP Facility must be in
respect of that entire WCP Facility and that Transferor's entire WCP
Commitment thereunder.
25.2.2 A Transfer of obligations of the Lenders shall only be effective if
made in accordance with Clause 25.3 (Substitution Provisions) or if
the Transferee has, prior to the Transfer taking effect, confirmed in
writing to the Agent (acting on behalf of all the other Lenders) and
to the Borrowers that it undertakes to be bound by the terms of each
of the Finance Documents binding upon it as a Lender in form and
substance satisfactory to the Agent. On any such Transfer
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<PAGE>
being made, the Transferor shall be relieved of its obligations to the
extent that they are transferred to the Transferee.
25.3 Substitution Provisions
-----------------------
25.3.1 A Transferor may transfer all or any of its rights and obligations
under the Finance Documents to a Transferee by means of a novation
effected by the Agent executing a Transfer Certificate which has been
duly completed and signed on behalf of both the Transferee and the
Transferor. For the avoidance of doubt, the Agent shall not be obliged
to execute a Transfer Certificate unless the identity of the
Transferee named therein is satisfactory to the Agent, and nothing in
this Clause 25.3.1 shall be deemed to authorise the Agent to sign a
Transfer Certificate which has not been signed on behalf of a
Transferee and Transferor.
25.3.2 On the later of (i) the date specified in the Transfer Certificate as
being the date on or as from which the substitution under this Clause
25.3 is to take effect and (ii) the date on which the Agent executes
the Transfer Certificate, the following shall occur:-
(a) to the extent that in the Transfer Certificate the Transferor
seeks to transfer its rights and obligations under the Finance
Documents, the members of the Borrowing Group and the Transferor
shall each be released from further obligations to each other
under the Finance Documents (and the appropriate reduction shall
be made to the Commitment of the Transferor) and their respective
rights against each other shall be cancelled (such rights and
obligations beings referred to in this Clause 25.3.2 as
"Discharged Rights and Obligations");
---------------------------------
(b) the members of the Borrowing Group and the Transferee shall each
assume obligations towards each other and acquire rights against
each other which differ from the Discharged Rights and
Obligations only in so far as the members of the Borrowing Group
and such Transferee have assumed and acquired the same in place
of the members of the Borrowing Group and the Transferor;
(c) the Agent, the Security Agent, the Lead Arranger, the
Underwriters, the Co-Arrangers, the Transferee and the other
Lenders shall acquire the same rights and assume the same
obligations between themselves as they would have acquired and
assumed had the Transferee been an original party hereto as a
Lender with the rights and obligations acquired or assumed by it
as a result of the novation; and
(d) on the date upon which such transfer takes effect, the Transferee
shall pay to the Agent for its own account a transfer fee of GBP
500, except that no fee shall be payable in respect of a transfer
in respect of which the Original Tranche A Term Lender, Original
Tranche B Multicurrency Term Lender or Original Tranche B
Multicurrency Revolving Lender is the Transferor and which occurs
not later than six months after the date of this Agreement. For
the avoidance of doubt, no member of the Borrowing
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<PAGE>
Group shall be liable for the costs of preparation of any
Transfer Certificate or for the fee referred to in this Clause
25.3.2(d).
25.3.3 Nothing in this Agreement or any other Finance Document shall oblige a
Transferor or cause a Transferor to be liable:-
(a) to accept a re-assignment or re-transfer from a Transferee of any
of the rights or obligations assigned, transferred or novated
pursuant to this Clause 25; or
(b) to support any losses incurred by a Transferee by reason of the
non-performance by the Parent or any member of the Borrowing
Group of their obligations under any of the Finance Documents.
25.3.4 Each of the parties hereto (other than the Transferor and the
Transferee) authorises the Agent to execute on its behalf any Transfer
Certificate which has been duly completed in accordance with this
Clause 25.3 and executed on behalf of each of the Transferor and the
Transferee.
25.3.5 The Agent shall promptly notify the other parties hereto of the
receipt and execution by it on their behalf of any Transfer
Certificate and shall supply a copy of the Transfer Certificate to
each of the Borrowers.
25.3.6 For the purposes of the French pledge of the shares of CEAC and any
other French assets pledged under the Security Documents, it is hereby
agreed by the Transferor that in the event of an assignment or a
transfer by any Transferor of all or any part of its rights and
obligations under the Finance Documents to a Transferee by way of a
novation as provided for in Clause 25.3.1 hereabove, such Transferor
shall preserve all its rights under such pledge as expressly permitted
under Article 1278 of the French Civil Code so that the security
interest created by the pledge shall be automatically transferred to
the Transferee.
25.4 Disclosure of Information
-------------------------
Each Lender may disclose to a proposed assignee or transferee or any
sub-participant, risk participant or other participant proposing to
enter or having entered into a contract with such Lender whose
identity has been approved by the Borrowers' Agent (such approval not
to be unreasonably withheld or delayed) regarding the Finance
Documents any information in the possession of such Lender relating to
the Borrowing Group (and any member of it) as it sees fit subject to
such person agreeing in writing to be bound by the confidentiality
provisions set out in Clause 24.
25.5 The Agent and the Reference Lenders
-----------------------------------
25.5.1 Changes to the Agent and the office through which the Agent acts may
be effected pursuant to Clauses 16.9 and 16.11 respectively.
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25.5.2 If a Reference Lender ceases to be one of the Lenders or, if a
Reference Lender is not itself a Lender but an affiliate of a Lender
or that Reference Lender was, but ceases to be, one of the Lenders,
then:-
(a) the Lender or, as the case may be, affiliate of the Lender
concerned shall cease to be a Reference Lender; and
(b) the Agent shall in consultation with the Borrowers' Agent appoint
another Lender or an affiliate of another Lender to be a
Reference Lender.
26. LENDER DECISIONS
----------------
26.1 Subject to Clauses 26.2 and 26.3, any provision of this Agreement or
any of the other Finance Documents may be amended, waived, varied or
modified with the agreement of the Majority Lenders.
26.2 The following matters shall require the unanimous agreement of all of
the Lenders:-
26.2.1 any increase in any Commitment of any Lender;
26.2.2 any extension of any scheduled date for payment of any sum due, owing
or payable to any Lender;
26.2.3 any reduction in the amount of any payment of principal, interest,
fees or commissions or other amounts payable hereunder by any party;
26.2.4 any amendment, variation or modification of this Clause 26, Clause 19
(Pro Rata Payments), Clause 20 (Set-off), Clause 25.1 (Assignment by
the Borrowers, Etc.) or to the definition of Majority Lenders;
26.2.5 any matter which, by the terms of this Agreement as at the date
hereof, is stated to be subject to the consent of all Lenders;
26.3 Any amendment, waiver, variation or modification of Clause 16 (The
Agent and the other Finance Parties) may not be effected without the
agreement of the Agent (giving effect to Clause 16.1.4).
26.4 Subject to any provision of the Finance Documents entitling or
obliging the Agent or the Security Agent to grant releases or permit
any disposal to take place, any question which relates to the release
or material variation of any security held by the Security Agent shall
require the agreement of the Majority Lenders, failing which no such
release or variation may be effected.
27. INDEMNITIES
-----------
27.1 General Indemnity and Breakage Costs
------------------------------------
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<PAGE>
The Borrowers will fully indemnify each of the Finance Parties, and
their respective officers, employees, subsidiaries and affiliates
(collectively the "Finance Indemnitees") from and against any expense,
-------------------
loss, damage or liability (including without limitation any arising
from any actual or alleged breach of any Environmental Laws) which any
of the Finance Indemnitees may incur as a consequence of or in
connection with (i) the provision and/or Syndication of the Facilities
or the use of proceeds thereof (including the distribution of the
Information Memorandum), or (ii) the execution, delivery or
performance of any of the Finance Documents, other than, in the case
of a Finance Indemnitee, any such expense, loss, damage or liability
which is finally determined by a court having jurisdiction (the
determination not being subject to appeal) to have resulted
principally from the negligence or wilful misconduct of such Finance
Indemnitee or which is otherwise reimbursed by a member of the
Borrowing Group under the Finance Documents. The Borrowers will
further fully indemnify each of the Finance Parties from and against
any expense, loss, damage or liability which they may incur as a
consequence of any failure to pay any sum due pursuant to the Finance
Documents when due, or any failure to borrow when obliged to do so in
accordance with this Agreement (including without limitation failure
to satisfy any conditions precedent to such borrowing) or repaying an
Advance otherwise than on the last day of an Interest Period or
otherwise in connection with a breach by the Parent or any member of
the Borrowing Group of this Agreement or of any Finance Document,
except where it is otherwise reimbursed by a member of the Borrowing
Group under the Finance Documents. Without prejudice to its
generality, the indemnity in the preceding sentence extends to any
interest, fees or other sums whatsoever paid or payable on account of
any funds borrowed in order to carry any amount which a member of the
Borrowing Group fails to pay in breach of this Agreement and to any
loss (including loss of profit), premium, penalty or expenses which
may be incurred in liquidating or employing deposits from third
parties acquired to make, maintain or fund outstanding Advances or any
other amount due or to become due under this Agreement.
27.2 Currency Indemnity
------------------
Without prejudice to Clause 27.1, if:-
27.2.1 any amount payable by any Obligor under or in connection with any
Finance Document is received by any Finance Party in a currency (the
"Payment Currency") other than that agreed in the relevant Finance
----------------
Document (the "Agreed Currency"), whether as a result of any judgement
---------------
or order or the enforcement thereof, the liquidation of that member or
otherwise; and
27.2.2 the amount produced by converting the Payment Currency so received
into the Agreed Currency is less than the relevant amount of the
Agreed Currency; then the relevant Obligor shall, as an independent
obligation, indemnify the relevant Finance Party for the deficiency
and any loss sustained as a result. Such conversion shall be made at
such prevailing rate of exchange, on such date and in such market as
is determined by the relevant Finance Party as being most
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<PAGE>
appropriate for the conversion. The relevant Obligor shall in addition
pay the costs of the conversion as an independent and joint and
several obligation.
27.3 Waiver
------
Each Obligor waives any right it may have in any jurisdiction to pay
any amount under any Finance Document in a currency other than that in
which it is expressed to be payable in the relevant Finance Document.
28. CERTIFICATES CONCLUSIVE
-----------------------
A certificate, determination, notification or opinion of a Finance
Party, the Majority Lenders or any Lender provided for in any Finance
Document shall be conclusive save in the case of manifest error.
29. GOVERNING LAW
-------------
This Agreement shall be governed by and construed in accordance with
the laws of England.
30. JURISDICTION
------------
30.1 Submission
----------
For the benefit of each Finance Party, each Obligor agrees that the
courts of France and of England shall have jurisdiction to settle any
disputes in connection with any Finance Documents and accordingly
submits to the jurisdiction of both the French courts and the English
courts.
30.2 Service of Process
------------------
(a) Without prejudice to any other mode of service, each Obligor:-
(i) irrevocably appoints (x) CEAC, 5-7 allee des Pierres
Mayettes, 92636 Gennevilliers, France, as its agent for
service of process relating to any proceedings before the
French courts in connection with any Finance Document,
and (y) Euro Exide, Exide House, Atlantic Square, Station
Road, Witham, Essex CM8 EXTOL, England, as its agent for
service of process relating to any proceedings before the
English courts in connection with any Finance Document;
(ii) agrees that failure by a process agent to notify it of
the process will not invalidate the proceedings
concerned; and
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(iii) consents to the service of process relating to any such
proceedings by prepaid posting of a copy of the process
to its address for notices to it from time to time under
Clause 21 (Notices).
(b) Each of CEAC and Euro Exide irrevocably accepts its appointment
as agent for service of process under the Finance Documents as
set forth in sub-clause (a).
30.3 Forum Convenience and Enforcement Abroad
----------------------------------------
Each Obligor:-
(a) waives objection to the French and English courts on grounds of
inconvenient forum or otherwise as regards proceedings in
connection with a Finance Document; and
(b) agrees that a judgement or order of a French court or English
court in connection with a Finance Document is (subject to rights
of appeal before the French courts (in the case of the judgement
of a French court) or English courts (in the case of the
judgement of an English court)) conclusive and binding on it and
may be enforced against it in the courts of any other
jurisdiction.
30.4 Non-Exclusivity
---------------
Nothing in this Clause 30 limits the right of a Finance Party to bring
proceedings against any Obligor in connection with any Finance
Document:-
(a) in any other court of competent jurisdiction; or
(b) concurrently in more than one jurisdiction.
31. COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts and all
of such counterparts taken together shall be deemed to constitute one
and the same instrument.
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COMPAGNIE EUROPEENNE D'ACCUMULATEURS S.A.
