<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended
April 3, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number
0-10182
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Scotsman Industries, Inc.
-------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3635892
-------- ----------
(State of Incorporation) (I.R.S. Employer Identification No.)
775 Corporate Woods Parkway, Vernon Hills, Illinois 60061
---------------------------------------------------------
(Address of principal executive offices) (Zip code)
(708) 215-4500
--------------
Registrant's telephone number, including area code
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
------- --------
At May 9, 1994 there were 8,213,421 shares of registrant's common
stock outstanding.
Exhibit Index is on page 17.<PAGE>
SCOTSMAN INDUSTRIES, INC.
FORM 10-Q
April 3, 1994
INDEX
PART I--FINANCIAL INFORMATION:
Item 1. FINANCIAL STATEMENTS-
HISTORICAL-
Condensed Statement of Income
Condensed Balance Sheet
Condensed Statement of Cash Flows
Notes to Condensed Financial Statements
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
PART II--OTHER INFORMATION:
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURE
-2-<PAGE>
PART I--FINANCIAL INFORMATION
ITEM 1. Financial Statements
SCOTSMAN INDUSTRIES, INC.
CONDENSED STATEMENT OF INCOME
(Unaudited)
(In thousands, except per share amount)
<TABLE>
<CAPTION>
For the Three
Months Ended
----------------------------------------
April 3, April 4,
1994 1993
-------- --------
<S> <C> <C>
Net sales $37,986 $37,896
Cost of sales 26,800 26,258
------ ------
Gross profit $11,186 $11,638
Selling and administrative expenses 7,476 7,902
------ ------
Income from operations $ 3,710 $ 3,736
Interest expense, net 907 1,103
------ ------
Income before income taxes $ 2,803 $ 2,633
Income taxes 1,259 1,185
------ ------
Net income before cumulative
effect of accounting changes $ 1,544 $ 1,448
Cumulative effect of accounting
changes (i) (See Note 4) - 29
------ ------
Net income $ 1,544 $ 1,477
======= =======
Net income per share before
cumulative effect of
accounting changes $ 0.22 $ 0.21
Cumulative effect of
-3-<PAGE>
accounting changes - -
------ ------
Net income per share (ii) $ 0.22 $ 0.21
======= =======
</TABLE>
(i) Changes in accounting principles related to post-retirement
health care, post-employment expenses and income taxes were
implemented in the first quarter of 1993. The cumulative effect
of these accounting changes was as follows:
Unfavorable cumulative effect of accounting change due to
post-retirement health care benefits (in thousands) of
$(1,660) pre-tax and $(1,029) after-tax.
Unfavorable cumulative effect of accounting change due to
other post-employment benefits (in thousands) of $(508) pre-
tax and $(243) after-tax.
Favorable cumulative effect of accounting change relating to
income taxes (in thousands) of $1,301.
(ii) The calculation of net income per share was based on 7,136,085
and on 6,991,438 weighted average shares of the Company's common
stock for the three months ended April 3, 1994 and April 4, 1993,
respectively. The net income per share calculation for the three
months ended April 3, 1994 included the dilutive effect of stock
options outstanding. The net income per share calculation for
the three months ended April 4, 1993 excluded the dilutive effect
of stock options as the dilutive effect was immaterial.
See notes to unaudited condensed financial statements.
-4-<PAGE>
SCOTSMAN INDUSTRIES, INC.
CONDENSED BALANCE SHEET
(In thousands)
<TABLE>
<CAPTION> April 3, January 2,
A S S E T S 1994 1994
----------- -------- --------
<S>
CURRENT ASSETS <C> <C>
Cash and temporary cash investments $ 4,669 $ 8,462
Trade accounts receivable, net of reserves of $1,654 and $1,548 35,034 28,578
Inventories 26,702 25,693
Deferred income taxes 3,697 3,748
Other current assets 1,916 1,701
-------- --------
Total current assets $ 72,017 $ 68,182
PROPERTIES AND EQUIPMENT, net of accumulated depreciation of $24,791 and $23,592 20,013 19,867
COST OF INVESTMENTS IN ACQUIRED BUSINESS IN EXCESS OF THE FAIR VALUE OF NET
TANGIBLE ASSETS AT ACQUISITION, net 11,449 11,320
OTHER NONCURRENT ASSETS 4,728 3,804
-------- --------
$108,207 $103,173
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Short-term debt and current maturities of long-term debt and capitalized
lease obligations $ 3,380 $ 2,707
Trade accounts payable 14,867 11,743
Accrued income taxes 2,565 2,087
Accrued expenses 13,659 15,327
-------- --------
Total current liabilities $ 34,471 $ 31,864
LONG-TERM DEBT AND CAPITALIZED LEASE OBLIGATIONS 29,449 29,469
DEFERRED INCOME TAXES 450 435
OTHER NONCURRENT LIABILITIES 7,343 7,411
-------- --------
Total Liabilities $ 71,713 $ 69,179
======== ========
SHAREHOLDERS' EQUITY:
Common stock, $.10 par value $ 722 $ 721
-5-<PAGE>
Additional paid in capital 20,613 20,557
Retained earnings 22,224 20,855
Deferred compensation and unrecognized pension cost (32) (54)
Foreign currency translation adjustments (5,689) (6,741)
Less: Common stock held in treasury (1,344) (1,344)
-------- --------
Total Shareholders' Equity $ 36,494 $ 33,994
-------- --------
$ 108,207 $ 103,173
======== ========
</TABLE>
See notes to unaudited condensed financial statements.
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SCOTSMAN INDUSTRIES, INC.
CONDENSED STATEMENT OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
For the Three Months Ended
--------------------------
April 3, 1994 April 4, 1993
------------- -------------
<S>
CASH FLOW FROM OPERATING ACTIVITIES: <C> <C>
Net income $ 1,544 $ 1,477
Adjustments to reconcile net income to net cash provided by
operating activities -
Depreciation and amortization 894 934
Change in assets and liabilities -
Trade accounts receivable (5,766) (5,033)
Inventories (435) (3,334)
Trade accounts payable and other liabilities 1,066 5,719
Other, net (879) (2,304)
-------- --------
Net cash used in operating activities $ (3,576) $ (2,541)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in properties and equipment $ (586) $ (578)
Proceeds from disposal of property, plant and equipment 6 -
Acquisition of Simag - (5,546)
-------- --------
Net cash used in investing activities $ (580) $ (6,124)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under long-term debt and capitalized lease
obligations $ (26) $ (32)
Dividends paid to shareholders (175) (175)
Short-term debt, net 525 5,844
-------- --------
Net cash provided by financing activities $ 324 $ 5,637
-------- --------
Effect of exchange rate changes on cash and temporary cash
investments 39 (408)
NET DECREASE IN CASH AND TEMPORARY CASH INVESTMENTS $ (3,793) $ (3,436)
-7-<PAGE>
CASH AND TEMPORARY CASH INVESTMENTS, beginning of period 8,462 5,202
-------- --------
CASH AND TEMPORARY INVESTMENTS, end of period $ 4,669 $ 1,766
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 136 $ 217
======== ========
Income taxes $ 722 $ 508
======== ========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Investment in properties and equipment through issuance of $ - $ -
capitalized lease obligations ======== ========
</TABLE>
See notes to unaudited condensed financial statements.
-8-<PAGE>
SCOTSMAN INDUSTRIES, INC.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(1) BASIS OF PRESENTATION:
The condensed consolidated financial statements include the accounts
of Scotsman Industries, Inc. and its consolidated subsidiaries (the
"Company").
As of January 4, 1993, the Company adopted Statement of Financial
Accounting Standards No. 106, 109, and 112. See Note 4 of Notes to
Unaudited Condensed Financial Statements. Except for the adoption of
the Accounting Standards implemented in the first quarter of 1993, all
accounting policies used in the preparation of the quarterly condensed
financial statements are consistent with the accounting policies
described in the notes to financial statements for the year ended
January 2, 1994, appearing in the Company's 1993 Annual Report to
Shareholders ("Annual Report"). In the opinion of management, the
interim financial statements reflect all adjustments which are
necessary for a fair presentation of the Company's financial position,
results of operations and cash flows for the interim periods
presented. The results for such interim periods are not necessarily
indicative of results for the full year. These financial statements
should be read in conjunction with the consolidated financial
statements and the accompanying notes to consolidated financial
statements included in the aforementioned Annual Report.
(2) INVENTORIES:
Inventories consisted of the following (in thousands):
<TABLE>
<CAPTION>
April 3, January 2,
1994 1994
-------- --------
<S> <C> <C>
Finished goods $15,090 $14,755
Work-in-process 2,966 2,232
Raw materials 8,646 8,706
-------- --------
Total inventories $26,702 $25,693
======== =</TABLE>=
======
(3) CONTINGENCIES:
Pursuant to the Lead Contamination Control Act of 1988 (the "Act"),
the United States Environmental Protection Agency (the "EPA") has
published lists of water cooler models which may have water tanks with
interior surface linings containing more than 0.2 percent lead or
which are not "lead free" because a tin/lead solder was used to
connect internal parts of the cooler. These lists included certain
-9-<PAGE>
models of water coolers manufactured in the past by Halsey Taylor, a
former division of a Company subsidiary. The Act provides for the
issuance of a remedial action order by the United States Consumer
Product Safety Commission (the "CPSC") against the manufacturer of any
cooler listed by the EPA as containing a tank having an interior
surface lining with more than 0.2 percent lead.
On May 25, 1990, the CPSC accepted a Consent Order Agreement (the
"Consent Agreement") between the CPSC staff and the Company's
subsidiary under which the subsidiary agreed to conduct a
replacement/refund program for any Halsey Taylor tank-style water
coolers manufactured before April 1, 1979, which are water tested by
the cooler owner and shown to contribute more than twenty parts per
billion of lead to the water. The Consent Agreement resolves all
claims that the CPSC might have under the Act for issuance of an order
requiring the repair, replacement, or recall and refund of the
purchase price of water coolers manufactured by the Halsey Taylor
division before the date of the Consent Agreement.
The Company has made provisions to cover expenditures that it expects
to result from the Act. The actual cost to the Company will depend
upon, among other things, the number of cooler owners participating in
the replacement/refund program. Although no assurance can be given,
the Company believes, based upon its present expectations, that
expenditures resulting from the Act will not have a material adverse
effect on the Company's financial condition or its results of
operations. While the Company sold the assets of its Halsey Taylor
business in July, 1991, the purchaser of the Halsey Taylor business
did not assume any liability for this contingency.
On March 26, 1993, Remcor Products Company filed a lawsuit against the
Company's subsidiary, Scotsman Group, Inc. and Scotsman Group's
subsidiary, Booth, Inc., in the United States District Court for the
Northern District of Illinois. In its Complaint, Remcor alleged that
certain ice/drink dispensers made and sold by Scotsman Group and Booth
infringe a patent owned by Remcor relating to a cold plate system.
The Complaint seeks an unspecified amount of compensatory damages,
treble damages for willful infringement, prejudgment interest and
attorneys' fees, and also a permanent injunction from further alleged
acts of infringement.
During the course of discovery, Remcor has asserted that it has
suffered damages attributable to the Company's alleged infringement of
approximately $8.24 million during the period from 1989 through year-
end 1993, exclusive of treble damages, prejudgment interest and
attorneys' fees. This damages claim consists of claims for lost
profits and a royalty on certain sales.
The Company has denied that any of its products infringe Remcor's
patent and has asserted that the Remcor patent is invalid and
unenforceable. The Company also has strongly disputed Remcor's
contention that it is appropriate to apply a lost profits measure of
damages in this case and contended that, even assuming infringement,
validity and enforceability of the patent, the amount of compensatory
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damages for sales occurring through year-end 1993 would be a royalty
of approximately $500,000.
The Company is vigorously defending this lawsuit. Sales of ice/drink
dispensers accounted for less than 5 percent of the Company's
consolidated net sales in 1993. Although no assurances can be given,
after consultation with legal counsel, the Company does not believe
that this lawsuit will have a material adverse effect upon the
financial condition of the Company or its results of operations.
(4) CUMULATIVE EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES:
Effective January 4, 1993, the Company adopted Statement of Financial
Accounting Standards No. 106, "Employers' Accounting for Post-
retirement Benefits Other Than Pensions" ("SFAS 106") on the immediate
recognition basis. The new standard requires that the expected cost
of post-retirement benefits be charged to expense during the years
that the employees render service. Previously, the Company recognized
these costs on a pay-as-you-go basis.
The cumulative effect of this accounting change was to decrease income
for the three months ended April 4, 1993 by $1,660,000 ($1,029,000, or
$0.15 per share, after-tax), representing the amount of unfunded
obligation measured as of January 4, 1993. This accounting change is
not expected to materially impact future operating results and is not
expected to affect the Company's cash flows because the Company plans
to continue paying the cost of post-retirement benefits when incurred.
Other than the cumulative catch-up, the impact of this accounting
change on the first quarter of 1993 was not material.
Effective January 4, 1993, the Company changed its method of
accounting for income taxes as a result of the required adoption of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"). SFAS 109 requires a change in accounting
for income taxes to an asset and liability approach. The cumulative
effect of this change in 1993 was a favorable impact of $1,301,000, or
$.19 per share. The cumulative effect resulted primarily from the
recognition of the remainder of Italian tax benefits which resulted
from a prior year reorganization and adjustments for rate differences.
Effective January 4, 1993, the Company also adopted the Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Post-employment Benefits" ("SFAS 112"). The statement requires
accrual accounting for benefits provided to former or inactive
employees after employment but before retirement. The Company
previously accounted for a certain portion of these post-employment
benefits on a pay-as-you-go basis. The impact of the change to SFAS
112, was an unfavorable pre-tax amount of $508,000 ($243,000, net of
tax or $.03 per share). Other than the effect of the cumulative
catch-up, the impact on pre-tax income of this accounting change for
the first quarter of 1993 was not material.
(5) ACQUISITION OF SIMAG:
-11-<PAGE>
The Company's Frimont, S.p.A. subsidiary acquired on January 8, 1993,
the assets of Simag, an ice machine manufacturer located in Milan,
Italy. The method of accounting used for the combination was the
purchase method. The results of Simag are included in the income
statement for the Company beginning after January 8, 1993. Simag was
acquired for $5.5 million and no shares of stock were or will be
issued as a result of this acquisition. Goodwill of $4.4 million
resulting from the Simag acquisition will be amortized over 40 years
using the straight-line method. No contingent payments, options, or
commitments were specified in the acquisition agreement of Simag. Pro
forma information has not been presented due to lack of materiality.