By: /s/ Eric Francey
----------------
Its: Chief Financial Officer
-----------------------
EURO EXIDE CORPORATION LIMITED
By: /s/ Eric Francey
----------------
Its: Agent
-----
EXIDE HOLDING EUROPE
By:/s/ Eric Francey
----------------
Its: Finance Director
----------------
SOCIEDAD ESPANOLA DEL ACUMULADOR TUDOR S.A.
By: /s/ Santiago Ramirez
--------------------
Its: Chief Executive Officer
-----------------------
BANKERS TRUST INTERNATIONAL PLC, in its capacity as Lead Arranger
By: /s/ Robert Willoughby
----------------------
Its: Vice President
--------------
BANKERS TRUST COMPANY, in its capacities as Underwriter, a Lender, Agent
and Security Agent
By: /s/ Robert Willoughby
---------------------
Its: Vice President
--------------
150
<PAGE>
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, in its capacities
as Underwriter and a Lender
By: /s/ Steve Johnson
-----------------
Its: Vice President
--------------
BANK OF AMERICA INTERNATIONAL LIMITED, in its capacity as a Co-Arranger
By: /s/ Steve Johnson
-----------------
Its: Vice President
--------------
BANK OF MONTREAL, in its capacities as Underwriter, Co-Arranger and a
Lender
By: /s/ Anthony Ebdon
-----------------
Its: Director
--------
CITIBANK INTERNATIONAL PLC, in its capacities as Underwriter and a Co-
Arranger
By: /s/ Iain Fisher
---------------
Its: Vice President
--------------
CITIBANK, N.A., in its capacity as a Lender
By: /s/ Robert Kosian /s/ Dirk Davidson
----------------- -----------------
Its: Attorney-in-Fact Attorney-in-Fact
------------------ ----------------
BANCA DI ROMA S.P.A. - SUCCURSALE DE PARIS
By: /s/ J.M. Vincentelli
--------------------
Its: Sous-Director
-------------
151
<PAGE>
By: /s/ A. Agnolucci
----------------
Its: Director
--------
BANCA NAZIONALE DEL LAVORO SPA - SUCCURSALE DE PARIS
By: /s/ Pietro Camillo Bonacchi
---------------------------
Its: Premier Fonde de Pouvoir
------------------------
By: /s/ Francesco Mattel
--------------------
Its: Directeur General
-----------------
BANCO ESPIRITO SANTO E COMERCIAL DE LISBOA
By: /s/ H.F.R. Stewart
------------------
Its: Senior Manager
--------------
By: /s/ M. Wright
--------------
Its: Deputy Manager
--------------
BANCO POPOLARE DI BERGAMO - CREDIT VARESINO SCRL
By: /s/ Giorgio Frigeri
-------------------
Its: Chief Executive
---------------
BANQUE NATIONALE DE PARIS
By: /s/ Bruno Tassart
-----------------
Its: First Vice President
--------------------
152
<PAGE>
DE NATIONALE INVESTERINGSBANK N.V. - LONDON BRANCH
By: /s/ Jos Schoolmeesters
----------------------
Its: General Manager
---------------
By: /s/ Gerard Burgers
------------------
Its: Senior Credit Manager
---------------------
INSTITUTO BANCARIO SAN PAOLO DI TORINO S.P.A. - LONDON BRANCH
By: /s/ Carlo Persico
-----------------
Its: Head of Corporate Banking
-------------------------
By: /s/ C.C.E. Stamford
-------------------
Its: Manager, Corporate Banking
--------------------------
KREDIETBANK N.V. - SUCURSALE FRANCAISE
By: /s/ H. Francois - Marsal
------------------------
Its: responsable du Departement Engagements et Credits
-------------------------------------------------
By: /s/ G. Claernan
---------------
Its: responsable - adjoint du Departements Engagement et Credits
-----------------------------------------------------------
OSTERREICHISCHE INVESTITIONSKREDIT AG
By: /s/ Walter Anscheringer
-----------------------
Its: Assistant General Manager
-------------------------
By: /s/ Helmut Hinek
----------------
Its: Manager
-------
153
<PAGE>
THE SUMITOMO TRUST & BANKING CO., LTD.
By: /s/ S.E. Williams
-----------------
Its: Assistant General Manager
-------------------------
UNICREDIT
By: /s/ Laurent Gicquel
-------------------
Its: Fonde de Pouvoirs
-----------------
CREDIT LYONNAIS
By: /s/ Jean Louis Joubert
----------------------
Its: Directeur
---------
CREDIT LYONNAIS ESPANA S.A.
By: /s/ M. Bernard Roy
------------------
Its: Director General Adjunto
------------------------
154
<PAGE>
SCHEDULE 1
<TABLE>
<CAPTION>
Names and Addresses Tranche A Tranche B Revolving
- ------------------- --------- --------- ---------
of Finance Parties Term Loan Term Loan Credit
- ------------------ --------- --------- -------
Commitment Commitment Commitment
---------- ---------- ----------
FF FF FF
<S> <C> <C> <C>
BANKERS TRUST COMPANY 49,548,275.34 195,202,497.81 294,560,297.87
1 Appold Street
Broadgate
London EC2A 2HE
Attention: Barry Jeffries/Philip Pentney
Tel: + 44 171 982 2500
Fax: + 44 171 982 2271
BANK OF MONTREAL 30,761,121.16 121,187,824.31 182,872,258.44
2nd Floor
11 Walbrook
London EC4N 8ED
Documentation/Credit Issues
- ---------------------------
Attention: Tony Ebdon, Director
Tel: + 44 171 236 1010 ext 3460
Fax: + 44 171 248 5090
Drawdown Requests:
- ------------------
Attention: David I. Binning
Manager Loan & Treasury Liaison
Tel: + 44 171 236 1010 ext 3313
Fax: + 44 171 236 2821
Copy to: Vera De Costa
Supervisor, LLO
234 Simcoe Street
3rd Floor, T.O.S.C.
Toronto, Ontario
Tel: 00 1 416 867 5185
Fax: 00 1 416 867 4116
CITIBANK, N.A. 30,761,121.16 121,187,824.31 182,872,258.44
Structured Finance
Cottons Centre, 5th Floor
Hays Lane
London SE1 2QT
Attention: Steffen Andersen / Bill Ross
Tel: + 44 171 234 2518/2389
Fax: + 44 171 234 2389
</TABLE>
S1-1
<PAGE>
<TABLE>
<CAPTION>
Names and Addresses Tranche A Tranche B Revolving
- ------------------- --------- --------- ---------
of Finance Parties Term Loan Term Loan Credit
- ------------------ --------- --------- -------
Commitment Commitment Commitment
---------- ---------- ----------
FF FF FF
<S> <C> <C> <C>
BANK OF AMERICA
NATIONAL TRUST AND
SAVINGS ASSOCIATION 30,761,121.16 121,187,824.31 182,872,258.44
Bank of America House
1 Alie Street
London E1 8DE
Documentation/Credit Issues
- ---------------------------
Attention: Steve Johnson
Tel: + 44 171 634 4385
Fax: + 44 171 634 4155
Drawdown Requests
- -----------------
Attention: Joy Baker
Loan Services Department
Tel: + 44 181 313 2000 Extn 2503
Fax: + 44 181 313 2740
BANQUE NATIONALE DE PARIS 18,374,655.37 72,389,575.63 109,235,769.00
BNP Levallois Front de Seine
41, rue Baudin - BP9
92301 Levallois Perret Cedex
Administration
- --------------
Chantal Baudon / Mme. Cajon / Mme. Rodrigo
Tel: + 33 1 40 89 83 10 / 40 89 83 30
Fax: + 33 1 40 89 83 09 / 47 58 09 13
Credit
- ------
Bruno Tassart / Robin Burnett / Benoit Weill
Tel: + 44 171 548 9369 / 9384 / 1332
Fax: + 44 171 548 9499 / 9513
ISTITUTO BANCARIO SAN PAOLO
DI TORINO S.P.A.
- LONDON BRANCH 4,593,663.84 18,097,393.91 27,308,942.25
15 Carter Lane
London EC4 5SP
Attention: Alan Cleaver
Tel: + 44 171 214 8000
Fax: + 44 171 236 2698
</TABLE>
S1-2
<PAGE>
<TABLE>
<CAPTION>
Names and Addresses Tranche A Tranche B Revolving
- ------------------- --------- --------- ---------
of Finance Parties Term Loan Term Loan Credit
- ------------------ --------- --------- -------
Commitment Commitment Commitment
---------- ---------- ----------
FF FF FF
<S> <C> <C> <C>
BANCO ESPIRITO SANTO E
COMERCIAL DE LISBOA 4,593,663.84 18,097,393.91 27,308,942.25
33 Queen Street
London EC4R 1ES
Administration
- --------------
Mrs. M. Wright
Credit
- ------
Mr. G. Harris
Tel: + 44 171 332 4300
Fax: + 44 171 332 4340
DE NATIONALE
INVESTERINGSBANK N.V.
- LONDON BRANCH 6,890,495.76 27,146,090.86 40,963,413.38
22 Eastcheap
London EC3M 1EU
Administration
- --------------
S.M. Fish
Credit
- ------
Gerard Burger
Tel: + 44 171 895 0000
Fax: + 44 171 929 4009
BANCA DI ROMA S.P.A.
- SUCCURSALE DE PARIS 4,593,663.84 18,097,393.91 27,308,942.25
21 Avenue George V
75008 Paris
Credit
- ------
Mr. Jose-Marc Vincentelli
Tel: + 33 1 49 52 69 51
Fax: + 33 1 49 52 69 84
</TABLE>
S1-3
<PAGE>
<TABLE>
<CAPTION>
Names and Addresses Tranche A Tranche B Revolving
- ------------------- --------- --------- ---------
of Finance Parties Term Loan Term Loan Credit
- ------------------ --------- --------- -------
Commitment Commitment Commitment
---------- ---------- ----------
FF FF FF
<S> <C> <C> <C>
Operations
- ----------
Ms. Claude Bakhache
Tel: + 33 1 49 52 69 75
Fax: + 33 1 49 52 69 84
BANCA NAZIONALE DEL LAVORO SPA
- SUCCURSALE DE PARIS 4,593,663.84 18,097,393.91 27,308,942.25
26 Avenue Des Champs-Elysees
75008 Paris
Attention: Mr. Pietro Bonacchi /
Miss Christine De Bo
Tel: + 33 1 40 76 42 08 / 40 76 42 25
Fax: + 33 1 42 25 66 08
BANCA POPOLARE DI BERGAMO
- CREDIT VARESINO SCRL 4,593,663.84 18,097,393.91 27,308,942.25
Rue Pierre Corneille, 115
Lyon
France
Attention: Mr. Michele Gambal /
Mr. Jean-Jacques Marie
Tel: + 33 78 629 869
Fax: + 33 78 628 155
KREDIETBANK N.V.
- SUCURSALE FRANCAISE 6,890,495.76 27,146,090.86 40,963,413.38
9 Grand'Rue - BP 227
59054 - ROUBAIX Cedex 1
Credit
- ------
Mr. Hubert Francois-Marsal
Tel: + 33 20 89 50 09
Operations
- ----------
Mr. Jean-Christophe Lafon
Tel: + 33 20 89 50 04
Mr. Christian Ryckewaert
Tel: + 33 20 89 50 36
Fax: + 33 20 73 39 23
</TABLE>
S1-4
<PAGE>
<TABLE>
<CAPTION>
Names and Addresses Tranche A Tranche B Revolving
- ------------------- --------- --------- ---------
of Finance Parties Term Loan Term Loan Credit
- ------------------ --------- --------- -------
Commitment Commitment Commitment
---------- ---------- ----------
FF FF FF
<S> <C> <C> <C>
OSTERREICHISCHE
INVESTITIONSKREDIT AG 2,296,831.92 9,048,696.95 13,654,471.13
Renngasse 10
A-103 Vienna
Austria
Credit Matters
- --------------
Johannes Wundsam
Tel: + 43 1 53 13 55 77
Fax: + 43 1 53 13 59 09
Treasury Matters
- ----------------
Settlement Department
Tel: + 43 1 53 13 51 62
Fax: + 43 1 53 13 59 79
THE SUMITOMO TRUST &
BANKING CO., LTD. 6,890,495.76 27,146,090.86 40,963,413.38
155 Bishopsgate
London EC2M 3XU
Administration
- --------------
Lindsay Pyne
Credit
- ------
John Barker
Tel: + 44 171 945 7000
Fax: + 44 171 945 7177
UNICREDIT 11,484,159.61 45,243,484.77 68,272,355.63
Union de Credit pour le Developpment
Regional - Unicredit
128/130 Boulevard Raspall
75006 Paris
Attention: Colette de Bertier
Tel: + 33 1 43 23 22 58
Fax: + 33 1 43 23 59 96
</TABLE>
S1-5
<PAGE>
<TABLE>
<CAPTION>
Names and Addresses Tranche A Tranche B Revolving
- ------------------- --------- --------- ---------
of Finance Parties Term Loan Term Loan Credit
- ------------------ --------- --------- -------
Commitment Commitment Commitment
---------- ---------- ----------
FF FF FF
<S> <C> <C> <C>
CREDIT LYONNAIS 12,860,511.16 50,665,818.01 76,454,648.95
Credit Lyonnais la Defense
Attention: Mr. D'Avout / Mr. Adler
Tel: + 33 1 49 06 35 07
Fax: + 33 1 49 07 42 31
CREDIT LYONNAIS ESPANA, S.A. 5,512,396.61 21,716,872.69 32,770,730.70
Paseo de la Castellana, 35
28046 - Madrid
Spain
Attention: Maria Real de Asua Guinea
Tel: + 34 1 349 2000
Fax: + 34 1 308 6392
</TABLE>
Names and Addresses
- -------------------
of the Lead Borrowers
- ---------------------
COMPAGNIE EUROPEENNE
D'ACCUMULATEURS S.A.