(6) SUBSEQUENT EVENT:
On April 29, 1994, the Company completed the acquisition of The
Delfield Company ("Delfield") and Whitlenge Drink Equipment Limited
("Whitlenge") for approximately $69 million in a combination of cash,
preferred stock and common stock. Scotsman shareholders approved the
issuance of common and preferred stock related to the acquisition at a
special shareholders meeting held on April 28, 1994.
The method of accounting which will be used for the combination will
be the purchase method. Allocation of the purchase price has not been
finalized; however, it is expected to be completed within twelve
months of the acquisition. The acquisition price included: i) $30.4
million in cash, ii) 1.2 million shares of common stock, iii) 2.0
million shares of Series A $0.62 cumulative convertible preferred
stock, with an aggregate liquidation preference of $22.5 million and
which are initially convertible into 1,525,400 shares of common stock,
and iv) up to 667,000 shares of additional common stock if the
businesses of Delfield and Whitlenge meet a specified level of
earnings before interest, income taxes, depreciation and amortization
in fiscal year 1994. In addition, Scotsman also assumed Delfield and
Whitlenge debt of approximately $35 million.
Delfield, headquartered in Mt. Pleasant, Michigan, manufactures and
sells refrigerated foodservice equipment, primarily in the United
States. Whitlenge, located near Birmingham, England, manufactures and
sells drink dispensing equipment in Western Europe.
Restating the Company's fiscal year 1993 results to reflect the
acquisition as if it took place as of the first day of the fiscal year
1993 would have resulted in unaudited pro forma net sales of $281.8
million and net income before the cumulative effect of accounting
changes of $10.5 million, or $1.08 per share (including the dilutive
impact of the additional shares issued in April of 1994). Restating
the Company's first quarter 1994 results to reflect the acquisition as
if it took place as of the first day of the fiscal year 1994 would
have resulted in unaudited pro forma net sales of $66.9 million, net
income before cumulative effect of accounting changes of $2.5 million,
or $.25 per share (including the dilutive effect of the additional
shares issued in April of 1994). Pro forma results are based on
assumptions and estimates and are not necessarily indicative of the
results of operations of the Company as they might have been had the
transaction occurred as discussed above.
-12-<PAGE>
In order to provide the financing for the cash consideration paid in
connection with the acquisition, the refinancing of approximately $35
million in existing indebtedness of Delfield and Whitlenge,
replacement letters of credit backing approximately $9 million of the
Company's outstanding industrial revenue bonds, working capital for
the Company and its subsidiaries following the acquisition, and
transaction costs associated with the acquisition, the Company entered
into a Credit Agreement, dated as of April 29, 1994 (the "New Credit
Agreement"), with a group of lenders for which The First National Bank
of Chicago ("First Chicago") acted as agent. The New Credit Agreement
establishes a revolving credit facility in the amount of $90 million.
Under the terms of the New Credit Agreement, the revolving credit
facility will reduce by $7 million at the end of years one and two,
$12 million at the end of year three, and $5 million at the end of
each of years four and five, with the remaining balance due at the end
of year six. Borrowings under the New Credit Agreement will bear
interest at a floating rate based upon, at the Company's option, (i)
the higher of First Chicago's corporate base rate or the Federal funds
rate plus 1/2 percent per annum, or (ii) the rate offered by First
Chicago for deposits in the relevant Eurocurrency, plus an applicable
margin. The applicable margin will vary between 0.75 percent and
1.125 percent per annum, depending upon the Company's ratio of
earnings before interest, taxes and amortization to total interest.
The New Credit Agreement contains various financial covenants that,
among other things, require the Company to maintain, on a consolidated
basis, specified leverage, interest expense coverage and cash flow
coverage ratios and a minimum adjusted consolidated tangible net
worth. The minimum adjusted consolidated tangible net worth covenant
has the effect of restricting the amount of the Company's dividends to
its shareholders to an amount equal to $2,000,000 plus 40% of the sum
of cumulative net income from May 2, 1994 forward and the net cash
proceeds from the issuance of equity securities after April 29, 1994.
The Company is precluded from paying dividends to its shareholders if
a default or an event which, but for the lapse of time or the giving
of notice, or both, would constitute a default, under the New Credit
Agreement has occurred and is continuing or would occur after giving
effect to the payment of such dividend.
Concurrently with the execution of the New Credit Agreement, the
Company entered into amended and restated note purchase agreements,
under which $20 million of its 11.43 percent Senior Notes due May 1,
1998 are outstanding, in order to, among other things, conform the
financial covenants in those agreements to the covenants contained in
the New Credit Agreement. The Company also terminated the $25 million
Revolving Credit Agreement which had been in place prior to the
acquisition. No amounts were outstanding under that agreement.
-13-<PAGE>
SCOTSMAN INDUSTRIES, INC.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
---------------------
Net sales for the first quarter of 1994 were $38.0 million, up
slightly from sales of $37.9 million for the first quarter of 1993.
Using constant foreign currency exchange rates, net sales for the
first quarter of 1994 were up $0.9 million or 2.5 percent compared to
the first quarter of 1993.
Net income for the first quarter of 1994 was up $0.1 million or 4.5
percent compared to the first quarter of 1993 which included the
cumulative effect of changes in accounting principles as discussed
below.
Scotsman's worldwide ice machine sales representing approximately 87
percent of the Company's sales for the first quarter of 1994 were up
2.5 percent in U.S. dollars, or 4.9 percent, using constant foreign
currency exchange rates. U.S. ice machine sales for the first quarter
of 1994 were up 4.6 percent over the first quarter of 1993, reflecting
an improving domestic market. Ice machine sales from the Company's
European businesses were down 2.4 percent in U.S. dollars but were up
5.8 percent in local currency. European ice machine sales were
stronger as a result of slightly improved sales in Western Europe, and
increased sales in developing markets such as Africa and the Far East.
Sales of other product lines of the Company's European businesses
(bakery equipment, commercial refrigerators, etc.) representing
approximately 2 percent of the Company's sales for the first quarter
of 1994 declined in lire and declined even further in dollars as a
result of continued weakness in Western European markets, especially
the Italian market.
Sales of dispensing equipment representing approximately 11 percent of
the Company's sales for the first quarter of 1994 were down 8.3
percent compared to sales in the same quarter of the prior year due
to lower orders from a major customer.
The Company's gross profit decreased by $0.5 million and gross profit
margin decreased 1.3 points, from 30.7 to 29.4 percent of sales. This
change was primarily due to inefficiencies and lower production levels
resulting from the relocation and start up of the Crystal Tips
operation of Booth, Inc.
Selling and administrative expenses decreased by $0.4 million or 5.4
percent due to lower sales commissions and other selling expenses at
certain domestic units as well as from translation of Italian units'
expenses at weaker lira rates.
Interest expense, net, decreased by $0.2 million or 17.8 percent when
compared to the prior year's first quarter. The decrease was
-14-<PAGE>
attributable to a lower balance of Italian short-term borrowings in
1994 when compared to 1993. Foreign short-term debt increased
substantially in the first quarter of the prior year, due to the
acquisition of Simag in January, 1993 by Scotsman's Frimont
subsidiary.
Effective January 4, 1993, the Company changed its method of
accounting for income taxes as a result of the required adoption of
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" ("SFAS 109"). SFAS 109 requires a change in accounting
for income taxes to an asset and liability approach. The cumulative
effect of the change in 1993 was a favorable impact of $1.3 million,
or $.19 per share.
Effective January 4, 1993, the Company also adopted the Statement of
Financial Accounting Standards No. 112, "Employers' Accounting for
Post-Employment Benefits" ("SFAS 112"). The statement requires
accrual accounting for benefits provided to former or inactive
employees after employment but before retirement. The Company
previously accounted for a certain portion of these post-employment
benefits on a pay-as-you-go basis. The first quarter 1993 impact of
the change to SFAS 112 was an unfavorable pretax amount of $0.5
million ($0.2 million, after-tax or $.03 per share).
Effective January 4, 1993, the Company also changed its method of
accounting for retiree health care benefits as required by Statement
of Financial Accounting Standards No. 106, "Employers' Accounting for
Post-retirement Benefits Other Than Pensions" ("SFAS 106"). The
statement requires that the expected cost of benefits other than
pensions must be charged to expense during the years that employees
render service. The Company formerly recognized retiree health care
costs on a pay-as-you-go basis. The Company recognized in the first
quarter of 1993 immediately as a charge against earnings the entire
portion of future retiree benefit costs of $1.7 million ($1.0 million
after-tax) already earned by both active and retired employees up to
January 4, 1993. The after-tax impact of this accounting change in
the first quarter of 1993 was $0.15 per share.
The cumulative effect of the changes in accounting principles
implemented in the first quarter of 1993 was $29,000.
On April 29, 1994, the Company acquired The Delfield Company and
Whitlenge Drink Equipment Limited. To effect this acquisition, the
Company established a new $90 Credit Agreement with a group of banks,
which replaced the existing $25 million Credit Agreement. The Company
also amended other existing long-term debt agreements. See Note 6 of
Notes to the Condensed Financial Statements for additional information
regarding this subsequent event.
Financial Condition
-------------------
Cash and temporary cash investments decreased $3.8 million from
December of 1993 primarily due to working capital needs of the
business. Excluding the foreign exchange impact on inventory,
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inventory increased by $0.4 million from December of 1993, which
reflects normal seasonal activity in anticipation of the Company's
major selling season partially offset by Crystal Tips inventory
reductions. Excluding the impact of changes in foreign exchange
rates, accounts receivable was $5.8 million higher than December, 1993
primarily resulting from the sales increase when comparing the first
quarter of 1994 to the fourth quarter of 1993. Excluding the impact
of changes in foreign exchange rates, trade accounts payable was $2.8
million higher than December, 1993 which also reflects increased
seasonal activity.
Other non-current assets were also higher than December of 1993 by
$0.9 million primarily due to capitalization of costs relating to the
acquisition of The Delfield Company and Whitlenge Drink Equipment
Limited which is discussed in Note 6 of Notes to the Condensed
Consolidated Financial Statements.
Shareholders' equity increased by $2.5 million from December of 1993
primarily due to net income of $1.5 million for the first quarter of
1994 along with changes in accumulated translation of $1.1 million
during the first quarter. These changes which were partially offset
by modest increases in foreign short-term borrowings caused the debt-
to-equity ratio to remain constant at 0.9 to 1 as of April 3, 1994 and
January 2, 1994.
On February 17, 1994 the Company's Board of Directors declared a
dividend of 2 1/2 cents per share payable to shareholders of record on
March 31, 1994.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 10.1 Credit Agreement among Scotsman Group
Inc. and the other parties named
therein, as Borrowers, the Lenders named
therein and The First National Bank of
Chicago, as Agent, dated as of April 29,
1994.
Exhibit 10.2 Amended and Restated Note Purchase
Agreement dated as of April 29, 1994, as
separately entered into among Scotsman
Group Inc., Scotsman Industries, Inc.,
and each of the following: Connecticut
General Life Insurance Company,
individually and for the account of one
or more separate accounts, Cigna
Property and Casualty Insurance Company,
INA Life Insurance Company of New York,
Life Insurance Company of North America,
Ohio National Life Assurance Corporation
-16-<PAGE>
and Southern Farm Bureau Life Insurance
Company.
Exhibit 10.3 $5,000,000 Amended and Restated
Promissory Note made as of April 29,
1994 by Scotsman Group Inc. to Comerica
Bank-Illinois.
Exhibit 10.4 Amendment No. 6 to the Reimbursement
Agreement, dated April 29, 1994, among
Scotsman Group Inc., Scotsman
Industries, Inc. and The Bank of Nova
Scotia (amending the Reimbursement
Agreement, dated as of March 1, 1988,
among Scotsman Group Inc., Scotsman
Industries, Inc. and PNC Bank, National
Association).
(b) The Registrant filed two current reports on Form
8-K dated January 13, 1994 and February 18, 1994,
both reporting under Item 5, Other Events.
-17-<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
SCOTSMAN INDUSTRIES, INC.
Date: May 16, 1994 By: /s/ Donald D. Holmes
------------ ------------------------
Donald D. Holmes
Vice President-Finance
and Secretary
-18-<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Description Page Number
<S> <C> <C>
10.1 Credit Agreement among Scotsman Group
Inc. and the other parties named
therein, as Borrowers, the Lenders named
therein and The First National Bank of
Chicago, as Agent, dated as of April 29,
1994.
10.2 Amended and Restated Note Purchase
Agreement dated as of April 29, 1994, as
separately entered into among Scotsman
Group Inc., Scotsman Industries, Inc.,
and each of the following: Connecticut
General Life Insurance Company,
individually and for the account of one
or more separate accounts, Cigna
Property and Casualty Insurance Company,
INA Life Insurance Company of New York,
Life Insurance Company of North America,
Ohio National Life Assurance Corporation
and Southern Farm Bureau Life Insurance
Company.
10.3 $5,000,000 Amended and Restated
Promissory Note made as of April 29,
1994 by Scotsman Group Inc. to Comerica
Bank-Illinois.
10.4 Amendment No. 6 to the Reimbursement
Agreement, dated April 29, 1994, among
Scotsman Group Inc., Scotsman
Industries, Inc. and The Bank of Nova
Scotia (amending the Reimbursement
Agreement, dated as of March 1, 1988,
among Scotsman Group Inc., Scotsman
Industries, Inc. and PNC Bank, National
Association).
</TABLE>
-19-<PAGE>
<PAGE>
EXHIBIT 10.1
EXECUTION COPY
CREDIT AGREEMENT
AMONG
SCOTSMAN GROUP INC.