5-7 allee des Pierres Mayettes
92636 Gennevilliers
France
Attention: President
Tel: + 33 1 41 21 23 00
Fax: + 33 1 41 21 24 05
with a copy to Eric Francey
EURO EXIDE CORPORATION LIMITED
Exide House
24 Atlantic Square
Station Road
Witham, Essex CM8 2TL
England
Attention: Mike Butterworth
Tel: + 44 1376 510 100
Fax: + 44 1376 510 110
S1-6
<PAGE>
Names and Addresses
- -------------------
of the Lead Borrowers
- ---------------------
EXIDE HOLDINGS FRANCE S.A.
5-7 allee des Pierres Mayettes
92636 Gennevilliers
France
Attention: President
Tel: + 33 1 41 21 23 00
Fax: + 33 1 41 21 24 05
with a copy to Eric Francey
SOCIEDAD ESPANOLA DEL
ACUMULADOR TUDOR S.A.
Condesa de Venadito, 1
28027 Madrid
Spain
Attention: Eduardo Garnica
Tel: + 34 1 566 4800
Fax: + 34 1 326 0768
S1-7
<PAGE>
SCHEDULE 2
----------
Repayment Schedule
------------------
<TABLE>
<CAPTION>
Tranche B Multi-
Tranche A Term Loan currency Term Loan
Repayment Date Amount (FF)
- -------------- --------------------
<S> <C> <C>
November 30, 1996 30,000,000 50,000,000
May 31, 1997 30,000,000 56,000,000
November 30, 1997 25,000,000 56,000,000
May 31, 1998 30,000,000 66,000,000
November 30, 1998 21,000,000 66,000,000
May 31, 1999 29,000,000 66,000,000
November 30, 1999 21,000,000 66,000,000
May 31, 2000 29,000,000 66,000,000
November 30, 2000 21,000,000 66,000,000
May 31, 2001 0 93,000,000
November 30, 2001 0 93,000,000
May 31, 2002 0 93,000,000
November 30, 2002 0 93,000,000
</TABLE>
; provided that the instalments specified herein shall be reduced in inverse
order of maturity by an amount equal to the excess of (i) the Tranche A Term
Commitment or the Tranche B Multicurrency Term Commitment, as the case may be,
over (ii) the respective amounts drawn thereunder on the Initial Drawdown Date.
S2-1
<PAGE>
SCHEDULE 3
<TABLE>
<CAPTION>
Country of
Borrower Organisation
- -------------------------------------------------------------------------------
<S> <C>
CEAC GROUP:
Accumulateurs Tudor S.A. Belgium
CEAC France
Exide Holding France S.A. (Tranche A France
Borrower only)
Sonnenschein Germany
Compagnia Generale Accumulatori S.p.a. Italy
SINAC S.r.l. Italy
Fulmen Iberica S.A. Spain
CMP Batteries Limited England
CMP Batterijen B.V. The Netherlands
TUDOR GROUP:
Anker Tudor Batterie GmbH Germany
Elbak Batteriewerke GmbH Austria
Hagen Batterie, A.G. Germany
Manos Verwaltungsgesellschaft GmbH Germany
Industria Composizioni Stampate S.P.A Italy
T.S. Batterie S.r.l. Italy
Tudor Sonnak A.S. Norway
Sociedade Portuguesa do Acumulador Tudor
S.A. Portugal
Electro Mercantil Industrial S.A. Spain
Gaztambide S.A. Spain
Metalurgica de Gormaz, S.A. Spain
Tudor Spain
Terrenos y Construcciones S.A. Spain
Tudor AB Sweden
</TABLE>
S3-1
<PAGE>
<TABLE>
Country of
Borrower Organisation
- -------------------------------------------------------------------------------
<S> <C>
Hagen Batterijen B.V. The Netherlands
Mercolec Tudor B.V. The Netherlands
EURO EXIDE GROUP:
Euro Exide United Kingdom
Exide Batteries Limited United Kingdom
B.I.G. Batteries Limited United Kingdom
Exide (Dagenham) Limited United Kingdom
</TABLE>
<TABLE>
<CAPTION>
GUARANTOR COUNTRY OF
- ---------
ORGANISATION
------------
<S> <C>
Exide Holdings France S.A. France
CEAC GROUP
CEAC France
Generale D'Affinerie, De Services et De
Transformation France
SINAC S.r.l. Italy
Compagnia Generale Accumulatori S.p.a. Italy
Industria Composizioni Stampate S.P.A. Italy
Accumulateurs Tudor S.A. Belgium
Fulmen Tudor Service S.A. Belgium
CMP Batterijen N.V. Belgium
CMP Batterijen B.V. The Netherlands
Fulmen Iberica S.A. Spain
CMP Batterier A/S Denmark
Accumulatorenfabrik Sonnenschein GmbH Germany
Centra S.A. Poland
</TABLE>
S3-2
<PAGE>
GUARANTOR COUNTRY OF
---------
ORGANISATION
------------
[S] [C]
TUDOR GROUP
Tudor Spain
Metalurgica De Gormaz, S.A. Spain
Electro Mercantil Industrial S.A. Spain
Gaztambide S.A. Spain
Terrenos y Construcciones S.A. Spain
Manos Verwaltungsgesellschaft GmbH Germany
Anker Tudor Batterie GmbH Germany
Tudor AB Sweden
Sociedade Portuguesa do Acumulador Tudor S.A. Portugal
Hagen Batterijen B.V. The Netherlands
Mercolec Tudor B.V. The Netherlands
T.S. Batterie S.r.l. Italy
Lyac Power A/S Denmark
EURO EXIDE GROUP
Euro Exide England
Exide (Dagenham) Limited England
B.I.G. Batteries Limited England
CMP Batteries Limited England
Exide Batteries Limited England
Fulmen UK Limited England
Gemala Sweden, AB Sweden
S3-3
<PAGE>
SCHEDULE 4
PART A
Form of Drawdown Request in respect of Cash Advance
---------------------------------------------------
To: [Insert details of Agent's administrations department]
Attention:[____]
FF 2,569,000,000 facilities agreement dated 30th November, 1995
- ---------------------------------------------------------------
We refer to the above agreement between, inter alia, ourselves, the Lead
Arranger, the Underwriters, the Co-Arrangers, the Lenders described therein and
yourselves as Agent (the "Facilities Agreement", which expression includes any
amendments or supplements thereto or restatements thereof). Terms defined in the
Facilities Agreement have the same meaning in this notice.
Pursuant to Clause 5.1 of the Facilities Agreement, we hereby give you notice of
the following proposed drawing of a Cash Advance:
(a) Borrower:
(b) after giving effect to the Cash Advance, the Gearing Ratio for the
[insert name of relevant Borrowing Sub-Group] shall not be greater
than 1.25:1.00
(c) Facility: [Tranche A Term/Tranche B Multicurrency Term/Tranche B
Multicurrency Revolving] Facility
(d) Proposed Drawdown Date (a Business Day):
(e) Currency:
S4-1
<PAGE>
(f) Amount:
(g) Duration of first Interest Period:
(h) Payment instructions:
(i) Purpose:
We confirm that (i) no Event of Default or Potential Event of Default has
occurred and is continuing unremedied or unwaived or will occur as a result of
making this Advance, (ii) no Event of Default or Default (as defined in the
Indentures) has ocurred and is continuing unremedied or unwaived or will occur
as a result of the making of this Advance and, (iii) each of the representations
and warranties required to be made in accordance with Clause 13 of the
Facilities Agreement is true and accurate on the date hereof.
[In case of an extension of credit requested by or on behalf of
Accumulatorenfabrik Sonnenschein GmbH or any other Borrower incorporated in
Germany (the "Drawdown Request Borrower"), we hereby certify that, after the
making of such extension of credit, the aggregate amount which is utilised under
the Facilities to or by the Drawdown Request Borrower will be a level of
indebtedness which the Drawdown Request Borrower can reasonably be expected to
repay without receiving any financial support (other than from its
subsidiaries).]
Dated 19[_]
[Borrowers' Agent]
By: .....................
S4-2
<PAGE>
Notes
- -----
(1) No more than ten separate Revolving Credit Advances may be outstanding
at any one time.
(2) Currencies other than USD, BF, DEM, ESP, FF, GBP and ITL may not be
requested unless the Agent has confirmed in writing to the Borrowers'
Agent that such other currency is freely available to all the Lenders
and is one in which dealings regularly occur in the London interbank
market.
(3) These notes are included for convenience only and are to be ignored in
construing the Facilities Agreement.
S4-3
<PAGE>
PART B
Form of Revolving Credit Guarantee/SINAC Term Guarantee
-------------------------------------------------------
Drawdown Request
----------------
[Form of Revolving Credit Guarantee/
SINAC Term Guarantee to be attached]
To: [Insert details of Agent's administrations department]
Attention:[_____]
FF 2,569,000,000 facilities agreement dated 30th November, 1995
- ---------------------------------------------------------------
We refer to the above agreement between, inter alia, ourselves, the Lead
Arranger, the Underwriters, the Co-Arrangers, the Lenders described therein and
yourselves as Agent (the "Facilities Agreement", which expression includes any
amendments or supplements thereto or restatements thereof). Terms defined in the
Facilities Agreement have the same meaning in this notice.
Pursuant to Clause 5.2 of the Facilities Agreement, we hereby give you notice of
the following proposed drawing of a [Revolving Credit Guarantee][SINAC Term
Guarantee] under the Tranche B Multicurrency [Revolving][Term] Facility:
(a) Borrower:
(b) After giving effect to the [Revolving Credit Guarantee] [SINAC Term
Guarantee] the Gearing Ratio for the [insert name of relevant
Borrowing Sub-Group] shall not be greater than 1.25:1.00.
(c) Proposed Drawdown Date (a Business Day):
(d) Currency:
(e) Amount:
S4-4
<PAGE>
(f) Person to whom the Revolving Credit Guarantee is to be issued,
together with details of the address for its delivery:
(g) Expiry date of the Revolving Credit Guarantee:
(h) Name of proposed Issuing Lender:
We confirm that (i) no Event of Default or Potential Event of Default has
occurred and is continuing unremedied or unwaived or will occur as a result of
making this Revolving Credit Guarantee, (ii) no Event of Default or Default (as
defined in the Indentures) has occurred and is continuing unremedied or unwaived
or will occur as a result of the making of this Revolving Credit Guarantee and,
(iii) each of the representations and warranties required to be made in
accordance with Clause 13 of the Facilities Agreement are true and accurate on
the date hereof.
[In the case of an extension of credit requested by or on behalf of
Accumulatorenfabrik Sonnenschein GmbH or any other Borrower incorporated in
Germany, we hereby certify that, after the making of such extension of credit,
the aggregate amount which is utilised under the Facilities to or by the
Drawdown Request Borrower will be a level of indebtedness which the Drawdown
Request Borrower can reasonably be expected to repay without receiving any
financial support (other than from its subsidiaries).]
Dated 19[_]
[Borrowers' Agent]
By: .................
S4-5
<PAGE>
Notes
- -----
(1) The expiry date of the Revolving Credit Guarantee may not be later
than the Final Repayment Date.
(2) Currencies other than USD, BF, DEM, ESP, FF, GBP and ITL may not be
requested unless the Agent has confirmed in writing to the Borrowers'
Agent that such other currency is freely available to all the Lenders
and is one in which dealings regularly occur in the London interbank
market.
(3) These notes are included for convenience only and are to be ignored in
construing the Facilities Agreement.
S4-6
<PAGE>
PART C
Form of Revolving L/C or Banesto Term Letter of Credit
-------------------------------------------------------
Drawdown Request
----------------
[Form of letter of credit to be attached]
To: [Insert details of Agent's administrations department]
Attention:[_____]
FF 2,569,000,000 facilities agreement dated 30th November, 1995
- ---------------------------------------------------------------
We refer to the above agreement between, inter alia, ourselves, the Lead
Arranger, Underwriters, Co-Arrangers, the Lenders described therein and
yourselves as Agent (the "Facilities Agreement", which expression includes any
amendments or supplements thereto or restatements thereof). Terms defined in
the Facilities Agreement have the same meaning in this notice.
Pursuant to Clause 5.3 of the Facilities Agreement, we hereby give you notice of
the following proposed drawing of a [Revolving L/C][Banesto Term Letter of
Credit] under the Tranche B Multicurrency [Term][Revolving] Facility:
(a) Borrower:
(b) After giving effect to the [Revolving L/C] [Banesto Term Letter of
Credit] the Gearing Ratio for the [insert name of relevant Borrowing
Sub-Group] shall not be greater than 1.25:1.00.
(c) Proposed Drawdown Date (a Business Day):
(d) Maximum aggregate liability under the Letter of Credit:
(e) Currency:
S4-7
<PAGE>
(f) Person to whom the Letter of Credit is to be issued, together with details
of the address for its delivery:
(g) Expiry date of the Letter of Credit:
(h) Name of proposed Issuing Lender:
We confirm that (i) no Event of Default or Potential Event of Default has
occurred and is continuing unremedied or unwaived or will occur as a result of
making this Revolving L/C, (ii) no Event of Default or Default (as defined in
the Indentures) has occurred and is continuing unremedied or unwaived or will
occur as a result of the making of this Revolving L/C and, (iii) each of the
representations and warranties required to be made in accordance with Clause 13
of the Facilities Agreement are true and accurate on the date hereof.
[In the case of an extension of credit requested by or on behalf of
Accumulatorenfabrik Sonnenschein GmbH or any other Borrower incorporated in
Germany (the "Drawdown Request Borrower"), we hereby certify that, after the
making of such extension of credit, the aggregate amount which is utilised under
the Revolving Credit Facility to or by the Drawdown Request Borrower will be a
level of indebtedness which the Drawdown Request Borrower can reasonably be
expected to repay without receiving any financial support (other than from its
subsidiaries).]
Dated 19[_]
[Borrowers' Agent]
By: .......................
S4-8
<PAGE>
Notes
- -----
(1) The expiry date of the [Revolving L/C][Banesto Term Letter of Credit] may
not be later than five business days before the Final Repayment Date and
not more than 365 days following the relevant Drawdown Date.
(2) Currencies other than USD, BF, DEM, ESP, FF, GBP and ITL may not be
requested unless the Agent has confirmed in writing to the Borrowers' Agent
that such other currency is freely available to all the Lenders and is one
in which dealings regularly occur in the London interbank market.
(3) These notes are included for convenience only and are to be ignored in
construing the Facilities Agreement.
S4-9
<PAGE>
SCHEDULE 5
S5-1
<PAGE>
SCHEDULE 6
Calculation of the Mandatory Liquid Asset Costs
-----------------------------------------------
for any Sterling Advances
-------------------------
(a) The Mandatory Liquid Asset Costs for an Advance if denominated in GBP for
each Interest Period for that Advance is calculated in accordance with the
following formula:
BY + L(Y-X) + S(Y-Z) % PER ANNUM
--------------------
100 - (B+S)
where on the day of the application of the formula:
B is the percentage of the Agent's eligible liabilities which the Bank
of England then requires the Agent to hold on a non-interest-bearing
deposit account in accordance with its cash ratio requirements;
Y is the rate at which GBP deposits are offered by the Agent to leading
banks in the London interbank market at or about 11.00 a.m. on that
day for the relevant period;
L is the percentage of eligible liabilities which (as a result of the
requirements of the Bank of England) the Agent maintains as secured
money with members of the London Discount Market Association or in
certain marketable or callable securities approved by the Bank of
England, which percentage shall (in the absence of evidence that any
other figure is appropriate) be conclusively presumed to be 5 per
cent.;
X is the rate at which secured GBP deposits may be placed by the Agent
with members of the London Discount Market Association at or about
11.00 a.m. on that day for the relevant period or, if greater, the
rate at which GBP bills of exchange (of a tenor equal to the duration
of the relevant period) eligible for rediscounting at the Bank of
England can
S6-1
<PAGE>
be discounted in the London Discount Market at or about 11.00 a.m. on
that day;
S is the percentage for the Agent's eligible liabilities which the Bank
of England requires the Agent to place as a special deposit; and
Z is the interest rate per annum allowed by the Bank of England on
special deposits.
(b) For the purposes of this Schedule:
(i) "eligible liabilities" and "special deposits" have the meanings given
---------------------- ------------------
to them at the time of application of the formula by the Bank of
England; and
(ii) "relevant period" in relation to each Interest Period means:
-----------------
(A) if it is 3 months or less, that Interest Period or
(B) if it is more than 3 months, 3 months.
(c) In the application of the formula, B, Y, L, X, S and Z are included in the
formula as figures and not as percentages, e.g. if B=0.5% and Y = 15%, BY
would be calculated as 0.5 x 15.
(d) The formula is applied on the first day of each relevant period. Each
amount is rounded up to the nearest one-sixteenth of one per cent.
(e) If the Agent determines that a change in circumstances has rendered, or
will render, the formula inappropriate, the Agent (after consultation with
the Lenders) shall notify the Borrower's Agent of the manner in which the
Mandatory Liquid Asset Costs for such Advances will subsequently be
calculated. The manner of calculation so notified by the Agent shall, in
the absence of manifest error, be binding on all the Obligors.
S6-2
<PAGE>
SCHEDULE 7
GEARING RATIO CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFIES THAT:
(i) I am the duly elected [Title] of EHE a ________ corporation;
(ii) I have reviewed the terms of the Facilities Agreement dated 30th
November, 1995 among Compagnie Europeenne D'Accumulateurs S.A., Euro Exide
Corporation Limited, Exide Holdings France S.A. and Sociedad Espanola Del
Acumulador S.A., as the Lead Borrowers, Bankers Trust Company, as Lead Arranger,
Agent, Security Agent and Underwriter and the Underwriters, Co-Arrangers and
Lenders named therein, as amended, supplemented or otherwise modified to the
date hereof (said Facilities Agreement, as so amended, supplemented or otherwise
modified, being the "FACILITIES AGREEMENT", the terms defined therein and not
othewise defined in this Certificate have the meanings assigned in the
Facilities Agreement) and have made or have caused to be made under my
supervision, a review in reasonable detail of the transactions and condition of
the [insert "Borrowing Group" or name of relevant Borrowing Sub-Group as
applicable] as of the last day of the most recently ended Accounting Quarter;
(iii) I hereby certify, after giving effect on a pro forma basis to each
transaction permitted under clause (ix)(b) of "Permitted Investments", Clauses
13.2.8(f), 13.2.8(g), 13.2.8(i), 13.2.9(b) and 13.2.12(viii) of the Facilities
Agreement which [has occurred in the case of a Certificate delivered pursuant to
Clause 13.2.12(viii) or 13.3.4(e)] [has occurred or is proposed in the case of a
Certificate delivered pursuant to Clause (ix)(b) of the definition of "Permitted
Investment", 13.2.8(f), 13.2.8(g), 13.2.8(i) or 13.2.9(b)], as follows :
<TABLE>
<S> <C>
A. Total Borrowings of the [insert
"Borrowing Group" or name of
relevant Borrowing Sub-Group as
applicable] $________________
B. Cash and Permitted Investments described
in sub-clauses (ii) to (vi) (inclusive) of the
definition of "Permitted Investments": $________________
</TABLE>
S7-1
<PAGE>
<TABLE>
<S> <C>
C. A minus B: $________________
D. Net Worth of the [insert "Borrowing
Group" or name of relevant Borrowing Sub-
Group as applicable]: $________________
E. [Loans by any member of the Borrowing
Group to, or other Financial Indebtedness
(including without limitation but without
duplication guarantees) of any member of the
Borrowing Group in respect of, the Parent or
any of its subsidiaries (other than a member
of the Borrowing Group)] [Loans by any
member of the [insert name of relevant
Borrowing Sub-Group] to, or Financial
Indebtedness (including without limitation
but without duplication guarantees) of any
member of such Borrowing Sub-Group in
respect of, the Parent or any of its subsidiaries
(other than a member of such Borrowing Sub-
Group or another Borrowing Sub-Group)]: $________________
F. D minus E: $________________
Gearing Ratio (C) : (F): ____:1.00
[Maximum Gearing Ratio permitted under the
Facilities Agreement other than in the case of
Clause 13.2.8(f)] 1.25:1.00
[Maximum Gearing Ratio permitted under
Clause 13.2.8(f)] 1.20:1.00
</TABLE>
This Certificate is delivered pursuant to Clause [13.3.4(e)[, [(ix)(b) of the
definition of "Permitted Investments"] [13.2.8(f)], [13.2.8(g)], [13.2.8(i)],
[13.2.9(b)] [13.2.12(viii)] of the Facilities Agreement on this _____ day of
__________.
S7-2
<PAGE>
[Insert name of Company]
By: _________________________
Title: _________________________
S7-3
<PAGE>
SCHEDULE 8
Form of Deed of Accession
-------------------------
THIS DEED is made this [____] day of __________, by
[__________], as Borrowers, and
[__________], as Guarantors, IN FAVOUR OF:
(1) EXIDE HOLDING EUROPE, as Borrowers' Agent (the "Borrowers' Agent")
(2) BANKERS TRUST COMPANY as Lead Arranger and an Underwriter;
(3) BANKERS TRUST COMPANY, as Agent (the "Agent");
(4) BANKERS TRUST COMPANY, as Security Agent;
(5) THE LENDERS AND OTHER UNDERWRITERS AND CO-ARRANGERS PARTY TO THE
FACILITIES AGREEMENT DESCRIBED BELOW; and
(6) THE OBLIGORS PARTY TO THE FACILITIES AGREEMENT DESCRIBED BELOW.
WHEREAS:
(A) This Deed is supplemental to a facilities agreement (the "FACILITIES
AGREEMENT", which expression includes any amendments or supplements
thereto or restatements thereof) dated 30th November, 1995 made
among the parties referred to in paragraphs (1) to (6) above
(B) [[insert name of party or parties] wish[es] to accede to the
Facilities Agreement as a Borrower [and a Guarantor.]
[(C)] [[insert name of party or parties] wish[es] to accede to the
Facilities Agreement as a Guarantor.]
NOW THIS DEED WITNESSETH AS FOLLOWS:
(1) Words and expressions defined in the Facilities Agreement shall have
the same meanings when used herein.
S8-1
<PAGE>
[delete as appropriate:]
[(2) [insert name or names of Borrower(s)] [each] hereby:
(a) agrees to be bound by all the terms and conditions of the
Facilities Agreement insofar as they relate to a Borrower as if it
were a party to the Facilities Agreement in such capacity; and
(b) confirms that it shall not be entitled to utilise any of the
Facilities until such time as the conditions precedent to such use,
set forth in the Facilities Agreement, are satisfied, following which
it shall be entitled to utilise the Tranche B Multicurrency Revolving
Facility [and/or Tranche B Term Facility] subject to the terms
thereof.]
[(2)/(3)] [insert name or names of Guarantor(s)] [including any Borrowers]
[each] hereby:
(a) agrees to be bound by all the terms and conditions of the
Facilities Agreement insofar as they relate to a Guarantor (including
without limitation Clause 15 (Guarantee) and Clause 30 (Jurisdiction)
of the Facilities Agreement) as if it were a party to the Facilities
Agreement in such capacity; and
(b) represents and warrants to the Agent and the other Finance
Parties:
(i) in the terms of Clause 12.2 to 12.12 inclusive as of the
date hereof, and
(ii) in the terms of Clauses 12.13 to 12.18 as of the Initial
Drawdown Date,
subject in each case to the terms of Clauses 12.1.2(i), (ii) and (iv).
[(3)/(4)] [Each of t][T]he undersigned [Borrower[s] and/or Guarantor[s]] agrees
to be bound by all the terms and conditions of the Facilities
Agreement insofar as they relate to an Obligor as if it were a party
to the Facilities Agreement in such capacity.