AND THE OTHER PARTIES NAMED HEREIN,
as Borrowers,
THE LENDERS NAMED HEREIN
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Agent
DATED AS OF
April 29, 1994<PAGE>
TABLE OF CONTENTS
-----------------
ARTICLE I
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
THE CREDITS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
2.1. Advances . . . . . . . . . . . . . . . . . . . . . . . 24
2.2. Ratable Loans . . . . . . . . . . . . . . . . . . . . . 25
2.3. Types of Advances . . . . . . . . . . . . . . . . . . . 25
2.4. Commitment Fee; Reductions in Aggregate Commitment . . 25
2.5. Minimum Amount of Each Advance . . . . . . . . . . . . 26
2.6. Optional Principal Payments . . . . . . . . . . . . . . 26
2.7. Mandatory Commitment Reductions . . . . . . . . . . . . 26
2.8. Method of Selecting Types and Interest Periods for New
Advances . . . . . . . . . . . . . . . . . . . . . . . 27
2.9. Conversion and Continuation of Outstanding Advances . . 28
2.10. Changes in Interest Rate, etc. . . . . . . . . . . . . 29
2.11. Rates Applicable After Default . . . . . . . . . . . . 30
2.12. Method of Payment . . . . . . . . . . . . . . . . . . 30
2.13. Notes; Telephonic Notices . . . . . . . . . . . . . . 31
2.14. Interest Payment Dates; Interest and Fee Basis . . . . 32
2.15. Notification by Agent . . . . . . . . . . . . . . . . 32
2.16. Lending Installations . . . . . . . . . . . . . . . . 33
2.17. Non-Receipt of Funds by the Agent . . . . . . . . . . 33
2.18. Withholding Tax Exemption . . . . . . . . . . . . . . 33
2.19. Agent's Fees . . . . . . . . . . . . . . . . . . . . . 35
2.20. Facility Fee . . . . . . . . . . . . . . . . . . . . . 35
2.21. Determination, Denomination and Redenomination of
Alternative Currency Advances . . . . . . . . . . . . . 35
2.22. Facility Letters of Credit . . . . . . . . . . . . . . 35
2.22.1 Issuance of Facility Letters of Credit . . . 35
2.22.2 Participating Interests . . . . . . . . . . . 36
2.22.3 Facility Letter of Credit Reimbursement
Obligations . . . . . . . . . . . . . . . . . . . 36
2.22.4 Procedure for Issuance . . . . . . . . . . . 39
2.22.5 Nature of the Lenders' Obligations . . . . . 39
2.22.6 Facility Letter of Credit Fees . . . . . . . 40
ARTICLE III
CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . . . . . . 40
3.1. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 41
3.2. Yield Protection . . . . . . . . . . . . . . . . . . . 42
3.3. Changes in Capital Adequacy Regulations . . . . . . . . 44
3.4. Availability of Types of Advances . . . . . . . . . . . 44
3.5. Funding Indemnification . . . . . . . . . . . . . . . . 44
3.6. Lender Statements; Survival of Indemnity . . . . . . . 45
3.7. Availability of Alternative Currency . . . . . . . . . 45<PAGE>
ARTICLE IV
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . 46
4.1. Initial Loan and Facility Letter of Credit Issuance . . 46
4.2. Each Future Advance and Facility Letter of Credit
Issuance . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE V
REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . 49
5.1. Existence and Standing . . . . . . . . . . . . . . . . 49
5.2. Authorization and Validity . . . . . . . . . . . . . . 49
5.3. Compliance with Laws and Contracts . . . . . . . . . . 50
5.4. Governmental Consents . . . . . . . . . . . . . . . . . 50
5.5. Financial Statements . . . . . . . . . . . . . . . . . 51
5.6. Material Adverse Change . . . . . . . . . . . . . . . . 52
5.7. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.8. Litigation and Contingent Obligations . . . . . . . . . 52
5.9. Capitalization . . . . . . . . . . . . . . . . . . . . 53
5.10. ERISA . . . . . . . . . . . . . . . . . . . . . . . . 53
5.11. Defaults . . . . . . . . . . . . . . . . . . . . . . . 54
5.12. Federal Reserve Regulations . . . . . . . . . . . . . 54
5.13. Investment Company . . . . . . . . . . . . . . . . . . 54
5.14. Certain Fees . . . . . . . . . . . . . . . . . . . . . 54
5.15. Representations and Warranties Incorporated From
Purchase Agreement and Merger Agreement . . . . . . . . 54
5.16. Solvency . . . . . . . . . . . . . . . . . . . . . . . 54
5.17. Ownership of Properties . . . . . . . . . . . . . . . 55
5.18. Indebtedness . . . . . . . . . . . . . . . . . . . . . 55
5.19. Employee Controversies . . . . . . . . . . . . . . . . 55
5.20. Material Agreements . . . . . . . . . . . . . . . . . 55
5.21. Acquisition and Merger Documents . . . . . . . . . . . 56
5.22. Environmental Laws . . . . . . . . . . . . . . . . . . 56
5.23. Insurance . . . . . . . . . . . . . . . . . . . . . . 57
5.24. Disclosure . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE VI
COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
6.1. Financial Reporting . . . . . . . . . . . . . . . . . . 58
6.2. Use of Proceeds . . . . . . . . . . . . . . . . . . . . 61
6.3. Notice of Default . . . . . . . . . . . . . . . . . . . 61
6.4. Conduct of Business . . . . . . . . . . . . . . . . . . 61
6.5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 62
6.6. Insurance . . . . . . . . . . . . . . . . . . . . . . . 62
6.7. Compliance with Laws . . . . . . . . . . . . . . . . . 62
6.8. Maintenance of Properties . . . . . . . . . . . . . . . 62
6.9. Inspection . . . . . . . . . . . . . . . . . . . . . . 62
6.10. Capital Stock and Dividends . . . . . . . . . . . . . 62
6.11. Indebtedness . . . . . . . . . . . . . . . . . . . . . 63
6.12. Merger . . . . . . . . . . . . . . . . . . . . . . . . 64
6.13. Sale of Assets . . . . . . . . . . . . . . . . . . . . 64
6.14. Sale and Leaseback . . . . . . . . . . . . . . . . . . 65
-ii-<PAGE>
6.15. Investments and Purchases . . . . . . . . . . . . . . 65
6.16. Liens . . . . . . . . . . . . . . . . . . . . . . . . 67
6.17. Capital Expenditures . . . . . . . . . . . . . . . . . 68
6.18. Lease Rentals . . . . . . . . . . . . . . . . . . . . 68
6.19. Affiliates . . . . . . . . . . . . . . . . . . . . . . 68
6.20. Amendments to Agreements . . . . . . . . . . . . . . . 68
6.21. Environmental Matters . . . . . . . . . . . . . . . . 68
6.22. Agreements as to Prohibited Acts . . . . . . . . . . . 69
6.23. Change in Corporate Structure; Fiscal Year . . . . . . 69
6.24. Inconsistent Agreements . . . . . . . . . . . . . . . 70
6.25. Financial Covenants . . . . . . . . . . . . . . . . . 70
6.25.1. Minimum Adjusted Consolidated Tangible Net
Worth . . . . . . . . . . . . . . . . . . . . . . 70
6.25.2. Leverage Ratio . . . . . . . . . . . . . . . . 70
6.25.3. Interest Expense Coverage Ratio . . . . . . . 71
6.25.4. Cash Flow Coverage Ratio . . . . . . . . . . . 71
6.26. Tax Consolidation . . . . . . . . . . . . . . . . . . 72
6.27. ERISA Compliance . . . . . . . . . . . . . . . . . . . 72
6.28. Guaranties . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE VII
DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES . . . . . . . . . 75
8.1. Acceleration . . . . . . . . . . . . . . . . . . . . . 75
8.2. Amendments . . . . . . . . . . . . . . . . . . . . . . 76
8.3. Preservation of Rights . . . . . . . . . . . . . . . . 77
8.4. Application of Funds . . . . . . . . . . . . . . . . . 77
ARTICLE IX
GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . 78
9.1. Survival of Representations . . . . . . . . . . . . . . 78
9.2. Governmental Regulation . . . . . . . . . . . . . . . . 78
9.3. Headings . . . . . . . . . . . . . . . . . . . . . . . 78
9.4. Entire Agreement . . . . . . . . . . . . . . . . . . . 78
9.5. Several Obligations; Benefits of this Agreement . . . . 78
9.6. Expenses; Indemnification . . . . . . . . . . . . . . . 79
9.7. Numbers of Documents . . . . . . . . . . . . . . . . . 80
9.8. Accounting . . . . . . . . . . . . . . . . . . . . . . 80
9.9. Severability of Provisions . . . . . . . . . . . . . . 80
9.10. Nonliability of Lenders . . . . . . . . . . . . . . . 80
9.11. CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . 81
9.12. CONSENT TO JURISDICTION . . . . . . . . . . . . . . . 81
9.13. WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . 81
9.14. Disclosure . . . . . . . . . . . . . . . . . . . . . . 82
9.15. Counterparts . . . . . . . . . . . . . . . . . . . . . 82
-iii-<PAGE>
ARTICLE X
THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
10.1. Appointment . . . . . . . . . . . . . . . . . . . . . 82
10.2. Powers . . . . . . . . . . . . . . . . . . . . . . . 82
10.3. General Immunity . . . . . . . . . . . . . . . . . . 82
10.4. No Responsibility for Loans, Recitals, etc. . . . . . 83
10.5. Action on Instructions of Lenders . . . . . . . . . . 83
10.6. Employment of Agents and Counsel . . . . . . . . . . 83
10.7. Reliance on Documents; Counsel . . . . . . . . . . . 83
10.8. Agent's Reimbursement and Indemnification . . . . . . 83
10.9. Rights as a Lender . . . . . . . . . . . . . . . . . 84
10.10. Lender Credit Decision . . . . . . . . . . . . . . . 84
10.11. Successor Agent . . . . . . . . . . . . . . . . . . . 84
10.12. Notice of Default . . . . . . . . . . . . . . . . . . 85
ARTICLE XI
SETOFF; RATABLE PAYMENTS . . . . . . . . . . . . . . . . . . . . 85
11.1. Setoff . . . . . . . . . . . . . . . . . . . . . . . 85
11.2. Ratable Payments . . . . . . . . . . . . . . . . . . 85
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . . . . . . 86
12.1. Successors and Assigns . . . . . . . . . . . . . . . 86
12.2. Participations . . . . . . . . . . . . . . . . . . . 86
12.2.1. Permitted Participants; Effect . . . . . . . . 86
12.2.2. Voting Rights . . . . . . . . . . . . . . . . 87
12.2.3. Benefit of Setoff . . . . . . . . . . . . . . 87
12.3. Assignments . . . . . . . . . . . . . . . . . . . . . 87
12.3.1. Permitted Assignments . . . . . . . . . . . . 87
12.3.2. Effect; Effective Date . . . . . . . . . . . . 88
12.4. Dissemination of Information . . . . . . . . . . . . 88
12.5. Tax Treatment . . . . . . . . . . . . . . . . . . . . 89
ARTICLE XIII
NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
13.1. Giving Notice . . . . . . . . . . . . . . . . . . . . 89
13.2. Change of Address . . . . . . . . . . . . . . . . . . 89
-iv-<PAGE>
EXHIBITS
--------
Exhibit A-1 - Domestic Guaranty
Exhibit A-2 - Foreign Guaranty
Exhibit B - Revolving Credit Note
Exhibit C-1 - Application and Reimbursement Agreement for
Standby Letter of Credit
Exhibit C-2 - Application and Reimbursement Agreement for
Commercial Letter of Credit
Exhibit D - Compliance Certificate
Exhibit E - Privity Letter
Exhibit F - Assignment Agreement
SCHEDULES
---------
Schedule 2.8 - Lending Installations
Schedule 5.3 - Approvals and Consents
Schedule 5.4 - Governmental Consents
Schedule 5.5 - Consolidated Pro Forma
Schedule 5.8 - Litigation and Material Contingent
Obligations
Schedule 5.9 - Capitalization
Schedule 5.10 - ERISA
Schedule 5.17(a) - Owned and Leased Properties
Schedule 5.17(b) - Intellectual Property
Schedule 5.18 - Indebtedness
Schedule 5.22 - Environmental
Schedule 5.23 - Insurance
Schedule 6.15 - Investments
-v-<PAGE>
CREDIT AGREEMENT
This Credit Agreement, dated as of April 29, 1994, is among
Scotsman Group Inc., a Delaware corporation, The Delfield Company, a
Delaware corporation, Scotsman Drink Limited, a private company
limited by shares registered in England, Whitlenge Drink Equipment
Limited, a private company limited by shares registered in England,
Frimont S.p.A., a societa per azioni incorporated with limited
liability in the Republic of Italy, and Castel MAC S.p.A., a societa
per azioni incorporated with limited liability in the Republic of
Italy, the Lenders and The First National Bank of Chicago,
individually and as Agent.
RECITALS:
--------
A. Industries (as this and other capitalized terms used in
these recitals are hereinafter defined) is party to a certain Purchase
Agreement, pursuant to which Scotsman Drink, an indirect wholly-owned
subsidiary of Industries, is purchasing all of the capital stock of
Whitlenge Acquisition concurrently with the execution of this
Agreement;
B. Industries is party to a certain Merger Agreement, pursuant
to which Acquisition Co., a direct wholly-owned subsidiary of
Industries, is merging with and into DFC with DFC being the surviving
corporation in such merger, concurrently with the execution of this
Agreement; and
C. The Borrowers have requested the Lenders to make financial
accommodations to them in the aggregate principal amount of
$90,000,000, the proceeds of which the Borrowers will use (a) to
finance the cash payments to be made pursuant to the Purchase
Agreement and the Merger Agreement and to pay related fees and
expenses, (b) to refinance certain outstanding Indebtedness of
Industries and its Subsidiaries, (c) to finance acquisitions to be
made by Industries and its Subsidiaries and any redemption of
Industries' Series B preferred stock and certain other preferred stock
issued by Whitlenge Acquisition, and (d) for the working capital needs
of Group and its subsidiaries.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Group, Delfield, Scotsman Drink, Whitlenge, Frimont,
Castel MAC, the Lenders and the Agent hereby agree as follows:
ARTICLE I
-1-<PAGE>
DEFINITIONS
-----------
As used in this Agreement:
"Accounts" means all present and future rights of a Person to
payment for goods sold or leased or for services rendered, whether or
not they have been earned by performance.
"Acquisition" means the acquisition by Scotsman Drink of all of
the outstanding capital stock of Whitlenge Acquisition pursuant to the
Purchase Agreement.
"Acquisition Co." means Scotsman Acquisition Corporation, a
Delaware corporation.
"Acquisition Documents" means the Purchase Agreement and the
other documents, certificates and agreements delivered in connection
with the Acquisition.