[(4)/(5)] [The foregoing notwithstanding, the obligations of the undersigned
Guarantors under the foregoing shall be limited as follows:
S8-2
<PAGE>
[limitations to guarantees, if not already in Facilities Agreement]
[(5)/(6)] [Each of t][T]he undersigned [Borrower[s] and/or Guarantor[s]]
confirms that its address for the purposes of Clause 21 (Notices) of
the Facilities Agreement is set out under its name as follows:
[Name]
[Address]
Attention: [ ]
Facsimile: [ ]
[(6)/(7)] Each of the undersigned hereby agrees that [insert name of Borrowers
and/or Guarantors] shall, from the date of the later of (i) the
execution by Agent of this Deed and (ii) the execution by Borrower's
Agent of this Deed, accede to the Facilities Agreement as if it were a
[Borrower and/or Guarantor] and an Obligor named therein and a party
thereto.
[(7)/(8)] This Deed may be executed in any number of counterparts and all of
such counterparts taken together shall be deemed to constitute one and
the same instrument.
[(8)/(9)] This Deed shall be governed by and construed in accordance with the
laws of England.
IN WITNESS WHEREOF the undersigned have caused this Deed to be duly executed
and delivered the day and year first above written.
EXECUTED and DELIVERED )
as a deed )
for and on behalf of )
[ ] )
by )
in the presence of )
EXECUTED and DELIVERED )
as a deed )
S8-3
<PAGE>
for and on behalf of )
[______] )
as Borrowers' Agent )
by [_____] )
in the presence of: )
SIGNED by
for and on behalf of)
BANKERS TRUST COMPANY,
as Agent
.............................
Date:
S8-4
<PAGE>
SCHEDULE 9
----------
Form of Transfer Certificate
----------------------------
[Note: the Transferor and Transferee should ensure that all regulatory
requirements (in particular compliance with the Financial Services Act 1986 and
any regulations made thereunder) are satisfied in connection with their entry
into of their Transfer Certificate.]
TRANSFER CERTIFICATE
--------------------
To: [name of Agent]
for and on behalf of the Obligors, Lenders and
other Finance Parties (each as defined in the
Facilities Agreement referred to below).
From: [insert name of Transferor] (the "Transferor")
[insert name of Transferee] (the "Transferee")
This transfer certificate (this "Certificate") relates to a Facilities Agreement
dated 30th November, 1995, and made among [_], as Borrowers' Agent, Bankers
Trust Company, as Agent, Lead Arranger and an Underwriter, and the Co-Arrangers,
Lenders and other Underwriters described therein (the "Facilities Agreement",
which expression includes any amendments or supplements thereto or restatements
thereof). Terms defined in the Facilities Agreement shall, unless otherwise
defined in this Certificate, have the same meanings when used in this
Certificate.
The Transferor by its execution of this
Certificate:-
(a) confirms that the details which appear in
column II of the First Schedule of this
Certificate accurately state, respectively, the
amount of the Transferor's Commitment and the
Transferor's participation in Advances as at
the date of this Certificate;
S9-1
<PAGE>
(b) requests the Transferee to accept and
procure, in accordance with Clause 25.3 of the
Facilities Agreement, transfer to the
Transferee of the portion of the Transferor's
participation in the Facilities specified in
column III of the First Schedule of this
Certificate by counter-signing this Certificate
and delivering it to the Agent at its address
for the giving of notices under the Facilities
Agreement so as to take effect on the date
specified in the Second Schedule of this
Certificate (the "Transfer Date").
1 The Transferee by its execution of this
Certificate requests the Obligors, the Lenders,
the Agent and the other Finance Parties to
accept this Certificate as being delivered
under and for the purposes of Clause 25.3 of
the Facilities Agreement so as to take effect
in accordance with the terms of that Clause on
the Transfer Date .
2 [The Transferee undertakes to pay to the Agent
for the Agent's own account a transfer fee of
GBP 500 as provided in Clause 25.3.2(d) of the
Facilities Agreement. ]
3 The Transferee hereby: (a) confirms that it has
received from the Transferor a copy of the
Facilities Agreement together with such other
documents and information as it has requested
in connection with this transaction;
(b) confirms that it has not relied, and will
not hereafter rely, on the Transferor or any
other Finance Party to the Facilities Agreement
or any of the other Finance Documents to check
or enquire on its behalf into the legality,
validity, effectiveness, adequacy, accuracy or
completeness of any such documents or
information ;
S9-2
<PAGE>
(c) agrees that it has not relied, and will not
hereafter rely, on Transferor or any other
Finance Party to the Facilities Agreement or
any of the other Finance Documents to assess or
keep under review on its behalf the financial
condition, creditworthiness, condition,
affairs, status or nature of the Borrowers, the
other Obligors or any other party to the
Facilities Agreement or the other Finance
Documents; and
(d) represents and warrants to the Transferor
and all other parties to the Facilities
Agreement that it (i) has power to become a
party to the Facilities Agreement as a "Lender"
on the terms herein and therein set out, and
(ii) has taken all necessary steps to authorise
execution and delivery of this Certificate .
4 Neither the Transferor nor any other Finance
Party to the Facilities Agreement makes any
representation or warranty nor assumes any
responsibility with respect to the legality,
validity, effectiveness, adequacy or
enforceability of the Finance Documents and
assumes no responsibility for the financial
condition of the Borrowers, the other Obligors
or any other party to the Finance Documents or
for the performance and observance by each
Borrower or any other Obligor of any of its
obligations under the Finance Documents and any
and all such representations and warranties and
responsibility, whether express or implied by
law or otherwise, are hereby excluded.
5 On execution of this Certificate by the Agent
for itself and on behalf of the Obligors, the
Lenders (other than the Transferor) and the
other Finance Parties, each of them accepts the
Transferee on and with effect from the Transfer
Date as a party in substitution for the
Transferor with respect to all those rights and
obligations which by the terms of the
Facilities Agreement and this Certificate are
assumed by the Transferor.
S9-3
<PAGE>
6 By its execution hereof, the Transferee
confirms the appointment of [insert name of
Agent] to act as its agent under and in
connection with the Finance Documents and
irrevocably authorises the Agent and the
Security Agent, respectively, for and on its
behalf to exercise such rights, powers and
discretions as are delegated to it by the terms
of the Finance Documents, together with all
such rights, powers and discretions as are
incidental thereto, and to give a good
discharge for any moneys payable under the
Finance Documents.
7 This Certificate and the rights and obligations
of the parties hereto shall be governed by and
construed in accordance with English law.
AS WITNESS the hands of authorised signatories for and on behalf of the
Transferor, the Transferee and the Agent on the respective dates appearing
below.
S9-4
<PAGE>
First Schedule to the Transfer Certificate
------------------------------------------
<TABLE>
<CAPTION>
I II III
- - -- ---
Position to be
Transferor Position Transferred to
Facility Details Prior to Transfer Transferee
- ---------------- ----------------- ----------
<S> <C> <C>
Tranche A Term FF [_]
FF [_]
Commitment
Tranche A Term FF [_]
FF [_]
Cash Advances
Tranche B Multicurrency FF [_] FF [_]
Term Commitment
Tranche B Multicurrency FF [_] FF [_]
Term Cash Advances
Tranche B Multicurrency FF [_] FF [_]
Term Deemed Advances
Tranche B Multicurrency FF [_] FF [_]
Revolving Commitment
Tranche B Multicurrency FF [_] FF [_]
Revolving Cash Advances
Tranche B Multicurrency FF [_] FF [_]
Revolving Deemed Advances
</TABLE>
Notes
- -----
S9-5
<PAGE>
(1) Details of the Tranche B Multicurrency Revolving Cash Advances and the
Deemed Advances and WCP Advances transferred are as follows:
<TABLE>
<CAPTION>
Amount Duration
------ --------
<S> <C> <C>
[______] [_] month(s) maturing [____] 19 [_]
[______] [_] month(s) maturing [____] 19 [_]
of which the following are:-
(a) WCP Advances:
Amount Duration
------ --------
Borrower
--------
[_________] [____] month(s) maturing [____] 19[_]
[_________] [_] month(s) maturing [_] 19[_]
(b) Deemed Advances:
Amount Instrument Issuer Maturity
------ ---------- ------ --------
[______] [Revolving L/C/Revolving
Credit Guarantee/Banesto
Term Letter of Credit/SINAC
Term Guarantee]
</TABLE>
S9-6
<PAGE>
Second Schedule to the Transfer Certificate
-------------------------------------------
Particulars relating to the Transferee
--------------------------------------
Transfer Date:
Lending Office:
Contact Name:
Account for Payments:
Telephone:
Facsimile:
[Transferor]
[Transferee]
By ............. By:.............
Date: [_____] 19 [__] Date: [_____] 19 [__]
[Agent]
By: ..............
Date: [_____) 19 [__]
S9-7
<PAGE>
SCHEDULE 10
FORM OF BANESTO TERM LETTER OF CREDIT
IRREVOCABLE LETTER OF CREDIT
___________ 1995
IRREVOCABLE LETTER OF CREDIT NO.:______
La Corporacion Industrial y
Financiera de Banesto (the "Seller")
P/o/ Castellana 7
28046 Madrid, Spain
Ladies and Gentlemen:
At the request, on the instructions and for the account of Sociedad
Espanola del Acumulador Tudor S.A., a Spanish company ("Tudor"), we hereby
establish this irrevocable Letter of Credit in favor of Seller, in the amount of
3,122,885,597 pesetas (as reduced from time to time in accordance with the
provisions hereof, the "Stated Amount"), of which (a) an aggregate amount not
exceeding 2,998,270,000 pesetas (as reduced from time to time in accordance with
the terms hereof, the "Principal Component") may be drawn upon with respect to
the payment of the unpaid principal amount of the Seller Convertible Bonds (as
defined below) and (b) an aggregate amount not exceeding 124,615,597 pesetas (as
reduced from time to time in accordance with the terms hereof, the "Interest
Component") may be drawn upon with respect to the payment of interest accrued on
the Seller Convertible Bonds on or prior to their stated maturity date. This
Letter of Credit is being issued to support the obligations of Tudor to make
payments owing by it in respect of the 299,827 convertible bonds maturing
December 28, 1997, of pesetas 10,000 face value each, of Tudor which are owned
by the Seller (the "Seller Convertible Bonds") as described in the Purchase
Agreement dated as of July 22, 1994 between Exide Corporation, a Delaware
corporation (the "Company") and the Seller (the "Purchase Agreement"). All
drawings under this Letter of Credit shall be paid by us in pesetas. This Letter
of Credit is irrevocable and is non-transferable.
Subject to the foregoing and the further provisions of this Letter of
Credit, a demand for payment may be made by you by presentation to us at 1
Appold Street, London EC2A 2HE, England, Attention: Letter of Credit Division,
or at any other office in the United Kingdom which may be designated by us by
written notice delivered to you, or sent to us by
<PAGE>
facsimile (No. +44-171-982-_____), Attention: Letter of Credit Division)
followed by delivery of the original documents not later than our close of
business on the following Business Day, of a sight draft(s) drawn on Bankers
Trust Company at 1 Appold Street, London EC2A 2HE, England under this Letter of
Credit and bearing on its face the clause "Drawn under Bankers Trust Company
Irrevocable Letter of Credit No. _______," accompanied by a drawing certificate
on your letterhead:
(a) except in the circumstances described in following clause (c), if
the drawing is being made with respect to principal of the Seller
Convertible Bonds (an "A Drawing"), receipt by us of a written certificate
in the form of Annex A attached hereto appropriately completed and signed
by an Authorized Officer of the Seller;
(b) except in the circumstances described in following clause (c), if
the drawing is being made with respect to the payment of interest due on
the Seller Convertible Bonds (a "B Drawing"), receipt by us of a written
certificate in the form of Annex B attached hereto appropriately completed
and signed by an Authorized Officer of the Seller; or
(c) if the drawing is being made with respect to the payment of
principal of, and interest on, the Seller Convertible Bonds (1) following
either (x) your receipt of a Notice of Termination or Notice of Expiration
as provided below or (y) our failure to reinstate the Interest Component of
the Letter of Credit after the making a B Drawing (which failure has
continued for 10 or more Business Days after the making of the respective B
Drawing) or (2) constitutes an Expiry Drawing (as defined below) (with any
drawing as described in this clause (c) being herein called a "C Drawing"),
receipt by us of a written certificate in the form of Annex C attached
hereto appropriately completed and signed by an Authorized Officer of the
Seller.
Demands for payment may be made by you under this Letter of Credit at
any time during our business hours at our aforesaid address on a Business Day.
If demand for payment is made by you hereunder at or prior to 11 A.M. (London
time) on a Business Day, and provided that such demand for payment and the
documents presented in connection therewith conform to the terms and conditions
hereof, payment shall be made to you, or to your designee, of the amount
demanded at our office referred to above not later than 10 A.M. (London time) on
the third next succeeding Business Day. If demand for payment is made by you
hereunder after 11 A.M. (London time) on a Business Day, and provided that such
demand for payment and the documents presented in connection therewith conform
to the terms and conditions hereof, payment shall be made to you, or to your
designee, of the amount demanded not later than 10 A.M. (London time) on the
fourth next succeeding Business Day. If a demand for payment made by you
hereunder does not, in any instance, conform to the terms and conditions of this
Letter of Credit, we shall give you prompt notice that the demand for payment
was not effected in accordance with the terms and conditions of this Letter of
Credit, stating the reasons therefor and that we will upon your instructions
hold any documents at your disposal or return the same to you. Upon being
notified that the demand for payment was not effected in conformity with this
Letter of Credit, you may attempt to correct any such non-conforming demand for
payment to the extent that you are entitled to do so.
2
<PAGE>
The Stated Amount of this Letter of Credit shall be reduced to zero on
the earliest of (i) that date upon which all Seller Convertible Bonds have been
repaid in full, (ii) the close of business on the Stated Expiry Date and (iii)
if we have given you written notice that an Event of Default (as defined in the
Facility Agreement hereinafter referred to) has occurred under the Facilities
Agreement dated __________, 1995, among inter alia (1) Tudor, Compagnie
----- ----
Europeenne d'Accumulateurs S.A., Euro Exide Corporation Limited and Exide
Holdings France S.A., as Lead Borrowers, (2) the Co-Arrangers and Underwriters
named therein, (3) various lenders and (4) Bankers Trust Company, as Lead
Arranger, Security Agent and Agent (the "Agent"), as amended or replaced from
time to time in the future without your consent (the "Credit Agreement"), and
that this Letter of Credit will terminate (any such notice, a "Notice of
Termination") at the close of business on the day occurring sixty days after the
day upon which we have so notified you; this Letter of Credit shall
automatically terminate and be delivered to us for cancellation. Following
receipt of a Notice of Termination from us pursuant to clause (iii), you shall
be entitled to draw hereunder an amount (in pesetas) which is the lesser of (a)
the Stated Amount of the Letter of Credit as in effect on the date of drawing or
(b) the total outstanding principal of, and accrued and unpaid interest on, the
Seller Convertible Bonds on the date of drawing.
It is a condition of this Letter of Credit that it shall be
automatically renewed on the Stated Expiry Date then in effect for a term
commencing on the Stated Expiry Date to the date occurring one year after the
Stated Expiry Date then in effect unless we shall notify you in writing (any
such notice, a "Notice of Expiration") prior to the date which occurs sixty days
before the Stated Expiry Date then in effect that the Letter of Credit shall
expire on such Stated Expiry Date. In the event you are so notified, upon
receipt of such Notice of Expiration you shall be entitled to draw hereunder an
amount (in pesetas) which is the lesser of (a) the Stated Amount of the Letter
of Credit as in effect on the date of drawing or (b) the total outstanding
principal of, and accrued and unpaid interest on, the Seller Convertible Bonds
on the date of drawing. Notwithstanding the foregoing, the Stated Expiry Date
shall not extend beyond August 30, 1999 (the "Outside Expiry Date"). Whether or
not you have received a Notice of Expiration, if any Seller Convertible Bonds
remain outstanding after the date which occurs 30 days before the Outside Expiry
Date, if this Letter of Credit is then in effect you shall be entitled to draw
hereunder (any such drawing, an "Expiry Drawing") an amount (in pesetas) which
is the lesser of (a) the Stated Amount of the Letter of Credit as in effect on
the date of drawing or (b) the total outstanding principal of, and accrued and
unpaid interest on, the Seller Convertible Bonds on the date of drawing.
Demands for payment hereunder honored by us shall not, in the
aggregate, exceed the Stated Amount, as the same shall be in effect from time to
time (i.e., as same may be reduced from time to time and as same may have been
reinstated by us as provided in the next paragraph). Subject to the preceding
sentence, each "A Drawing" honored by us hereunder shall pro tanto reduce the
Principal Component, and each "B Drawing" honored by us hereunder shall pro
tanto reduce the Interest Component. Upon the occurrence of any "C Drawing"
honored by us hereunder, the Principal Component and Interest Component shall
each be reduced to zero. In addition, the Principal Component and Interest
Component shall be permanently reduced from time to time by the respective
amounts stated in a certificate in the form of Annex D attached hereto
appropriately completed and signed by an Authorized Officer of the Seller. Any
reduction
3
<PAGE>
in the Principal Component or Interest Component shall result in a corresponding
reduction in the Stated Amount, it being understood that after the effectiveness
of any such reduction you shall no longer have any right to make a drawing
hereunder in respect of the amount of such principal and/or interest on the
Seller Convertible Bonds causing or corresponding to such reduction.
Upon your receipt of a notice from us after any payment in respect of
a "B Drawing" in the form of Annex E stating that the Interest Component shall
be reinstated, then on the date of your receipt of such notice the Interest
Component shall be reinstated to the amount thereof as in effect before the
making of the respective B Drawing; provided, however, that in no event shall
the Interest Component be reinstated to an amount in excess of 180 days'
interest (computed at a rate of 8.3125% per annum and on the basis of a 360-day
year, actual days elapsed, notwithstanding the actual rate borne from time to
time by the Seller Convertible Bonds) on the then applicable Principal Component
at the time of any such reinstatement if, after any B Drawing that is made, we
have not reinstated the Interest Component as provided above in this paragraph
within 10 Business Days after such B Drawing, then at any time thereafter
(unless and until the Interest Component has been reinstated prior to the making
of the drawing hereinafter described in this sentence), you shall be entitled to
make a "C Drawing" in an amount (in pesetas) which is the lesser of (a) the
Stated Amount of the Letter of Credit as in effect on the date of such drawing
or (b) the total outstanding principal of, and accrued and unpaid interest on,
the Seller Convertible Bonds on the date of drawing.
Only the Seller may make a drawing under this Letter of Credit. Upon
the payment to the Seller, to its designee or to its account of the amount
specified in a sight draft drawn hereunder, we shall be fully discharged on our
obligation under this Letter of Credit with respect to such demand for payment
and we shall not thereafter be obligated to make any further payments under this
Letter of Credit in respect of such demand for payment to any person who may
have made or makes a demand for payment of principal of, or interest on, any
Seller Convertible Bond. By paying to the Seller an amount demanded in
accordance herewith, we make no representation as to the correctness of the
amount demanded.
This Letter of Credit applies only to the payment of principal of the
Seller Convertible Bonds and up to 180 days' interest (computed as aforesaid)
accruing on the Seller Convertible Bonds on or prior to the expiration of this
Letter of Credit and does not apply to any interest that may accrue thereon or
any principal or premium which may be payable with respect thereto after such
date.
Upon the earliest of (i) the making by you of a "C Drawing" available
to be made hereunder (after giving effect thereto), (ii) that date upon which
the Stated Amount of this Letter of Credit is reduced to zero in accordance with
the sixth preceding paragraph, (iii) receipt of a certificate signed by an
Authorized Officer of the Seller stating that no Seller Convertible Bonds remain
outstanding and (iv) the close of business on the Stated Expiry Date, this
Letter of Credit shall automatically terminate and be delivered to us for
cancellation.
As used herein (a) "Authorized Officer" shall mean any of Alfredo
Saenz Abad, Santiago Zaldumbide Viadas or Jose Luis Fernandez; (b) "Business
Day" shall mean any day
4
<PAGE>
on which we are open for the purpose of conducting commercial banking business
at the office at which drawings may be made under this Letter of Credit; (c)
"Dollar Equivalent" shall mean, with respect to any currency other than U.S.
Dollars, the amount of U.S. Dollars into which such currency could be converted
at the Exchange Rate; and (d) "Stated Expiry Date" shall mean, at any given
time, December 28, 1996, or such later date, if any, to which the Stated Expiry
Date has been extended as provided above in this Letter of Credit.
This Letter of Credit may not be transferred or assigned, either in
whole or in part. Multiple drawings may be made under this Letter of Credit,
subject to the terms and conditions hereof.
Communications with respect to this Letter of Credit shall be in
writing and shall be addressed to us at 1 Appold Street, London EC2A 2HE,
England, Attention: Letter of Credit Division, specifically referring to this
Letter of Credit by number.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein, except
only the certificate(s) referred to herein; and any such reference shall not be
deemed to incorporate herein by reference any document, instrument or agreement
except for such certificate(s).
This credit is issued subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 (the "Uniform Customs"). This Letter of Credit shall be
deemed to be a contract made under the laws of the State of New York and shall,
as to matters governed by the Uniform Customs, be governed by and construed in
accordance with the laws of the said State.
Very truly yours,
BANKERS TRUST COMPANY
By: __________________________
Name:
Title:
5
<PAGE>
Annex A to Irrevocable Letter of Credit No. _________
CERTIFICATE FOR "A" DRAWING
[Date]
[Name and Address of
Issuing Bank]
Attention: Letter of Credit Division
Re: Irrevocable Letter of Credit No.
- ----------------------------------------
1. [insert name of Authorized Officer executing this certificate], a
duly Authorized Officer of Corporacion Industrial y Financiera de Banesto (the
"Beneficiary"), hereby certifies to [Name of Issuing Bank] (the "Bank") that:
(1) Unless otherwise defined herein, all capitalized terms used
herein and defined in the above-referenced Letter of Credit shall be used
herein as so defined.
(2) Beneficiary is making a drawing under the Letter of Credit in the
amount of _____________ pesetas, /1/ which will be applied to the payment
of principal of the Seller Convertible Bonds, which amount became due and
payable pursuant to the terms thereof on __________, 199 ___./2/ The amount
demanded hereby has previously been demanded by the Beneficiary to be paid
by Tudor (with a copy of such notice furnished to the Agents) on
__________, 199 ___,/3/ and has not been paid. The amount demanded hereby
does not on the date hereof, and will not on the date payment hereunder is
required to be made, exceed either (x) the Principal Component of the
Letter of Credit as then in effect or (y) the Stated Amount of the Letter
of Credit as then in effect, and the Letter of Credit has not terminated in
accordance with its terms prior to the date of making this drawing.
_____________________
/1/ Amount inserted must not exceed the Stated Amount or the Principal
Component of the Letter of Credit at the time of drawing.
/2/ The date must be at least 10 Business Days prior to the date of the
drawing under the Letter of Credit.
/3/ The date inserted must be at least 10 Business Days prior to the making
of the drawing.
6
<PAGE>
(3) Upon its receipt of the amount demanded under the Letter of
Credit, Beneficiary will apply same directly to the payment of the unpaid
principal of the Seller Convertible Bonds.
(4) Upon the making of the payment in respect of this drawing, the
Bank shall (and the Beneficiary hereby agrees that the Bank shall) be
subrogated to all rights of the Beneficiary with respect to the repayment
of the amounts demanded hereby, and to all guarantees and security
therefor, if any. Promptly following the payment in full of any Seller
Convertible Bond all or any portion of which was repaid with a drawing
under this Letter of Credit, the Beneficiary shall deliver such Seller
Convertible Bond to the Bank.
IN WITNESS WHEREOF, Beneficiary has executed and delivered this
Certificate as of the ____ day of ______, 199___.
[NAME OF BENEFICIARY]
By: ___________________
Name:
Title:
Payment Instructions:
<PAGE>
Annex B to Irrevocable Letter of Credit No. _________
CERTIFICATE FOR "B" DRAWING
[Date]
[Name and Address of
Issuing Bank]
Attention: Letter of Credit Division
Re: Irrevocable Letter of Credit No.
- ----------------------------------------
1. [insert name of Authorized Officer executing this certificate], a
duly Authorized Officer of Corporacion Industrial y Financiera de Banesto (the
"Beneficiary"), hereby certifies to [Name of Issuing Bank] (the "Bank") that:
(1) Unless otherwise defined herein, all capitalized terms used
herein and defined in the above-referenced Letter of Credit shall be used
herein as so defined.
(2) Beneficiary is making a drawing under the Letter of Credit in the
amount of _____________ pesetas,/1/ which will be applied to the payment of
interest on the Seller Convertible Bonds, which amount became due and
payable pursuant to the terms thereof on __________, 199 ___./2/ The amount
demanded hereby has previously been demanded by the Beneficiary to be paid
by Tudor (with a copy of such notice furnished to the Agents) on
__________, 199 ___,/3/ and has not been paid. The amount demanded hereby
does not on the date hereof, and will not on the date payment hereunder is
required to be made, exceed either (x) the Interest Component of the Letter
of Credit as then in effect or (y) the Stated Amount of the Letter of
Credit as then in effect, and the Letter of Credit has not terminated in
accordance with its terms prior to the date of making this drawing.
(3) Upon its receipt of the amount demanded under the Letter of
Credit,
_____________________
/1/ Amount inserted must not exceed the Stated Amount or the Interest
Component of the Letter of Credit at the time of drawing.