"Adjusted Consolidated Tangible Net Worth" means at any date (a)
the Consolidated Net Worth of Industries and its Subsidiaries, minus
(b) the consolidated Intangible Assets of Industries and its
Subsidiaries, plus (c) the Intangible Assets acquired by Industries or
any Subsidiary in connection with or resulting from the transactions
contemplated by the Merger Agreement and the Purchase Agreement (less
any depreciation or amortization thereof through the date of
determination), plus (d) the Intangible Assets acquired by Industries
or any Subsidiary in connection with or resulting from any Purchases
consummated after the date hereof in accordance with Section 6.15
which, in the aggregate, do not exceed the lesser of (i) $12,000,000
and (ii) sixty percent (60%) of the aggregate purchase price
(including consideration paid and liabilities assumed) of such
Purchases.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made on the same Borrowing Date by the
Lenders to the same Borrower of the same Type and, in the case of
Eurocurrency Advances, denominated in the same Permitted Currency and
for the same Interest Period.
"Affiliate" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with
such Person. A Person shall be deemed to control another Person if
the controlling Person owns 10% or more of any class of voting
securities (or other ownership interests) of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the
direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
-2-<PAGE>
"Agent" means First Chicago in its capacity as agent for the
Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of
all the Lenders hereunder.
"Agreement" means this Credit Agreement, as it may be amended,
modified or restated and in effect from time to time.
"Agreement Accounting Principles" means generally accepted United
States accounting principles as in effect from time to time, applied
in a manner consistent with that used in preparing the financial
statements referred to in Section 5.5; provided, that for purposes of
determining compliance with the financial covenants set forth in
Section 6.25, "Agreement Accounting Principles" shall mean such
accounting principles as in effect on the date of this Agreement,
together with any such other accounting principles which take effect
after the date of this Agreement to the extent agreed to by Group and
the Required Lenders.
"Alternative Currency" shall mean, subject to availability
pursuant to Section 3.7 and to the extent freely transferable and
convertible into Dollars, the lawful currencies of France, Germany,
Italy, Japan, Switzerland, Canada and the United Kingdom and, subject
to availability and to the terms and conditions of this Agreement,
such other freely transferable and convertible foreign currencies as
requested by Group and acceptable to Agent and the Required Lenders,
in their reasonable discretion.
"Applicable Eurocurrency Margin" means, subject to the last
sentence of this definition, for any period, the applicable of the
following percentages in effect with respect to such period as the
Interest Expense Coverage Ratio of Industries shall fall within the
indicated ranges:
<TABLE>
<CAPTION>
Applicable
Interest Expense Coverage Ratio Eurocurrency Margin
------------------------------- -------------------
But less than
Greater than or equal to
------------ -------------
<S> <C> <C>
7.0:1.0 ------- .750%
6.0:1.0 7.0:1.0 1.000%
------- 6.0:1.0 1.125%
</TABLE>
-3-<PAGE>
The Interest Expense Coverage Ratio shall be calculated by Industries
as of the end of each of its Fiscal Quarters, commencing with the
second Fiscal Quarter of 1994, and shall be reported to the Agent
pursuant to a certificate executed by an Authorized Officer of
Industries and delivered in accordance with Section 6.1(a) or (b)
hereof, as applicable. The Applicable Eurocurrency Margin shall be
adjusted, if necessary, as of the last day of each Fiscal Quarter,
giving effect to the Interest Expense Coverage Ratio as of the last
day of the immediately preceding Fiscal Quarter; provided, that if
such certificate, together with the financial statements to which such
certificate relates, is not delivered to the Agent at least three (3)
Business Days prior to the last day of the next Fiscal Quarter (except
with respect to such information relating to the first Fiscal Quarter
of each year, which shall be delivered no later than the last day of
the next Fiscal Quarter), then the Applicable Eurocurrency Margin
shall be equal to 1.125% until the next adjustment date. Until
adjusted as described above, the Applicable Eurocurrency Margin shall
be equal to 1.125%.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Asset Disposition" means any sale, lease or other disposition of
any asset of Industries or any Subsidiary in a single transaction or
in a series of related transactions, other than (a) the sale of
inventory in the ordinary course of business, (b) sales, leases or
other dispositions (i) by Industries or any Domestic Subsidiary to
Industries or any Wholly-Owned Domestic Subsidiary or (ii) by any
Foreign Subsidiary to Industries or any Wholly-Owned Subsidiary, (c)
sales, leases or other dispositions of used, worn-out or surplus
equipment in the ordinary course of business and (d) other sales,
leases and dispositions of any Property in a single transaction or
series of related transactions so long as (x) the fair market value of
the Property transferred in any such single transaction or series of
related transactions does not exceed $5,000 and (y) the aggregate fair
market value of all such Property transferred after the date hereof
does not exceed $1,000,000.
"Authorized Officer" means, with respect to Industries or any
Borrower, any of its chief financial officer, chief executive officer
or chief operating officer, acting singly.
"Bankruptcy Code" means Title 11, United States Code, sections 1
et seq., as the same may be amended or modified from time to time, and
any successor thereto or replacement therefor which may be hereafter
enacted.
"Booth" means Booth, Inc., a Texas corporation.
-4-<PAGE>
"Borrowers" means, collectively, Group, Delfield, Scotsman Drink,
Whitlenge, Frimont and Castel MAC.
"Borrowing Date" means a date on which an Advance is made or a
Facility Letter of Credit is issued hereunder.
"Borrowing Notice" is defined in Section 2.8.
"Business Day" means (a) with respect to any borrowing, payment
or rate selection of Eurocurrency Advances, a day (other than a
Saturday or Sunday) on which banks generally are open in Chicago, New
York, London and for currencies other than Eurodollars, the principal
financial center of the country in whose currency the Advance is to be
funded, for the conduct of substantially all of their commercial
lending activities and on which dealings in the relevant Permitted
Currency are carried on in the London interbank market, and (b) for
all other purposes, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago for the conduct of substantially
all of their commercial lending activities.
"Capital Expenditures" means, without duplication, any
expenditures for any purchase or other acquisition for value of any
asset that is classified on a consolidated balance sheet of Industries
and its Subsidiaries prepared in accordance with Agreement Accounting
Principles as a fixed or capital asset, excluding (a) the cost of
assets acquired under Capitalized Lease Obligations, (b) expenditures
of insurance proceeds to rebuild or replace any asset after a casualty
loss, (c) leasehold improvement expenditures for which Industries or a
Subsidiary is reimbursed promptly by the lessor and (d) assets
acquired pursuant to a merger permitted under Section 6.12 or a
Purchase or Investment permitted under Section 6.15.
"Capitalized Lease" of a Person means any lease of Property by
such Person as lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with Agreement Accounting
Principles.
"Capitalized Lease Obligations" of a Person means the amount of
the obligations of such Person under Capitalized Leases which would be
shown as a liability on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
"Cash Flow Coverage Ratio" means, with respect to Industries on a
consolidated basis with its Subsidiaries, at any time, the ratio of
(a) the sum of (i) Net Income for such period (excluding extraordinary
gains but including extraordinary losses) plus (ii) the aggregate
amounts deducted in determining Net Income for such period in respect
of (A) non-cash interest charges, (B) the deferred portion of the
provision for income taxes, (C) amortization of debt discount and
intangibles, (D) depreciation, depletion, amortization and other
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similar non-cash charges, (E) non-cash charges mandated by the
Financial Accounting Standards Board and (F) unamortized fees and
redemption premiums paid in connection with the redemption or
repayment of Indebtedness to (b) the Consolidated Funded Debt of such
Persons.
"Castel MAC" means Castel MAC S.p.A., a societa per azioni
incorporated with limited liability in the Republic of Italy.
"Change" is defined in Section 3.2.
"Change in Control" means (a) the acquisition by any Person, or
two or more Persons acting in concert, including without limitation
any acquisition effected by means of any transaction contemplated by
Section 6.12, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 30% or more of the outstanding shares of
voting stock of Industries, but excluding any such acquisition
effected in connection with the transactions contemplated by the
Purchase Agreement or the Merger Agreement, or (b) during any period
of 25 consecutive calendar months, commencing on the date of this
Agreement, the ceasing of those individuals (the "Continuing
Directors") who (i) were directors of Industries on the first day of
each such period or (ii) subsequently became directors of Industries
and whose initial election or initial nomination for election
subsequent to that date was approved by a majority of the Continuing
Directors then on the board of directors of Industries, to constitute
a majority of the board of directors of Industries.
"Closing Transactions" is defined in Section 4.1(d).
"Code" means the Internal Revenue Code of 1986, as the same may
be amended or modified from time to time and any successor thereto or
replacement therefor which may be hereafter enacted.
"Commitment Reduction Amount" is defined in Section 2.7.
"Commitment" means, for each Lender, the obligation of such
Lender to make Loans not exceeding the amount set forth opposite its
signature below, as such amount may be modified from time to time
pursuant to the terms hereof.
"Commitment Sublimit" means, (a) with respect to Scotsman Drink,
Whitlenge, Frimont and Castel MAC, the limitation of $35,000,000 on
the principal amount of Loans that may be outstanding in respect of
such Borrowers in the aggregate at any time, and (b) with respect to
Frimont and Castel MAC, the further limitation of $15,000,000 on the
principal amount of Loans that may be outstanding in respect of such
Borrowers in the aggregate at any time.
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"Condemnation" is defined in Section 7.8.
"Consolidated" or "consolidated", when used in connection with
any calculation, means a calculation to be determined on a
consolidated basis for Industries and its Subsidiaries in accordance
with Agreement Accounting Principles.
"Consolidated Net Worth" means at any date the consolidated
stockholders' equity of Industries and its Subsidiaries determined in
accordance with Agreement Accounting Principles, without giving effect
to any changes in the accumulated translation adjustments account of
any such Persons after the last day of the fiscal year of such Person
most recently ended on or prior to the date hereof.
"Consolidated Person" means, for the taxable year of reference,
each Person which is a member of the affiliated group of Industries if
Consolidated returns are or shall be filed for such affiliated group
for federal income tax purposes or any combined or unitary group of
which Industries or any Subsidiary is a member for state income tax
purposes.
"Contingent Obligation" of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the
obligation or liability of any other Person, or agrees to maintain the
net worth or working capital or other financial condition of any other
Person, or otherwise assures any creditor of such other Person against
loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a Letter of Credit,
but excluding any endorsements of other items for collection or
deposit in the ordinary course of business.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not
incorporated) under common control which, together with Industries or
any of its Subsidiaries, are treated as a single employer under
Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.11.
"Corporate Base Rate" means a rate per annum equal to the
corporate base rate of interest announced by First Chicago from time
to time, changing when and as said corporate base rate changes. The
Corporate Base Rate is a reference rate and does not necessarily
represent the lowest or best rate of interest actually charged to any
customer. First Chicago may make commercial loans or other loans at
rates of interest at, above or below the Corporate Base Rate.
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"Current Dollar Equivalent" shall mean at any date, (a) with
respect to Advances denominated in Dollars, the principal amount
outstanding as of such date and (b) with respect to Advances
denominated in an Alternative Currency, the amount of Dollars into
which the principal amount of such Advance outstanding as of such date
may be converted at the spot rate at which Dollars are offered to the
Agent in London for the Alternative Currency in which such Advance is
denominated in an amount comparable to the amount of such Advance at
approximately 11:00 A.M. (London time) on the second Business Day
prior to such date. Determination of the Current Dollar Equivalent of
Facility Letter of Credit Obligations shall be made using the
procedures set forth above, but based upon the outstanding amount
thereof in the Permitted Currency in which such obligations have
accrued.
"Default" means an event described in Article VII.
"Delfield" means The Delfield Company, a Delaware corporation.
"DFC" means DFC Holding Corporation, a Delaware corporation.
"Dollars" shall mean lawful money of the United States of
America.
"Dollar Amount" shall mean (a) with respect to each Advance to be
made, continued or converted in Dollars, the principal amount thereof
and (b) with respect to each Advance to be made, continued or
converted in an Alternative Currency, the amount of Dollars into which
the principal amount of such Advance may be converted at the spot rate
at which Dollars are offered to the Agent in London for the
Alternative Currency in which such Advance is to be denominated in an
amount comparable to the amount of such Advance at approximately 11:00
A.M. (London time) two (2) Business Days before such Advance is to be
made, continued or converted, as the case may be.
"Domestic Subsidiary" means a Subsidiary organized under the laws
of the United States or any political subdivision or any agency,
department or instrumentality thereof.
"Domestic Transfer" means any (a) payment of a dividend by any
Foreign Subsidiary to Industries or any Domestic Subsidiary, (b) sale,
lease or other disposition of Property in which (i) assets are
transferred or services are rendered by any Foreign Subsidiary to
Industries or any Domestic Subsidiary for less then fair market value
or (ii) assets are transferred or services are rendered by Industries
or any Domestic Subsidiary to any Foreign Subsidiary for greater than
fair market value, (c) any repayment by any Foreign Subsidiary to
Industries or any Domestic Subsidiary of any Investment thereby or (d)
any sale of assets or stock of any Foreign Subsidiary by Industries or
any Domestic Subsidiary. For the purposes of clause (b) of this
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definition: (x) the fair market value of each sale, lease or other
disposition of manufactured products shall be equal to the sum of (i)
the variable costs of manufacturing such product (determined in each
case in accordance with the methods used as of the date hereof by the
Foreign Subsidiaries to determine such variable costs) plus (ii) 10%
of such variable costs; and (y) any royalty charged by any Foreign
Subsidiary to Industries or a Domestic Subsidiary for the use of a
trademark, trade name or service mark shall be deemed to have been
charged at fair market value.
"Double Taxation Treaty" means a treaty by virtue of which a
Lender is entitled to receive payments of interest under this
Agreement without any deduction or withholding in respect of United
Kingdom Taxes.
"EBITA" means, for any applicable computation period, the Net
Income of Industries and its Subsidiaries on a consolidated basis from
continuing operations, plus the aggregate amounts deducted in
determining Net Income for such period in respect of (a) income, net
worth and franchise taxes, (b) interest expenses, (c) amortization and
(d) write-offs of goodwill.
"Entitled Person" is defined in Section 2.12(b).
"Environmental Laws" is defined in Section 5.22.
"Environmental Permits" is defined in Section 5.22.