/2/ The date must be at least 10 Business Days prior to the date of the
drawing under the Letter of Credit.
/3/ The date inserted must be at least 10 Business Days prior to the making
of the drawing.
<PAGE>
Beneficiary will apply same directly to the payment of the unpaid interest
on the Seller Convertible Bonds.
(4) Upon the making of the payment in respect of this drawing, the
Bank shall (and the Beneficiary hereby agrees that the Bank shall) be
subrogated to all rights of the Beneficiary with respect to the repayment
of the amounts demanded hereby, and to all guarantees and security thereof,
if any. Promptly following the payment in full of any Seller Convertible
Bond or of a coupon thereof, as the case may be, with a drawing under this
Letter of Credit, the Beneficiary shall deliver (i) the coupon of such
Seller Convertible Bond to the Bank if only such coupon was repaid with a
drawing under this Letter of Credit, or (ii) the Seller Convertible Bond if
such Seller Convertible Bond was repaid under this Letter of Credit.
IN WITNESS WHEREOF, Beneficiary has executed and delivered this
Certificate as of the ____ day of ______, 199___.
[NAME OF BENEFICIARY]
By: ___________________
Name:
Title:
Payment Instructions:
<PAGE>
Annex C to Irrevocable Letter of Credit No. _________
CERTIFICATE FOR "C" DRAWING
[Date]
[Name and Address of
Issuing Bank]
Attention: Letter of Credit Division
Re: Irrevocable Letter of Credit No.
- ----------------------------------------
1. [insert name of Authorized Officer executing this certificate], a
duly Authorized Officer of Corporacion Industrial y Financiera de Banesto (the
"Beneficiary"), hereby certifies to [Name of Issuing Bank] (the "Bank") that:
(1) Unless otherwise defined herein, all capitalized terms used
herein and defined in the above-referenced Letter of Credit shall be used
herein as so defined.
(2) Beneficiary is making a drawing under the Letter of Credit in the
amount of _____________ pesetas,/1/ of which (x) ____________ pesetas /2/
will be applied to the payment of outstanding principal of the Seller
Convertible Bonds and (y) _____________ pesetas /3/ will be applied to
payment of interest which has accrued on the Seller Convertible Bonds on or
prior to the date of drawing and has not yet been paid. The aggregate
amount demanded hereby has previously been demanded by the Beneficiary to
be paid to Tudor (with a copy of such notice furnished to the Agents) on
______, 199 __ /4/, and has not been paid. The amount demanded hereby does
not on the date hereof, and will not on the date payment hereunder is
required to be made, exceed the Stated Amount of the Letter of Credit as
then in effect, and the amount demanded hereby (x) in respect of principal
shall not exceed the Principal Component of the Letter
________________
/1/ Amount inserted must not exceed the Stated Amount of the Letter of
Credit at the time of drawing.
/2/ Amount inserted must not exceed the Principal Component of the Letter
of Credit at the time of the drawing.
/3/ Amount inserted must not exceed the Interest Component at the time of
drawing.
/4/ The date inserted must be at least 10 Business Days prior to the making
of the drawing.
<PAGE>
of Credit as then in effect and (y) in respect of interest shall not exceed
the Interest Component of the Letter of Credit as then in effect, and the
Letter of Credit has not terminated in accordance with its terms prior to
the date of making of this drawing.
(3) [Prior to the making of this drawing, the Beneficiary received a
Notice of Termination from the Bank pursuant to the Letter of Credit.]
[Prior to the making of this drawing, the Beneficiary received a Notice of
Expiration from the Bank pursuant to the Letter of Credit.] [This drawing
is an Expiry Drawing under, and as defined in, the Letter of Credit, and
the Outside Expiry Date shall occur within 30 days of the making of this
drawing.] [Prior to the making of this drawing, a B Drawing was made
pursuant to the Letter of Credit, as a result of which the Interest
Component was reduced on _________, 199__, /5/ and the Interest Component
has not been reinstated by the Bank after the making of such B Drawing and
prior to the date of this drawing.]/6/
(4) Upon its receipt of the amount demanded under the Letter of
Credit, Beneficiary will apply same directly to the payment of the unpaid
principal of, and interest on, the Seller Convertible Bonds.
(5) Upon the making of the payment in respect of this drawing, the
Bank shall (and the Beneficiary hereby agrees that the Bank shall) be
subrogated to all rights of the Beneficiary with respect to the repayment
of the amounts demanded hereby, and to all guarantees and security
therefor, if any. Upon the making of this drawing, Seller shall deliver to
the Bank all Seller Convertible Bonds which are being repaid with the
proceeds of such drawing, which Seller Convertible Bonds have been
delivered to the Bank concurrently with the making of this drawing.
_______________
/5/ Date inserted must be at least 10 Business Days before the drawing date.
/6/ One of the bracketed alternatives must be inserted, as applicable.
<PAGE>
IN WITNESS WHEREOF, Beneficiary has executed and delivered this
Certificate as of the ____ day of ______, 199___.
[NAME OF BENEFICIARY]
By: ___________________
Name:
Title:
Payment Instructions:
<PAGE>
Annex D to Irrevocable Letter of Credit No. _____________
CERTIFICATE FOR THE PERMANENT
REDUCTION OF STATED AMOUNT
--------------------------
[Name and address of Issuing Bank]
Attention: Letter of Credit Division
Re: Irrevocable Letter of Credit No.
- ----------------------------------------
1. [insert name of duly Authorized Officer executing this
certificate], a duly Authorized Officer of Corporacion Industrial y Financiera
de Banesto (the "Seller"), hereby certifies the following to [Name of Issuing
Bank] (the "Bank") with reference to the Bank's Irrevocable letter of Credit No.
_______ (the "Letter of Credit"). Any capitalized term used herein and not
defined shall have its respective meaning as set forth in the Letter of Credit.
(1) The aggregate principal amount of the Seller Convertible Bonds
outstanding has been reduced to ______________ pesetas.
(2) The Principal Component is hereby correspondingly reduced to
___________ pesetas.
(3) The Interest Component is hereby reduced to __________ pesetas
calculated by multiplying the amount in the last line of paragraph (1) by
___% and multiplying the product thereof by the quotient of 180 divided by
360, to reflect the amount of interest allocable to the reduced amount of
principal set forth in paragraph (2) hereof.
IN WITNESS WHEREOF, the Beneficiary has executed this Certificate as of the
____ day of ________, 199___.
[NAME OF BENEFICIARY]
By: ______________________
Name:
Title:
<PAGE>
Certificate for Reinstatement
of Interest Component
Corporacion Industrial y Financiera
de Banesto
(the "Beneficiary")
[address]
Re: Irrevocable Letter of Credit No.
- ---------------------------------------
1. [insert name of duly authorized officer executing this
certificate], a duly authorized officer of [name of Issuing Bank] (the "Issuer")
of the above referenced Letter of Credit (the "Letter of Credit") hereby
certifies to the Beneficiary the following. All capitalized terms used herein
and not defined shall have the respective meaning as set forth in the Letter of
Credit.
(1) The Interest Component is hereby reinstated to ___________/1/
pesetas.
IN WITNESS WHEREOF, the Issuer has executed this certificate as of the
_________________ day of ___________, 199____.
[NAME OF ISSUING BANK]
By: _______________________
Name:
Title:
___________________
/1/ The Interest Component should be increased to an amount equal to the
Interest Component before giving effect to the B Drawing or B Drawings which
reduced same, provided that in no event shall the Interest Component be required
to be reinstated to an amount in excess of 180 days interest (computed at a rate
of _____% per annum and on the basis of a 360 day year, actual days elapsed).
<PAGE>
SCHEDULE 11
<PAGE>
SCHEDULE 12
<PAGE>
SCHEDULE 13
[FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT]
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this "AGREEMENT") is entered
into by and between _________________, a _____________ with its registered
office at ________________, as assignor (the "ASSIGNOR") and _________________,
a ________________ with its registered office at ______________, as assignee
(the "ASSIGNEE") and relates to that certain Facilities Agreement , dated 30th
November, 1995, among Compagnie Europeenne D'Accumulateurs S.A., Euro Exide
Corporation Limited, Exide Holdings France S.A. and Sociedad Espanola del
Acumulador Tudor S.A., as Lead Borrowers, Bankers Trust Company, as Lead
Arranger, Agent, an Underwriter and Security Agent, the Underwriters and Co-
Arrangers described therein, and the Lenders described therein (said Facilities
Agreement, as amended, supplemented or otherwise modified to the date hereof and
as it may hereafter be amended, supplemented or otherwise modified from time to
time, being the "FACILITIES AGREEMENT", the terms defined therein and not
otherwise defined herein being used herein as therein defined).
IN CONSIDERATION of the agreements, provisions and covenants herein
contained, the parties hereto hereby agree as follows:
SECTION 1. ASSIGNMENT AND ASSUMPTION.
--------------------------
(a) Effective upon the Effective Date (as defined herein),
Assignor hereby sells and assigns to Assignee, without recourse, representation
or warranty (except as expressly set forth herein), and Assignee hereby
purchases and assumes from assignor, all of Assignor's rights and obligations as
a Borrower with respect to FF_____________ of the Assignor's Financial
Indebtedness in respect of its Tranche B Multicurrency Term Loan (the "ASSIGNED
AMOUNT").
(b) Assignor and Assignee hereby agree that, upon giving
effect to the assignment and assumption described above, (i) Assignee shall be a
party to the Facilities Agreement and shall have all of the rights and
obligations under the Finance Documents, and shall be deemed to have made all of
the covenants, representations, warranties and agreements contained in the
Finance Documents, arising out of or otherwise related to the Assigned Amount,
and (ii) with respect to the Assigned Amount only, Assignor shall be released
from any of such obligations, covenants, representations, warranties and
agreements assumed or made by Assignee. Assignee hereby acknowledges and agrees
that the agreement set forth in this Section 1(c) is expressly made for the
benefit of the Finance Parties and the Assignor and their respective successors
and permitted assigns.
(c) Assignor and Assignee hereby acknowledge and confirm
their understanding and intent that (i) this Agreement shall effect the
assignment by Assignor and the assumption by Assignee of Assignor's rights and
obligations with respect to the Assigned Amount, (ii) any other assignments by
Assignor of a portion of its rights and
<PAGE>
obligations with respect to its Financial Indebtedness under the Finance
Documents shall have no effect on the rights and obligations of the Assignee
with respect to the Assigned Amount, and (iii) from and after the Settlement
Date, Assignee shall make all payments to the Agent required under the Finance
Documents in respect of the Assigned Amount (including without limitation all
payments of principal and accrued but unpaid interest, commitment fees and
letter of credit fees with respect thereto).
SECTION 2. CERTAIN REPRESENTATIONS AND WARRANTIES
--------------------------------------
Each party to this Agreement represents and warrants to the other
party hereto that it has full power and authority to enter into this Agreement
and to perform its obligations hereunder in accordance with the provisions
hereof, that this Agreement has been duly authorized, executed and delivered by
such party and that this Agreement constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and by general principles of equity.
SECTION 3. MISCELLANEOUS.
--------------
(a) Each of Assignor and Assignee hereby agrees from time
to time, upon request of the other such party hereto, to take such additional
actions and to execute and deliver such additional documents and instruments as
such other party may reasonably request to effect the transactions contemplated
by, and to carry out the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated, except by an instrument in writing
signed by the Agent and by the party (including, if applicable, any party
required to evidence its consent to or acceptance of this Agreement) against
whom enforcement of such change, waiver, discharge or termination is sought.
(c) This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto and their respective successors and
assigns.
(d) This Agreement shall be governed by and construed in
accordance with the laws of England.
(e) This Agreement may be executed in one or more
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterpart and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
(f) This Agreement shall become effective upon the date
(the "EFFECTIVE DATE") upon which all of the following conditions are satisfied:
(i) the execution of a counterpart hereof by each of Assignor and Assignee and
(ii) satisfaction of those requirements
<PAGE>
for the assignment of Permitted Assumed Debt set forth in the definition thereof
in Clause 1 of the Facilities Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized, as of the date hereof.