"ERISA" means the Employee Retirement Income Security Act of
1974, as the same may be amended or modified from time to time, and
any successor thereto or replacement therefor which may be hereafter
enacted.
"Eurocurrency Advance" means an Advance in a Permitted Currency
which bears interest at the Eurocurrency Rate, including without
limitation, Eurodollar Advances.
"Eurocurrency Base Rate" means, for any specified Interest
Period, the rate of interest per annum determined by the Agent to be
the rate at which deposits in the applicable Permitted Currency are
offered by First Chicago to first-class banks in the London interbank
market at approximately 11 a.m. (London time) two Business Days prior
to the first day of such Interest Period for delivery on such day, in
the approximate amount of First Chicago's pro-rata share of such
Eurocurrency Advance and having a maturity equal to such Interest
Period.
"Eurocurrency Loan" means a Loan denominated in a Permitted
Currency which bears interest at the Eurocurrency Rate, including
without limitation, Eurodollar Loans.
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"Eurocurrency Rate" means, with respect to a Eurocurrency Advance
for the relevant Interest Period, the sum of (a) the quotient of (i)
the Eurocurrency Base Rate applicable to such Eurocurrency Advance and
Interest Period, divided by (ii) either (A) for any Eurodollar
Advance, a number equal to one minus the Reserve Requirement
(expressed as a decimal) applicable to such Eurocurrency Advance and
Interest Period or (B) for any other Eurocurrency Advance, the number
one, plus (b) the Applicable Eurocurrency Margin. The Eurocurrency
Rate shall be rounded to the next higher multiple of 1/16 of 1% if the
rate is not such a multiple.
"Eurocurrency Sublimit" means the sum of the aggregate Commitment
Sublimits for Scotsman Drink, Whitlenge, Frimont and Castel MAC, as
such Commitment Sublimits may be adjusted from time to time hereunder.
"Eurodollar Advance" means a Eurocurrency Advance denominated in
Dollars.
"Eurodollar Loan" means a loan denominated in Dollars which bears
interest at the Eurocurrency Rate.
"Excess Interest" is defined in Section 2.10(b).
"Excluded Taxes" is defined in Section 3.1(a).
"Facility Letter of Credit" means any letter of credit
denominated in Dollars or any Alternative Currency and issued at the
request of any Borrower and for the account of such Borrower in
accordance with Section 2.22.1, including without limitation the IRB
Facility Letter of Credit.
"Facility Letter of Credit Obligations" means, as at the time of
determination thereof, all liabilities, whether actual or contingent,
of the Borrowers with respect to Facility Letters of Credit, including
the sum of (a) Facility Letter of Credit Reimbursement Obligations and
(b) the aggregate undrawn face amount of outstanding Facility Letters
of Credit.
"Facility Letter of Credit Reimbursement Obligations" means, at
any time, the aggregate (without duplication) of the obligations of
the Borrowers to the Lenders, the Issuers and the Agent under all
Reimbursement Agreements and otherwise in respect of all unreimbursed
payments or disbursements made by the Lenders, the Issuers and/or the
Agent under or in respect of draws made under Facility Letters of
Credit.
"Facility Letter of Credit Sublimit" means $20,000,000.
"Facility Termination Date" means April 29, 2000.
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"Federal Funds Effective Rate" means, for any day, an interest
rate per annum equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published for such
day (or, if such day is not a Business Day, for the immediately
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 at approximately 10 a.m. (Chicago time)
on such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent in
its sole discretion.
"Financial Statements" is defined in Section 5.5.
"First Chicago" means The First National Bank of Chicago in its
individual capacity and its successors.
"Fiscal Quarter" means one of the four 13 week (or, with respect
to the fourth such period in each Fiscal Year which has 53 weeks, 14
week) accounting periods in each Fiscal Year.
"Fiscal Year" means the accounting period ending on the Sunday
nearest to December 31 of each year.
"Floating Rate" means, for any day, a rate of interest per annum
equal to the higher of (a) the Corporate Base Rate for such day, and
(b) the sum of the Federal Funds Effective Rate for such day plus 1/2%
per annum.
"Floating Rate Advance" means an Advance in Dollars which bears
interest at the Floating Rate.
"Foreign Subsidiary" means a Subsidiary which is not a Domestic
Subsidiary.
"Foreign Transfer Cap" means (a) with respect to all Restricted
Foreign Transfers and to Advances to Borrowers which are Foreign
Subsidiaries, $55,000,000, less (i) the aggregate outstanding
principal amount of any Advances to Borrowers which are Foreign
Subsidiaries, less (ii) the aggregate amount of all Restricted Foreign
Transfers made on or after the date hereof (including without
limitation any Restricted Foreign Transfers made in connection with
the Closing Transactions), plus (iii) the aggregate amount of the net
proceeds received by Industries and its Domestic Subsidiaries as a
result of the Domestic Transfers made on or after the date hereof and
(b) with respect to Restricted Foreign Transfers described in clauses
(a), (c) and (d) of the definition thereof and to Advances to
Borrowers which are Foreign Subsidiaries, $35,000,000, less (i) the
aggregate outstanding principal amount of any Advances to Borrowers
which are Foreign Subsidiaries, less (ii) the aggregate amount of all
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Restricted Foreign Transfers described in clauses (a), (c) and (d) of
the definition thereof made on or after the date hereof (including
without limitation any such Restricted Foreign Transfer made in
connection with the Closing Transactions), plus (iii) the aggregate
amount of the net proceeds received by Industries and its Domestic
Subsidiaries as a result of the Domestic Transfers described in
clauses (a), (c) and (d) of the definition thereof made on or after
the date hereof.
"Frimont" means Frimont S.p.A., a societa per azioni incorporated
with limited liability in the Republic of Italy.
"Funded Debt" of a Person means the Indebtedness of such Person
(without double counting) other than (a) Rate Hedging Obligations, (b)
repurchase obligations or liabilities of such Person with respect to
Accounts or notes receivable sold by such Person and (c) all
Indemnified Debt.
"Governmental Agency" means any government (foreign or domestic)
or any state or other political subdivision thereof or any
governmental body, agency, authority, department or commission
(including without limitation any taxing authority or political
subdivision) or any instrumentality or officer thereof (including
without limitation any court or tribunal) exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government and any corporation, partnership or other
entity directly or indirectly owned or controlled by or subject to the
control of any of the foregoing.
"Group" means Scotsman Group, Inc., a Delaware corporation.
"Guaranties" means, collectively, (a) those certain Guaranties in
the form of Exhibit A-1 hereto, duly executed and delivered by
Industries and each Guarantor which is a Domestic Subsidiary and (b)
those certain Guaranties in the form of Exhibit A-2 hereto, duly
executed and delivered by each Guarantor which is a Foreign
Subsidiary, in each case in favor of the Agent, on behalf of the
Lenders, as the same may be amended, supplemented or otherwise
modified from time to time.
"Guarantors" means, collectively, Industries, Group, Delfield,
DFC, Scotsman Drink, Whitlenge, Frimont, Castel MAC, Booth and the
other Persons that execute Guaranties in accordance with Section 6.30
hereof.
"Hazardous Materials" is defined in Section 5.22.
"HI Indemnity" means that certain Indemnity Agreement dated April
14, 1989 between Group and Household International, Inc.
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"Indebtedness" of a Person means such Person's (a) obligations
for borrowed money, (b) obligations representing the deferred purchase
price of Property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms
customary in the trade), (c) obligations, whether or not assumed,
secured by Liens (other than Liens described under Section 6.16(a)-
(d)) or payable out of the proceeds or production from Property now or
hereafter owned or acquired by such Person, (d) obligations which are
evidenced by notes, acceptances, or other instruments, (e) Capitalized
Lease Obligations, (f) Rate Hedging Obligations, (g) Contingent
Obligations, (h) obligations for which such Person is obligated
pursuant to or in respect of a Letter of Credit and (i) repurchase
obligations or liabilities of such Person with respect to Accounts or
notes receivable sold by such Person, in each case other than
Indemnified Debt.
"Indemnified Debt" means all Indebtedness as to which Industries
and its Subsidiaries are indemnified against pursuant to the HI
Indemnity and as to which any claims for indemnification thereunder
are actually paid to such Persons within one year following the making
of any claim therefor.
"Industries" means Scotsman Industries, Inc., a Delaware
corporation.
"Intangible Assets" of a Person means the amount of such Person's
unamortized debt discount and expense (other than deferred expenses
related to the transactions contemplated by this Agreement),
unamortized deferred charges, goodwill, patents, trademarks, service
marks, trade names, copyrights, organization or developmental expenses
and other intangible items.
"Intercreditor Agreement" means that certain Intercreditor
Agreement dated as of April 29, 1994 among the holders of the Senior
Notes, the Lenders and the Agent, as amended, supplemented or modified
from time to time.
"Interest Expense Coverage Ratio" means for any applicable
computation period of Industries, the ratio of EBITA to the interest
expenses deducted in determining Net Income of Industries and its
Subsidiaries on a consolidated basis for such period, all as
determined in accordance with Agreement Accounting Principles.
"Interest Period" means, with respect to a Eurocurrency Advance,
a period of one, two, three or six months commencing on a Business Day
selected by Group pursuant to this Agreement. Such Interest Period
shall end on (but exclude) the day which corresponds numerically to
such date one, two, three or six months thereafter; provided, however,
that if there is no such numerically corresponding day in such next,
second, third or sixth succeeding month, such Interest Period shall
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end on the last Business Day of such next, second, third or sixth
succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day; provided, however, that if said next
succeeding Business Day falls in a new calendar month, such Interest
Period shall end on the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made
in the ordinary course of business), extension of credit (other than
accounts receivable arising in the ordinary course of business on
terms customary in the trade), deposit account or contribution of
capital by such Person to any other Person or any investment in, or
purchase or other acquisition of, the stock, partnership interests,
notes, debentures or other securities of any other Person made by such
Person.
"IRB Facility Letter of Credit" means that certain $9,597,645.82
Letter of Credit issued by The Bank of Nova Scotia, Atlanta Agency, as
of the date hereof in connection with the $9,250,000 Industrial
Revenue Refunding Bonds Series 1988 (King-Seeley Thermos Co. Project),
as amended, supplemented or modified from time to time.
"IRB Facility Letter of Credit Documents" means the IRB Facility
Letter of Credit, that certain Reimbursement Agreement dated as of the
date hereof between The Bank of Nova Scotia, Atlanta Agency, and
Group, as amended, supplemented or modified from time to time, and the
other documents and agreements executed in connection therewith.
"Issuer" means First Chicago, with respect to each Facility
Letter of Credit other than the IRB Facility Letter of Credit, and The
Bank of Nova Scotia, Atlanta Agency, with respect to the IRB Facility
Letter of Credit.
"Judgment Currency" is defined in Section 2.12(b).
"Lenders" means the lending institutions listed on the signature
pages of this Agreement and their respective successors and permitted
assigns.
"Lending Installation" means, with respect to a Lender or the
Agent, any office, branch, subsidiary or affiliate of such Lender or
the Agent.
"Letter of Credit" of a Person means a letter of credit or
similar instrument which is issued upon the application of such Person
or upon which such Person is an account party or for which such Person
is in any way liable.
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"Leverage Ratio" means, with respect to Industries on a
consolidated basis with its Subsidiaries, at any time, the ratio of
(a) the Consolidated Funded Debt of such Persons to (b) Consolidated
Net Worth.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, collateral assignment, encumbrance or other security
agreement or similar arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion of
any Advance and "Loans" means with respect to the Lenders, the
aggregate of all Advances.
"Loan Documents" means this Agreement, the Notes, the Guaranties,
the Pledge Agreement, the Reimbursement Agreements, the IRB Facility
Letter of Credit Documents and the other documents and agreements
contemplated hereby and executed by the Borrowers and the Guarantors
in favor of the Agent or any Lender or otherwise in connection with
any Facility Letter of Credit.
"Loan Party" means each of Industries, Group, DFC, Delfield,
Scotsman Drink, Whitlenge Acquisition, Whitlenge, Whitlenge N.V.,
Frimont, Castel MAC, Booth and each other Person that executes a
Guaranty pursuant to Section 6.29 hereof.
"Margin Stock" has the meaning assigned to that term under
Regulation U.
"Material Adverse Effect" means a material adverse effect on (a)
the business, Property, condition (financial or other), performance or
results of operations of Industries and its Subsidiaries taken as a
whole, (b) the ability of Group, Delfield or the Loan Parties, taken
as a whole, to repay when due its or their obligations under the Loan
Documents, or (c) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Agent or the Lenders
thereunder.
"Maximum Rate" is defined in Section 2.10(b).
"Merger" means the merger of Acquisition Co. with and into DFC
pursuant to the Merger Documents.
"Merger Agreement" means that certain Agreement and Plan of
Merger dated as of January 11, 1994 among Industries, Acquisition Co.,
DFC, Delfield and the other parties named therein, as the same may be
amended or modified after the date hereof with the consent of the
Required Lenders.
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"Merger Documents" means the Merger Agreement together with the
certificate of ownership and merger filed with the Secretary of State
of Delaware to effectuate such merger and the other documents,
certificates and agreements delivered in connection therewith.
"Multiemployer Plan" means a Plan which is a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA.
"Net Available Proceeds" means, with respect to any Asset
Disposition, the sum of cash or readily marketable cash equivalents
received (including by way of a cash generating sale or discounting of
a note or receivable, but excluding any other consideration received
in the form of assumption by the acquiring Person of debt or other
obligations relating to the properties or assets so disposed of or
received in any other non-cash form) therefrom, whether at the time of
such disposition or subsequent thereto, net of all legal, title and
recording tax expenses, commissions and other fees and all costs and
expenses incurred and all federal, state, local and other taxes
required to be accrued as a liability as a consequence of such
transactions and of all payments made by Industries or any of its
Subsidiaries on any Indebtedness which is secured by such assets
pursuant to a permitted Lien upon or with respect to such assets or
which must by the terms of such Lien, or in order to obtain a
necessary consent to such Asset Disposition or by applicable law be
repaid out of the proceeds from such Asset Disposition.
"Net Income" means, for any computation period, with respect to
Industries on a consolidated basis with its Subsidiaries (other than
any Subsidiary (a) which is either a Guarantor restricted from making
payments under its Guaranty (including each Guarantor which is a
Foreign Subsidiary) or is not a Guarantor and (b) which is subject to
a restriction on declaring or paying dividends or otherwise advancing
funds to its parent whether by contract or otherwise which effectively
restricts any such action during such period (a "Restricted
Subsidiary")), cumulative net income earned during such period in
accordance with Agreement Accounting Principles, but including any
dividends actually paid in such period by any Restricted Subsidiary to
Industries or to any Subsidiary other than a Restricted Subsidiary.
"Note" means a revolving credit note in substantially the form of
Exhibit B hereto, with appropriate insertions, duly executed and
delivered to the Agent by each Borrower and payable to the order of a
Lender in the amount of its Commitment, including any amendment,
modification, renewal or replacement of such promissory note and
"Notes" means all such notes collectively.
"Notice of Assignment" is defined in Section 12.3.2.
"Notice of Issuance" is defined in Section 2.22.4.
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"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Notes, the Facility Letter of Credit
Obligations and all other liabilities (if any), whether actual or
contingent, of the Borrowers with respect to Facility Letters of
Credit, all accrued and unpaid fees and all expenses, reimbursements,
indemnities and other obligations of the Borrowers to the Lenders or
to any Lender, the Agent or any indemnified party hereunder arising
under any of the Loan Documents and any Rate Hedging Obligations or
foreign exchange contracts of the Borrowers owing to the Agent or any
Lender.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last Business Day of each month.
"PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Currencies" shall mean (a) Dollars with respect to
Floating Rate Advances and (b) Dollars or any Alternative Currency
with respect to Eurocurrency Advances.
"Person" means any natural person, corporation, firm, joint
venture, partnership, association, enterprise, trust or other entity
or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA, as to which Industries or any member of the
Controlled Group may have any liability.
"Pledge Agreement" means that certain Note Pledge Agreement dated
as of the date hereof between Group and the Agent, as amended,
supplemented or modified from time to time.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other
assets owned, leased or operated by such Person.
"Pro Forma" is defined in Section 5.5.
"pro-rata" means, when used with respect to a Lender, and any
described aggregate or total amount, an amount equal to such Lender's
pro-rata share or portion based on its percentage of the Aggregate
Commitment or if the Aggregate Commitment has been terminated, its
percentage of the aggregate principal amount of outstanding Advances
or if no Advances are outstanding, of any outstanding Letter of Credit
Obligations.
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"Purchase" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by
which Industries or any of its Subsidiaries (a) acquires any going
business or all or substantially all of the assets of any Person or
division thereof, whether through purchase of assets, merger or
otherwise, or (b) directly or indirectly acquires (in one transaction
or as the most recent transaction in a series of transactions) at
least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of
the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding partnership interests of a partnership.
"Purchase Agreement" means that certain Share Acquisition
Agreement dated as of January 11, 1994 among Industries, Whitlenge
Acquisition, Whitlenge and the sellers named therein, as the same may
be amended or modified after the date hereof with the consent of the
Required Lenders.
"Purchasers" is defined in Section 12.3.1.
"Qualifying Lender" means a Lender which is:
(a) (i) an authorized institution under the UK Banking Act
1987 or a person specified in Schedule 2 of the UK Banking Act 1987 or
a European authorized institution under the Banking Coordination
(Second Council Directive) Regulations 1992 which is entitled to
accept deposits in the United Kingdom;
(ii) recognized by the United Kingdom Inland Revenue as
carrying on a bona fide banking business in the United Kingdom for the
purposes of Section 349(3) of the Income and Corporation Taxes Act
1988;
(iii) properly takes any interest received by it in the
United Kingdom under this Agreement into account as a trading receipt
of such banking business; and
(iv) makes and books its Loans to UK Borrowers through a
Lending Installation located in the United Kingdom; or
(b) a Lender to which a Double Taxation Treaty applies;
and for the purposes of this definition, if a Lender is a Qualifying
Lender in respect of one or more of its Lending Installations, but not
in respect of the Lending Installation which makes and books the Loan
in question to a UK Borrower, then such Lender shall not be deemed to
be a Qualifying Lender with respect to such Loan; provided, that if
any of the acts or regulations referenced in clause (a) is amended or
repealed, this definition shall be amended in such manner as the Agent
and the Lenders, after consultation with Group, shall determine to be
-18-<PAGE>
necessary in order to define the persons of the relevant equivalent
category.
"Rate Hedging Obligations" of a Person means any and all net
obligations of such Person, whether absolute or contingent and
howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (a) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts and
warrants, and (b) any and all cancellations, buybacks, reversals,
terminations or assignments of any of the foregoing, determined with
respect to interest rate agreements, by multiplying two percent (2%)
of the notional amount thereof times the number of years remaining to
maturity.
"Regulation D" means Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor thereto or other regulation or official interpretation of
said Board of Governors relating to reserve requirements applicable to
depositary institutions.
"Regulation G" means Regulation G of the Board of Governors of
the Federal Reserve System as from time to time in effect and shall
include any successor or other regulation or official interpretation
of said Board of Governors relating to the extension of credit by
Persons other than banks, brokers and dealers for the purpose of
purchasing or carrying margin stocks applicable to such Persons.
"Regulation U" means Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor or other regulation or official interpretation of said Board
of Governors relating to the extension of credit by banks for the
purpose of purchasing or carrying margin stocks applicable to such
Persons.
"Regulation X" means Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and shall
include any successor or other regulation or official interpretation
of said Board of Governors relating to the extension of credit by the
specified lenders for the purpose of purchasing or carrying margin
stocks applicable to such Persons.
"Reimbursement Agreement" means a reimbursement agreement,
substantially in such form as the Issuer may employ in the ordinary
-19-<PAGE>
course of its business, with such modifications thereto as may be
agreed upon by the Issuer and Group; provided, however, that in the
event of any conflict between the terms of any Reimbursement Agreement
and this Agreement, the terms of this Agreement shall control.
"Release" is defined in the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. 39601 et seq.
"Rentals" of a Person means the aggregate fixed amounts payable
by such Person under any operating lease of Property having an
original term (including any required renewals or any renewals at the
option of the lessor or lessee) of one year or more.
"Reportable Event" means a reportable event as defined in Section
4043 of ERISA and the regulations issued under such section, with
respect to a Plan, excluding, however, such events as to which the
PBGC has by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such
event; provided, that a failure to meet the minimum funding standard
of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA
or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment
has been terminated, Lenders in the aggregate holding at least 66-2/3%
of the Current Dollar Equivalent of the aggregate unpaid principal
amount of the outstanding Loans. For the purposes of this definition,
in addition to Loans that are actually outstanding, each Lender shall
be deemed to have outstanding Loans in an amount equal to its pro-rata
share of any outstanding Facility Letter of Credit Obligations.
"Reserve Requirement" means, with respect to an Interest Period,
the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under
Regulation D on "Eurocurrency Liabilities" with a maturity equal to
that of such Eurodollar Advance for such Interest Period.
"Restricted Foreign Transfer" means any (a) payment of a dividend
by Industries or any of its Domestic Subsidiaries to any Foreign
Subsidiary, (b) sale, lease or other disposition of Property in which
(i) assets are transferred or services are rendered by Industries or
any Domestic Subsidiary to any Foreign Subsidiary for less than fair
market value or (ii) assets are transferred or services are rendered
by any Foreign Subsidiary to Industries or any Domestic Subsidiary for
greater than fair market value, (c) Investment by Industries or any
Domestic Subsidiary in any Foreign Subsidiary or (d) Purchase by
Industries or any of its Domestic Subsidiaries of the assets or stock
of any Person that would constitute a Foreign Subsidiary. For the
-20-<PAGE>
purposes of clause (b) of this definition: (x) the fair market value
of each sale, lease or other disposition of manufactured products
shall be equal to the sum of (i) the variable costs of manufacturing
such product (determined in each case in accordance with the methods
used as of the date hereof by Industries and its Domestic Subsidiaries
to determine such variable costs) plus (ii) 10% of such variable
costs; (y) any royalty charged by Industries or any Domestic
Subsidiary to a Foreign Subsidiary for the use of any trademark, trade
name or service mark shall be deemed to have been charged at fair
market value; and (z) any routine management services rendered in the
ordinary course of business by Industries or any Domestic Subsidiary
to any Foreign Subsidiary shall be deemed to have been rendered at
fair market value.
"Risk-Based Capital Guidelines" is defined in Section 3.2.
"Scotsman Drink" means Scotsman Drink Limited, a private company
limited by shares registered in England.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Senior Notes" means the $20,000,000 11.43% Senior Notes due May
1, 1998 issued pursuant to those certain Note Purchase Agreements
dated as of April 17, 1989 among Industries, Group and the purchasers
named therein, as amended and restated as of the date hereof and as
further amended, supplemented or modified from time to time.
"Single Employer Plan" means a Plan subject to Title IV of ERISA
maintained by Industries or any member of the Controlled Group for
employees of Industries or any member of the Controlled Group, other
than a Multiemployer Plan.
"Solvent" means, when used with respect to a Person, that (a) the
fair saleable value of the assets of such Person is in excess of the
total amount of the present value of its liabilities (including for
purposes of this definition all liabilities (including loss reserves
as determined by Industries), whether or not reflected on a balance
sheet prepared in accordance with Agreement Accounting Principles and
whether direct or indirect, fixed or contingent, secured or unsecured,
disputed or undisputed), (b) such Person is able to pay its debts or
obligations in the ordinary course as they mature and (c) such Person
does not have unreasonably small capital to carry out its business as
conducted and as proposed to be conducted. "Solvency" shall have a
correlative meaning.
"Specified Currency" is defined in Section 2.12(b).
"Specified Place" is defined in Section 2.12(b).
-21-<PAGE>
"Subsidiary" of a Person means (a) any corporation more than 50%
of the outstanding securities having ordinary voting power of which
shall at the time be owned or controlled, directly or indirectly, by
such Person or by one or more of its Subsidiaries or by such Person
and one or more of its Subsidiaries, or (b) any partnership,
association, joint venture or similar business organization more than
50% of the ownership interests having ordinary voting power of which
shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean
a Subsidiary of Industries.
"Substantial Portion" means, with respect to the Property of
Industries and its Subsidiaries, Property which (a) represents more
than 10% of the consolidated assets of Industries and its
Subsidiaries, as would be shown in the consolidated financial
statements of Industries and its Subsidiaries as at the end of the
quarter next preceding the date on which such determination is made,
or (b) is responsible for more than 10% of the consolidated net sales
or of the consolidated Net Income of Industries and its Subsidiaries
for the 12-month period ending as of the end of the Fiscal Quarter
next preceding the date of determination; provided, that for purposes
of Section 6.13, each reference to 10% shall be deemed to be a
reference to 20%.
"Tangible Assets" of a Person means the amount of such Person's
total assets, determined in accordance with Agreement Accounting
Principles, less the amount of such Person's Intangible Assets.
"Taxes" is defined in Section 3.1(a).
"Termination Event" means, with respect to a Plan which is
subject to Title IV of ERISA, (a) a Reportable Event, (b) the
withdrawal of Industries or any other member of the Controlled Group
from such Plan during a plan year in which Industries or any other
member of the Controlled Group was a "substantial employer" as defined
in Section 4001(a)(2) of ERISA or was deemed such under Section
4068(f) of ERISA, (c) the termination of such Plan, the filing of a
notice of intent to terminate such Plan or the treatment of an
amendment of such Plan as a termination under Section 4041 of ERISA,
(d) the institution by the PBGC of proceedings to terminate such Plan,
(e) any event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or appointment of a
trustee to administer, such Plan, (f) the partial or complete
withdrawal by Industries or any other member of the Controlled Group
from a Multiemployer Plan, (g) any event or condition which results in
the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA or (h) any event or condition which
results in the termination of a Multiemployer Plan under Section 4041A
of ERISA or the institution by the PBGC of proceedings to terminate a
Multiemployer Plan under Section 4042 of ERISA.
-22-<PAGE>
"Transaction Documents" means the Loan Documents, the Acquisition
Documents and the Merger Documents.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a
Floating Rate Advance or Eurocurrency Advance.
"UK Borrower" means any Borrower treated, for the purposes of
United Kingdom Taxes and for the purposes of eligibility for benefits
under the relevant Double Tax Treaty between the United Kingdom and
the country of residence of the relevant Lender, as resident in the
United Kingdom.
"Unfunded Liability" means the amount (if any) by which the
present value of all vested and unvested accrued benefits under a
Single Employer Plan exceeds the fair market value of assets allocable
to such benefits, all determined as of the then most recent valuation
date for such Plans using actuarial assumptions used for funding
purposes.
"Unmatured Default" means an event which but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"Whitlenge" means Whitlenge Drink Equipment Limited, a private
company limited by shares registered in England.
"Whitlenge Acquisition" means Whitlenge Acquisition Limited, a
private company limited by shares registered in England.
"Whitlenge N.V." means Whitlenge Drink Equipment N.V., a
corporation formed under the laws of Belgium.
"Wholly-Owned Subsidiary" of a Person means (a) any Subsidiary
all of the outstanding voting securities of which shall at the time be
owned or controlled, directly or indirectly, by such Person or one or
more Wholly-Owned Subsidiaries of such Person, or by such Person and
one or more Wholly-Owned Subsidiaries of such Person, or (b) any
partnership, association, joint venture or similar business
organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms. Each accounting term
referenced herein shall be determined in accordance with Agreement
Accounting Principles as in effect as of the date hereof unless
otherwise specified.
-23-<PAGE>
ARTICLE II
THE CREDITS
-----------
2.1. Advances. (a) From and including the date hereof to but not
including the Facility Termination Date, each Lender severally (and
not jointly) agrees, on the terms and conditions set forth in this
Agreement, to make Advances in any one or more of the Permitted
Currencies to the Borrowers from time to time in amounts, based on the
Dollar Amount of any Advances outstanding in Dollars and the Dollar
Amount of any Advances outstanding in Alternative Currencies, not to
exceed in the aggregate at any one time outstanding the amount of (i)
its Commitment existing at such time minus (ii) its pro-rata share of
Facility Letter of Credit Obligations then outstanding. Subject to
the terms of this Agreement, the Borrowers may borrow, repay and
reborrow Advances at any time prior to the Facility Termination Date.
For purposes of this Agreement, Advances in Alternative Currencies
shall be determined, denominated and redenominated as set forth in
Section 2.21 hereof.