Dated:______________ __, 199_
[Name of Assignor],
as Assignor
By:____________________
[Name]
[Title]
[Name of Assignee],
as Assignee
By:____________________
[Name]
[Title]
Acknowledged by
BANKERS TRUST COMPANY, in its capacity
as Agent
By:____________________
[Name]
[Title]
Acknowledged by
EXIDE HOLDINGS FRANCE S.A., in its capacity
as Borrower's Agent
By: ____________________
[Name]
[Title]
<PAGE>
SCHEDULE 14
<PAGE>
Exhibit 11.1
Exide Corporation and Subsidiaries
Computation of Per Share Earnings
(After Extraordinary Loss and Cumulative Effect of Accounting Changes)
(Amounts in thousands except share and per share data)
<TABLE>
<CAPTION>
Fiscal Fiscal Fiscal
Year Year Year
Ended Ended Ended
March 31, March 31, March 31,
1994 1995 1996
------------- -------------- --------------
<S> <C> <C> <C>
Primary earnings per common share:
Income before extraordinary loss and cumulative effect of
accounting change applicable to common stock $ 17,217 $ 4,491 $ 939
============== ============= =============
Net income (loss) applicable to common stock $ 4,506 $ 894 $ (8,661)
============== ============= =============
Shares and equivalents outstanding-
Base shares after ECA exchange 8,388,338 8,388,338 8,388,338
Common stock equivalents--
Stock award grants, assuming exercised at
the average market price 688,665 763,080 775,062
Stock award grants exercised -- 1,992
Stock options, assuming exercised at
the average market price -- 23,159
IPO shares (average shares outstanding throughout the year) 1,916,667 4,600,000 4,600,000
Secondary offering shares (average shares outstanding
throughout the year) 64,515 1,000,000 1,000,000
12/94 stock offering (average shares outstanding throughout
the year) -- 1,439,657 5,175,000
Shares issued to acquire Schuylkill Holdings, Inc. (average
shares outstanding throughout the year) -- -- 348,755
Shares issued to acquire remaining interest in CEAc subsidiary
(average shares outstanding throughout the year) -- -- 72,116
Shares issued under Employee Stock Purchase Plan (average shares
outstanding throughout the year) -- -- 384
-------------- ------------- -------------
Weighted average of common shares outstanding and equivalents 11,058,185 16,191,075 20,384,806
============== ============= =============
Primary earnings per common share before extraordinary loss
and cumulative effect of accounting change $ 1.56 $ 0.28 $ 0.05
============== ============= =============
Primary earnings (loss) per common share $ 0.41 $ 0.06 $ (0.42)
============== ============= =============
</TABLE>
<PAGE>
Exhibit 11.1
(continued)
Exide Corporation and Subsidiaries
Computation of Per Share Earnings
(After Extraordinary Loss and Cumulative Effect of Accounting Changes)
(Amounts in thousands except share and per share data)
<TABLE>
<CAPTION>
Fiscal Fiscal Fiscal
Year Year Year
Ended Ended Ended
March 31, March 31, March 31,
1994 1995 1996
-------------- -------------- --------------
<S> <C> <C> <C>
Fully diluted earnings per common share:
Income before extraordinary loss and cumulative effect of
accounting change applicable to common stock $ 17,217 $ 4,491 $ 939
Elimination of interest expense on convertible senior
subordinated notes, net of income tax benefit -- -- 3,404
-------------- -------------- --------------
Adjusted income before extraordinary loss and cumulative
effect of accounting change applicable to common stock $ 17,217 $ 4,491 $ 4,343
============== ============== ==============
Net income (loss) applicable to common stock $ 4,506 $ 894 $ (8,661)
Elimination of interest expense on convertible senior subordinated
notes, net of income tax benefit -- -- 3,404
-------------- -------------- --------------
Adjusted net income (loss) applicable to common stock $ 4,506 $ 894 $ (5,257)
============== ============== ==============
Shares and equivalents outstanding -
Base shares after ECA exchange 8,388,338 8,388,338 8,388,338
Common stock equivalents --
Stock award grants, assuming exercised at
the average market price 688,665 763,080 775,062
Stock award grants exercised -- -- 1,992
Stock options, assuming exercised at
the average market price -- -- 23,159
IPO shares (average shares outstanding throughout the year) 1,916,667 4,600,000 4,600,000
Secondary offering shares (average shares outstanding
throughout the year) 64,515 1,000,000 1,000,000
12/94 stock offering (average shares outstanding throughout
the year) -- 1,439,657 5,175,000
Shares issued to acquire Schuykill Holdings, Inc. (average
shares outstanding throughout the year) -- -- 348,755
Shares issued to acquire remaining interest In CEAc subsidiary
(average shares outstanding throughout the year) -- -- 72,116
Shares issued under Employee Stock Purchase Plan (average shares
outstanding throughout the year) -- -- 384
Convertible shares (assumed average shares outstanding
throughout the year) -- -- 1,477,254
-------------- -------------- --------------
Weighted average of common shares outstanding and equivalents 11,058,185 16,191,075 21,862,060
============== ============== ==============
Fully diluted earnings per common share before extraordinary loss
and cumulative effect of accounting change $ 1.56 $ 0.28 $ N.A.*
============== ============== ==============
Fully *antidilutive earnings (loss) per common share $ 0.41 $ 0.06 $ N.A.*
============== ============== ==============
</TABLE>
<PAGE>
Exhibit 21.1
<TABLE>
<CAPTION>
Jurisdiction
Subsidiary Name Ownership of Incorporation
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Evanite Fiber Corporation 100.00% Delaware
1000 Abernathy Rd.
Atlanta, GA 30328
Exide Canada, Inc. 100.00% Canada
8301 Keele St.
Maple, Ontario
Canada L6A 1T2
General Battery Corporation 100.00% Delaware
645 Penn St.
Reading, PA 19601
Sociedad Espanola del Acumulador Tudor, S.A. 95.77% Spain
Condesa de Venadito, 1
28027 Madrid Spain
Metalurgica De Gormaz, S.A. (Megorsa) 100.00% Spain
Carretera Nacional 122, km. 229
42330 San Esteban de Gormaz (Soria) Spain
Gaztambide, S.A. 100.00% Spain
Condesa de Venadito, 1
28027 Madrid Spain
Terrenos y Construcciones, S.A. 100.00% Spain
Condesa de Venadito, 1
28027 Madrid Spain
Sociedade Portuguesa do Acumulador Tudor, S.A. (SPAT) 84.40% Portugal
Rua Actor Tasso, 1
1050 Lisbon Portugal
Manos Verwaltungsgesellschaft 100.00% Germany
Coesterweg, 45
D-59494 Soest Germany
Hagen, AG 98.50% Germany
Coesterweg, 45
D-59494 Soest Germany
Exide Automotive, GmbH 100.00% Germany
Miramstrasse 74
34123 Kassel Germany
Elbak Batteriewerke GmbH 100.00% Austria
Puntigamerstrasse 127
8055 Graz Austria
Sonnenschein Austria GmbH 100.00% Austria
Breitenleerstrasse, 150
A-1220 Wien Austria
Mercole Tudor, BV 100.00% Netherlands
Amsteldjik 166
1079 LH Amsterdam Netherlands
Tudor Hellenic S.A. 100.00% Greece
3, Plastira St.
GR 144-52 Metamorfosi Greece
Tudor Holding LTD OY 100.00% Finland
Sahkotie, 8
01510 Vantaa Finland
Tudor India 40.00% India
147 Jolly Maker Chambers 2 - 14th Fl.
Nariman Point - Bombay 400021 India
Exide Holding Europe SA 100.00% France
5 a 7 allee des Pierres Mayettes
92636 Gennevilliers France
CEAC Compagnie Europeene d'Accumulateurs 100.00% France
5 a 7 allee des Pierres Mayettes
92636 Gennevilliers France
</TABLE>
<PAGE>
Exhibit 21.1
<TABLE>
<CAPTION>
Jurisdiction
Subsidiary Name Ownership of Incorporation
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
TS Batteries 100.00% Framce
5 a 7 allee des Pierres Mayettes
92636 Gennevilliers France
Batterie Hagen P 100.00% France
5 a 7 allee des Pierres Mayettes
92636 Gennevilliers France
Exide Automotive 99.81% Belgium
93 rue de Florival
1390 Archennes Belgium
CMP Batterijen NV 99.81% Belgium
93 rue de Florival
1390 Archennes Belgium
Hagen Batterijen BV 100.00% Netherlands
Zoonebaan 6
3606 CA Maarsen Netherlands
CMP Batterijen BV 100.00% Netherlands
Postus 162 Produktiestraat 25
3130 AD Viaardingen Netherlands
ATSA Batterijen BV 100.00% Netherlands
Energieweg 105 Postbus 26
3640 AA Mijdrecht Netherlands
Fulmen Tudor Sonnenschein 100.00% Netherlands
Energieweg 105
3641 RT Mijdrecht Netherlands
Industria Composizione Stampate (ICS) 100.00% Italy
Via bergamo, 1
Canonica d'Adda Bergamo 28040 Italy
Societa Industriale Accumulatori Srl (SINAC) 100.00% Italy
Via Dante Alighieri 100/106
Romano Di Lombardia Italy
Compagnie Generale Accumulatori Spa (CGA) 100.00% Italy
Via Benevento 40
Casalnuovo di Napoli Italy
TS Batterie Srl 100.00% Italy
Via Monzese 76
Segrate Italy
Accumulatorenfabrik Sonnencshein GmbH 99.92% Germany
Thiergarten
63654 Budingen
Sonnenschein Lithium GmbH 49.96% Germany
Industriestrasse 22
63654 Budingen
CENTRA Spolka Akcyjna (CENTRA SA) 96.90% Poland
Gdynska 31/33
61-0166 Poznen Poland
INCI CEAC Aku Sanayi; Anoi Sirketi 50.00% Turkey
Organize Sanayi Bolgesi
45030 Maines Turkey
Fulmen Iberica 96.12% Spain
Poligono Industrial El Pla
C/Miguel Torello Pages, 11-13
06750 Molin de rel Spain
TUDOR AB 100.00% Sweden
S-44041 NOL Sweden
TUDOR Sonnak A/S 100.00% Norway
Molovelen 25
N-3191 Horten Norway
Exide Oy 100.00% Finland
Sahkotie, 8
8f-01510 Vantaa Finland
</TABLE>
<PAGE>
Exhibit 21.1
<TABLE>
<CAPTION>
Jurisdiction
Subsidiary Name Ownership of Incorporation
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
CMP Batteries Ltd 100.00% England
PO Box 1 Salford Road Over Hulton
Bolton BL5 1DD
TS Batteries Limited 100.00% England
PO Box 1 Salford Road Over Hulton
Bolton Bl5 1DD
Accumulatorenfabrik Sonnencshein 100.00% Austria
Breitenleer Strasse 150
A-1220 Wien Austria
Euro Exide Corporation Limited 100.00% United Kingdom
Exide House, 24 Atlantic Square
Station Road, Witham Essex UK
Exide Batteries Limited 81.50% United Kingdom
Caldicot Way, Cwmbran
Gwent Wales
BIG Batteries Limited 81.50% United Kingdom
Caldicot Way, Cwmbran
Gwent Wales
BIG France SARL 81.50% France
6/10 rue Olaf Palme, Emerainville Pariest, 77312
Marne la Vallee
Exide (Holdengs) Limited 81.50% United Kingdom
Chequers Lane
Dagenham, Essex RM9 6PX
Exide (Dagenham) Limited 81.50% United Kingdom
Chequers Lane
Dagenham, Essex RM9 6PX
Gemala Sweden SA 81.50% Sweden
Box 458
651 10 Karistad Sweden
</TABLE>
<PAGE>
Exhibit 21.1
<TABLE>
<CAPTION>
Jurisdiction
Subsidiary Name Ownership of Incorporation
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
<PAGE>
Exhibit 21.1
<TABLE>
<CAPTION>
Jurisdiction
Subsidiary Name Ownership of Incorporation
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
<PAGE>
Exhibit 21.1
<TABLE>
<CAPTION>
Jurisdiction
Subsidiary Name Ownership of Incorporation
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 47,259
<SECURITIES> 0
<RECEIVABLES> 645,679
<ALLOWANCES> 45,350
<INVENTORY> 595,161
<CURRENT-ASSETS> 1,292,033
<PP&E> 798,767
<DEPRECIATION> 220,045
<TOTAL-ASSETS> 2,711,429
<CURRENT-LIABILITIES> 687,610
<BONDS> 1,301,238
0
0
<COMMON> 209
<OTHER-SE> 439,191
<TOTAL-LIABILITY-AND-EQUITY> 2,711,429
<SALES> 2,342,616
<TOTAL-REVENUES> 2,342,616
<CGS> 1,788,231
<TOTAL-COSTS> 1,788,231
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 4,016
<INTEREST-EXPENSE> 120,600
<INCOME-PRETAX> 6,730
<INCOME-TAX> 6,300
<INCOME-CONTINUING> 939
<DISCONTINUED> 0
<EXTRAORDINARY> (9,600)
<CHANGES> 0
<NET-INCOME> (8,661)
<EPS-PRIMARY> (0.42)
<EPS-DILUTED> (0.42)
</TABLE>