(b) Group hereby agrees that if at any time, after
determining the Current Dollar Equivalent thereof, (i) the aggregate
balance of the Loans and the Facility Letter of Credit Obligations
exceeds the Aggregate Commitment or (ii) the aggregate balance of the
Loans made to any Borrower and the Facility Letter of Credit
Obligations owing by such Borrower exceeds the applicable Commitment
Sublimit, then in any such case, Group shall or shall cause the other
Borrowers to repay immediately the outstanding Loans in such amount as
may be necessary to eliminate any such excess; provided, that if (x)
an excess remains after repayment of all outstanding Loans or (y) the
aggregate Facility Letter of Credit Obligations outstanding exceeds
the Facility Letter of Credit Sublimit, then Group shall or shall
cause Delfield to cash collateralize the Facility Letter of Credit
Obligations in such amount as may be necessary to eliminate such
excess. Such cash collateralization shall be provided to the Agent,
for the benefit of the Lenders, pursuant to documentation in form and
substance acceptable to the Agent.
(c) The Borrowers' obligation to pay the principal of, and
interest on, the Loans shall be evidenced by the Notes. Although the
Notes shall be dated the date of the initial Advances, interest in
respect thereof shall be payable only for the periods during which the
Loans evidenced thereby are outstanding and, although the stated
amount of each Note shall be equal to the applicable Lender's
Commitment, each Note shall be enforceable, with respect to the
Borrowers' obligation to pay the principal amount thereof, only to the
extent of the unpaid principal amount of the Loan at the time
evidenced thereby.
-24-<PAGE>
(d) Each Advance included in the Loan shall mature, and the
principal amount thereof and the unpaid accrued interest thereon shall
be due and payable, on the Facility Termination Date.
2.2. Ratable Loans. Each Advance hereunder shall consist of
Loans made from the several Lenders ratably in proportion to the ratio
that their respective Commitments bear to the Aggregate Commitment.
Any reduction in the Aggregate Commitment shall ratably reduce the
Commitment of each Lender.
2.3. Types of Advances. The Advances may be Floating Rate
Advances or Eurocurrency Advances, or a combination thereof, selected
by the applicable Borrower in accordance with Sections 2.8 and 2.9;
provided, that (a) at the time of the making or continuation of any
Eurocurrency Advance or the conversion of any Floating Rate Advance to
a Eurocurrency Advance, the Current Dollar Equivalent of the aggregate
Eurocurrency Advances (after giving effect to such making, conversion
or continuation) shall not exceed the Eurocurrency Sublimit and (b)
Eurocurrency Advances denominated in an Alternative Currency may be
outstanding in not more than six Alternative Currencies at any one
time.
2.4. Commitment Fee; Reductions in Aggregate Commitment. (a)
Group shall or shall cause the other Borrowers to pay to the Agent for
the account of each Lender a commitment fee of one quarter of one
percent (.25%) per annum on the daily unused portion of such Lender's
Commitment (based on the Current Dollar Equivalent of (i) the
principal amount of the aggregate Loans and (ii) the aggregate amount
of outstanding Facility Letter of Credit Obligations) from the date
hereof to and excluding the Facility Termination Date, payable on each
Payment Date hereafter and on the Facility Termination Date. All
accrued commitment fees shall be payable on the effective date of any
termination of the Agreement made in accordance with the terms hereof
of the obligations of the Lenders to make Loans hereunder.
(b) Group may permanently reduce the Aggregate Commitment
in whole, or in part ratably among the Lenders in a minimum aggregate
amount of $2,000,000 or any integral multiple of $100,000 in excess
thereof, upon at least five (5) Business Days' written notice to the
Agent, which notice shall specify the amount of any such reduction;
provided, however, that the amount of the Aggregate Commitment may not
be reduced below the sum of the Current Dollar Equivalent of (i) the
aggregate outstanding Advances plus (ii) the outstanding Facility
Letter of Credit Obligations. Such reductions shall be in addition to
reductions occurring pursuant to Section 2.4(c) or Section 2.7.
(c) On each date specified below, the Aggregate Commitment
shall be permanently reduced, ratably among the Lenders, by the amount
specified for such date below:
-25-<PAGE>
<TABLE>
<CAPTION>
Date Reduction Amount
--------------- ----------------
<S> <C>
April 29, 1995 $ 7,000,000
April 29, 1996 7,000,000
April 29, 1997 12,000,000
April 29, 1998 5,000,000
April 29, 1999 5,000,000
April 29, 2000 54,000,000 or such other
amount as shall then be
outstanding
</TABLE>
Concurrently with each such reduction, Group shall or shall cause the
other Borrowers to make such payments and provide such cash
collateralization as may be required by Section 2.1(b).
2.5. Minimum Amount of Each Advance. Each Eurocurrency Advance
shall be made in the minimum amount having a Dollar Amount of not less
than $1,500,000 (and, if in excess thereof, in multiples of
$1,000,000), and each Floating Rate Advance shall be in the minimum
amount of $500,000 (and in multiples of $100,000 if in excess
thereof); provided, however, that (a) any Floating Rate Advance may be
in the amount of the unused Aggregate Commitment, (b) in no event
shall more than seven (7) Eurocurrency Advances be permitted to be
outstanding at any time and (c) the Agent and Group may make
immaterial mutually convenient adjustments to the thresholds and
multiples set forth above in respect of Eurocurrency Advances
denominated in Alternative Currencies.
2.6. Optional Principal Payments. The Borrowers may from time to
time pay, without penalty or premium, all outstanding Floating Rate
Advances, or, in a minimum aggregate amount of $250,000 or any
integral multiple of $100,000 in excess thereof, any portion of the
outstanding Floating Rate Advances upon two Business Days' prior
notice to the Agent. A Eurocurrency Advance may not be paid prior to
the last day of the applicable Interest Period.
2.7. Mandatory Commitment Reductions. Concurrent with the
receipt thereof by Industries or any Subsidiary, the Aggregate
Commitment shall be permanently reduced by an amount equal to 100% of
the aggregate Net Available Proceeds realized upon all Asset
Dispositions which, on a cumulative basis during the period beginning
on the date hereof and ending on the Facility Termination Date, exceed
a Substantial Portion (determined as of the date of each Asset
Disposition), other than an Asset Disposition by Industries or by
Group which is permitted under Section 6.12 (the "Commitment Reduction
Amount"); provided, that so long as the Senior Notes remain
outstanding and if required in connection with the Note Purchase
-26-<PAGE>
Agreement relating thereto, a ratable portion (determined according to
the then aggregate outstanding principal amount of the Senior Notes
and the then outstanding amount of the Aggregate Commitment) of such
Net Available Proceeds shall be applied by the Borrowers to the
prepayment of the Senior Notes (and the payment of any prepayment
premium that may be due in connection therewith) and the Aggregate
Commitment shall only be reduced by an amount equal to the remaining
amount of such Net Available Proceeds. Upon each reduction in the
Aggregate Commitment pursuant to this Section 2.7, Group shall or
shall cause the other Borrowers to prepay the Loans in the amount
required under Section 2.1(b)(i); provided, that if a Default or
Unmatured Default has occurred and is continuing or if any of the
representations and warranties contained in Article V is not true and
correct in all material respects as of the consummation of any Asset
Disposition requiring any such reduction, then Group shall or shall
cause the other Borrowers to prepay the Loans, in an amount equal to
the Commitment Reduction Amount (as such amount may be reduced in
accordance with the proviso to the immediately preceding sentence),
immediately upon the receipt of the proceeds of the Asset Disposition
which triggers the reduction in the Aggregate Commitment.
2.8. Method of Selecting Types and Interest Periods for New
Advances. Group shall select the Type of Advance and, in the case of
each Eurocurrency Advance, the Interest Period and Permitted Currency
applicable to each Advance from time to time. Group shall give the
Agent irrevocable notice (a "Borrowing Notice") not later than 10:00
a.m. (Chicago time) at least one (1) Business Day before the Borrowing
Date of each Floating Rate Advance and at least three (3) Business
Days before the Borrowing Date for each Eurocurrency Advance,
specifying:
(a) the Borrowing Date, which shall be a Business Day, of
such Advance;
(b) the Borrower which is to receive such Advance and the
account to which such Advance is to be funded;
(c) the aggregate principal amount of such Advance;
(d) the Type of Advance selected; and
(e) in the case of each Eurocurrency Advance, the Interest
Period applicable thereto and the Permitted Currency in which
such Advance is to be made.
In the case of Eurocurrency Advances (other than Eurodollar Advances),
not later than 11:00 A.M. (London time) on the Borrowing Date thereof,
each Lender shall make available its Eurocurrency Loan or Eurocurrency
Loans, in funds immediately available in London, in the Permitted
Currency selected by Group, from the Lending Installation specified in
-27-<PAGE>
Schedule 2.8 to the Agent at its London address specified in Schedule
2.8 or at any other Lending Installation of the Agent specified in
writing by the Agent to the Lenders. In the case of Floating Rate
Advances and Eurodollar Advances, not later than noon (Chicago time)
on each Borrowing Date, each Lender shall make available its Loan or
Loans, in funds immediately available in Chicago, in Dollars, to the
Agent at its Chicago address specified in Schedule 2.8 or at any other
Lending Installation of the Agent specified in writing by the Agent to
the Lenders. The Agent will make the funds so received from the
Lenders available to the applicable Borrower to the account specified
in the Borrowing Notice, by 1:00 p.m. (Chicago time), with respect to
Floating Rate Advances and Eurodollar Advances, and promptly following
the receipt of the related Loan from each Lender, with respect to all
other Advances.
2.9. Conversion and Continuation of Outstanding Advances. (a)
Floating Rate Advances shall continue as Floating Rate Advances unless
and until such Floating Rate Advances are repaid or converted into
Eurocurrency Advances. Each Eurodollar Advance shall continue as a
Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be
automatically converted into a Floating Rate Advance unless repaid or
unless Group shall have given the Agent a Conversion/Continuation
Notice requesting that, at the end of such Interest Period, such
Eurodollar Advance either continue as a Eurodollar Advance for the
same or another Interest Period or be converted into a Floating Rate
Advance. Subject to the terms of Sections 2.5 and 3.4, Group may
elect from time to time to convert all or any part of an Advance in
Dollars of any Type into any other Type or Types of Advances in
Dollars.
(b) Each Eurocurrency Advance in an Alternative Currency
shall continue as such until the end of the then applicable Interest
Period therefor, at which time such Eurocurrency Advance shall, unless
repaid, automatically be deemed to be continued as a Eurocurrency
Advance in the same amount and the same Alternative Currency with an
Interest Period of one month (commencing on the last day of the
expiring Interest Period) unless Group shall have given the Agent a
Conversion/Continuation Notice requesting that, at the end of such
Interest Period, such Eurocurrency Advance continue as a Eurocurrency
Advance in the same Alternative Currency for the same or another
Interest Period.
(c) Group shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an Advance or
continuation of a Eurocurrency Advance (as permitted by paragraphs (a)
and (b) above) not later than 10:00 a.m. (Chicago time) at least one
(1) Business Day, in the case of a conversion into a Floating Rate
Advance, or at least three (3) Business Days, in the case of a
-28-<PAGE>
conversion into or continuation of a Eurocurrency Advance, prior to
the date of the requested conversion or continuation, specifying:
(i) the requested date which shall be a Business Day, of
such conversion or continuation;
(ii) the aggregate amount, Permitted Currency and Type of
the Advance which is to be converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such
Advance is to be converted or continued and, in the case of a
conversion into or continuation of a Eurocurrency Advance, the
duration of the Interest Period applicable thereto.
Notwithstanding the provisions of paragraphs (a) and (b) above, no
Eurocurrency Advance shall be continued as or converted into a
Eurocurrency Advance for a new Interest Period if the Current Dollar
Equivalent (determined as of the date of any proposed conversion or
continuation thereof) of the aggregate principal amount of Advances
and Facility Letter of Credit Obligations to be outstanding after
giving effect to such continuation or conversion would exceed the
Aggregate Commitment then in effect. The Borrowers shall reimburse
the Agent on demand for any costs incurred by the Agent resulting from
the conversion pursuant to this Section 2.9 of Eurocurrency Advances
payable in an Alternative Currency to Floating Rate Advances.
2.10. Changes in Interest Rate, etc. (a) Each Floating Rate
Advance shall bear interest at the Floating Rate from and including
the date of such Advance or the date on which such Advance was
converted into a Floating Rate Advance to (but not including) the date
on which such Floating Rate Advance is paid or converted to a
Eurocurrency Advance. Changes in the rate of interest on that portion
of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Floating Rate. Each
Eurocurrency Advance shall bear interest from and including the first
day of the Interest Period applicable thereto to, but not including,
the last day of such Interest Period at the Eurocurrency Rate
applicable to such Eurocurrency Advance. No Interest Period may end
after the Facility Termination Date. The Borrowers shall select
Interest Periods so that it is not necessary to repay any portion of a
Eurocurrency Advance prior to the last day of the applicable Interest
Period in order to make a mandatory repayment required pursuant to
Section 2.1 or Section 2.7.
(b) Notwithstanding any provision to the contrary contained
in this Agreement or the other Loan Documents, the Borrowers shall not
be required to pay, and neither the Agent nor any Lender shall be
permitted to collect, any amount of interest in excess of the maximum
amount of interest permitted by law ("Excess Interest"). If any
Excess Interest is provided for or determined by a court of competent
-29-<PAGE>
jurisdiction to have been provided for under this Agreement or in any
of the other Loan Documents then in such event: (i) the provisions of
this paragraph shall govern and control; (ii) the Borrowers shall not
be obligated to pay any Excess Interest; (iii) any Excess Interest
that the Agent or any Lender may have received hereunder shall be, at
the Agent's option, (A) applied as a credit against the outstanding
principal balance of the Obligations or accrued and unpaid interest
(not to exceed the maximum amount permitted by law), (B) refunded to
the payor thereof, or (C) any combination of the foregoing; (iv) the
interest rate(s) provided for herein shall be automatically reduced to
the maximum lawful rate allowed from time to time under applicable law
(the "Maximum Rate"), and this Agreement and the other Loan Documents
shall be deemed to have been and shall be, reformed and modified to
reflect such reduction; and (v) the Borrowers shall not have any cause
of action against the Agent or any Lender for any damages arising out
of the payment or collection of any Excess Interest. Notwithstanding
the foregoing, if for any period of time interest on any Obligations
is calculated at the Maximum Rate rather than the applicable rate
under this Agreement, and thereafter such applicable rate becomes less
than the Maximum Rate, the rate of interest payable on such
Obligations shall remain at the Maximum Rate until each Lender shall
have received the amount of interest which such Lender would have
received during such period on such Obligations had the rate of
interest not been limited to the Maximum Rate during such period.
2.11. Rates Applicable After Default. Notwithstanding anything
to the contrary contained in Section 2.8 or 2.9, no Advance may be
made as, converted into or continued as a Eurocurrency Advance (except
with the consent of the Required Lenders) when any Default or
Unmatured Default has occurred and is continuing. During the
continuance of a Default, each Eurocurrency Advance shall bear
interest for the remainder of the applicable interest period at a rate
per annum equal to the higher of the rate otherwise applicable to such
Advance or the Floating Rate plus two percent (2.0%) per annum and
each Floating Rate Advance shall bear interest at a rate per annum
equal to the Floating Rate plus two percent (2.0%) per annum, unless
the Lenders shall determine otherwise. The Agent shall give Group
notice of any such changes promptly following the effectiveness
thereof.
2.12. Method of Payment. (a) All payments of the Obligations
hereunder shall be made, without setoff, deduction or counterclaim, in
Dollars in immediately available funds to the Agent at the Agent's
address specified pursuant to Schedule 2.8 in respect of Advances in
Dollars (or, in the case of payments of principal of and interest on
Advances denominated in Alternative Currencies, in the Alternative
Currency borrowed, at the Agent's address for Advances of Alternative
Currencies, as specified in Schedule 2.8), or, subject to Section 3.6,
at any other Lending Installation of the Agent specified in writing by
the Agent to Group by noon (Chicago time) on the date when due and
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shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be
delivered promptly by the Agent to such Lender in the same type of
funds that the Agent received, at its address for Dollar Advances or
for Alternative Currency Advances as specified in Schedule 2.8 or at
any other Lending Installation specified in a notice received by the
Agent from such Lender, subject, if then applicable and in effect, to
the terms of the Intercreditor Agreement. The Agent is hereby
authorized to charge the account of Group or any Borrower maintained
with First Chicago for each payment of principal, interest and fees as
it becomes due hereunder.
(b) All payments of principal of and interest on any
Advance or of Facility Letter of Credit Reimbursement Obligations or
any other Obligations hereunder shall be made by the Borrower
responsible therefor in the currency borrowed (the "Specified
Currency") in the manner and at the address (the "Specified Place")
specified in Section 2.12(a). Payment of the Obligations shall not be
discharged by an amount paid in another currency or in another place,
whether pursuant to a judgment or otherwise, to the extent that the
amount so paid on conversion to the Specified Currency and transferred
to the Specified Place under normal banking procedures does not yield
the amount of the Specified Currency at the Specified Place due
hereunder. If, for the purpose of obtaining judgment in any court, it
is necessary to convert a sum due hereunder in the Specified Currency
into another currency (the "Judgment Currency"), the rate of exchange
which shall be applied shall be that at which in accordance with
normal banking procedures the Agent could purchase the Judgment
Currency with that amount of the Specified Currency on the Business
Day next preceding that on which such judgment is rendered. The
obligation of each Borrower in respect of any such sum due from it to
the Agent or any Lender hereunder (an "Entitled Person") shall,
notwithstanding the rate of exchange actually applied in rendering
such judgment, be discharged only to the extent that on the Business
Day following receipt by such Entitled Person of any sum adjudged to
be due hereunder or under the Notes in the Judgment Currency, such
Entitled Person may in accordance with normal banking procedures
purchase and transfer to the Specified Place the Specified Currency
with the amount of the Judgment Currency so adjudged to be due; and
each Borrower hereby, as a separate Obligation and notwithstanding any
such judgment, agrees to indemnify such Entitled Person against, and
to pay such Entitled Person on demand, in the Specified Currency, any
difference between the sum originally due to such Entitled Person in
the Specified Currency and the amount of the Specified Currency so
purchased and transferred.
2.13. Notes; Telephonic Notices. Each Lender is hereby
authorized to record the principal amount of each of its Loans and
each repayment on the schedule attached to its Note or otherwise in
accordance with its usual practices; provided, however, that neither
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the failure to so record nor any error in such recordation shall
affect any Borrower's obligations under any such Note. Each Borrower
hereby authorizes the Lenders and the Agent to extend, convert or
continue Advances, effect selections of Types of Advances and to
transfer funds and each Issuer to issue Facility Letters of Credit for
its account where applicable based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be
an Authorized Officer of such Borrower. Each Borrower agrees to
deliver promptly to the Agent a written confirmation, if such
confirmation is requested by the Agent or any Lender, of each
telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders
shall govern absent manifest error.
2.14. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment
Date, commencing with the first such date to occur after the date
hereof, on any date on which a Floating Rate Advance is permanently
prepaid, whether due to acceleration or otherwise, and at maturity.
Interest accrued at the Floating Rate on that portion of the
outstanding principal amount of any Floating Rate Advance converted
into a Eurocurrency Advance on a day other than a Payment Date shall
be payable on the next Payment Date. Interest accrued on each
Eurocurrency Advance shall be payable in the currency in which such
Advance is denominated on the last day of its applicable Interest
Period, on any date on which the Eurocurrency Advance is prepaid,
whether by acceleration or otherwise, and at maturity. Interest
accrued on each Eurocurrency Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-
month interval during such Interest Period. Interest and commitment
fees shall be calculated for actual days elapsed on the basis of a
360-day year (except with respect to Loans denominated in pounds
sterling, which shall be calculated for actual days elapsed on the
basis of a 365-day year). Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid
if payment is received prior to noon (Chicago time) at the place of
payment. If any payment of principal of or interest on an Advance
shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the case of
a principal payment, such extension of time shall be included in
computing interest in connection with such payment.
2.15. Notification by Agent. Promptly after receipt thereof, the
Agent will notify each Lender of the contents of each Aggregate
Commitment reduction notice, Borrowing Notice, Conversion/Continuation
Notice, request for a Facility Letter of Credit, Notice of Issuance
and repayment notice received by it hereunder. The Agent will notify
each Lender and Group of the interest rate applicable to each
Eurocurrency Advance promptly upon determination of such interest rate
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and will give each Lender and Group prompt notice of each change in
the Floating Rate.
2.16. Lending Installations. Subject to Section 3.6, each Lender
may book its Loans at any Lending Installation selected by such Lender
and may change its Lending Installation from time to time; provided,
that such Lender shall remain the legal entity exclusively entitled to
all rights and responsible for all obligations of a Lender hereunder
unless such Lender enters into an assignment in compliance with
Section 12.3. All terms of this Agreement shall apply to any such
Lending Installation and the Notes shall be deemed held by each Lender
for the benefit of such Lending Installation. Subject to Section 3.6,
each Lender may, by written or telex notice to the Agent and Group,
designate a Lending Installation through which Loans will be made by
it and for whose account Loan payments are to be made.
2.17. Non-Receipt of Funds by the Agent. Unless the applicable
Borrower or a Lender, as the case may be, notifies the Agent prior to
the date on which it is scheduled to make payment to the Agent of (a)
in the case of a Lender, the proceeds of a Loan, or (b) in the case of
such Borrower, a payment of principal, interest or fees to the Agent
for the account of the Lenders, that it does not intend to make such
payment, the Agent may assume that such payment has been made. The
Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such
assumption. If such Borrower has not in fact made such payment to the
Agent, the Lenders shall, on demand by the Agent, repay to the Agent
the amount so made available together with interest thereon in respect
of each day during the period commencing on the date such amount was
so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) the Federal Funds Effective
Rate for such day for amounts denominated in or calculated with
reference to Dollars and (ii) the Eurocurrency Base Rate for amounts
denominated in or calculated with reference to Alternative Currencies.
If any Lender has not in fact made such payment to the Agent, such
Lender or the Borrowers shall, on demand by the Agent, repay to the
Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to (a) in the case of
payment by a Lender, the Federal Funds Effective Rate for such day for
amounts denominated in or calculated with reference to Dollars and the
Eurocurrency Base Rate for such day for amounts denominated in or
calculated with reference to Alternative Currencies, or (b) in the
case of payment by the Borrowers, the interest rate applicable to the
relevant Loan.
2.18. Withholding Tax Exemption. (a) At least five Business Days
prior to the first date on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is not
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incorporated under the laws of the United States of America, or a
state thereof, agrees that it will deliver to each of Group and the
Agent two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, certifying in either case that such Lender
is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal income
taxes. Each Lender which so delivers a Form 1001 or 4224 further
undertakes to deliver to each of Group and the Agent two additional
copies of such form (or a successor form) on or before the date that
such form expires (currently, three successive calendar years for Form
1001 and one calendar year for Form 4224) or becomes obsolete or after
the occurrence of any event requiring a change in the most recent
forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by Group or the Agent,
in each case certifying that such Lender is entitled to receive
payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes, unless an event
(including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable
or which would prevent such Lender from duly completing and delivering
any such form with respect to it and such Lender advises Group and the
Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
(b) Each Lender agrees promptly to notify Group if it is not, or
ceases to be, a Qualifying Lender. If any Lender (i) is not a
Qualifying Lender on the date on which it makes a Loan to a UK
Borrower (or, where the Lender would only qualify as a Qualifying
Lender by virtue of paragraph (b) of the definition thereof, at the
date (the "Critical Date") five business days prior to the date on
which such Lender is first entitled to receive any payment from a UK
Borrower in respect of a Loan to such UK Borrower) or (ii) ceases to
be a Qualifying Lender at any time after the date on which it has made
such a Loan or the Critical Date (as the case may be) but prior to the
repayment of all amounts in respect of such Loan, otherwise than by
reason of any change in law (which term shall include any change in
the terms of any relevant Double Taxation Treaty) or in its
application or interpretation, such Borrower shall not be liable to
pay to such Lender any amount greater than the amount which such
Borrower would have been liable to pay to such Lender if such Lender
had been a Qualifying Lender or, as the case may be, had not ceased to
be a Qualifying Lender. When any Lender is or becomes a Qualifying
Lender pursuant to paragraph (b) of the definition of "Qualifying
Lender", such Lender hereby undertakes to claim promptly, following
the date on which it makes a Loan to a UK Borrower, exemption from
United Kingdom withholding tax to which such Lender is entitled by
virtue of the relevant Double Taxation Treaty and if such Lender fails
promptly to make such claim, any sum due to the Qualifying Lender
under this Agreement shall not be increased until such claim has been
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submitted. Each Borrower undertakes to do all things as shall be
reasonably required of it in order to assist any such Lender in
claiming such exemption.
2.19. Agent's Fees. The Borrowers shall pay to the Agent those
fees, in addition to the fees referenced in Sections 2.4(a) and 2.20,
in the amounts and at the times separately agreed to between the Agent
and Group.
2.20. Facility Fee. Concurrently with the execution of this
Agreement, the Borrowers shall pay to the Agent for the account of
each Lender a facility fee equal to .075% of such Lender's Commitment.
2.21. Determination, Denomination and Redenomination of
Alternative Currency Advances. Whenever, pursuant to any provision of
this Agreement:
(a) an Advance is initially funded, as opposed to any
continuation or conversion thereof, in an Alternative Currency,
the amount to be advanced hereunder will be the equivalent in
such Alternative Currency of the Dollar Amount of such Advance;
and
(b) an existing Advance denominated in an Alternative
Currency is to be continued, in whole or in part, the amount of
the new Advance shall be continued in the same amount of the same
Alternative Currency.
2.22. Facility Letters of Credit.
2.22.1 Issuance of Facility Letters of Credit. (a) From
and after the date hereof, the Issuer agrees, upon the terms and
conditions set forth in this Agreement, to issue at the request
of Group and for the account of either Group or Delfield, one or
more Facility Letters of Credit; provided, however, that the
Issuer shall not be under any obligation to issue, and shall not
issue, any Facility Letter of Credit if (i) any order, judgment
or decree of any Governmental Agency shall purport by its terms
to enjoin or restrain such Issuer from issuing such Facility
Letter of Credit, or any law or governmental rule, regulation,
policy, guideline or directive (whether or not having the force
of law) from any Governmental Agency with jurisdiction over the
Issuer shall prohibit, or request that the Issuer refrain from,
the issuance of Facility Letters of Credit in particular or shall
impose upon the Issuer with respect to any Facility Letter of
Credit any restriction or reserve or capital requirement (for
which the Issuer is not otherwise compensated) or any
unreimbursed loss, cost or expense which was not applicable, in
effect as of the date of this Agreement and which the Issuer in
good faith deems material to it; (ii) one or more of the
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conditions to such issuance contained in Section 4.2 is not then
satisfied; or (iii) after giving effect to such issuance, the
aggregate outstanding amount of the Facility Letter of Credit
Obligations would exceed the Facility Letter of Credit Sublimit;
provided, that if any circumstances arise which result in any
payment being required or in the unavailability of any Facility
Letter of Credit due to any circumstance set forth in clause (i)
above, then the Issuer shall take such steps as it determines are
reasonably available to it to mitigate the effect of such
circumstances so long as taking such steps is not disadvantageous
to such Lender.
(b) In no event shall: (i) the aggregate amount of the
Facility Letter of Credit Obligations at any time exceed the
Facility Letter of Credit Sublimit; (ii) the sum at any time of
(A) the aggregate amount of Facility Letter of Credit Obligations
and (B) the aggregate principal balance of outstanding Advances
exceed the amount of the Aggregate Commitment; or (iii) the
expiration date of any Facility Letter of Credit (including,
without limitation, Facility Letters of Credit issued with an
automatic "evergreen" provision providing for renewal absent
advance notice by the applicable Borrower or the Issuer), or the
date for payment of any draft presented thereunder and accepted
by the Issuer, be later than the Facility Termination Date.
2.22.2 Participating Interests. Immediately upon the
issuance by the Issuer of a Facility Letter of Credit in
accordance with Section 2.22.4, each Lender shall be deemed to
have irrevocably and unconditionally purchased and received from
the Issuer, without recourse, representation or warranty, an
undivided participation interest equal to its pro-rata share of
the Aggregate Commitment of the principal amount of such Facility
Letter of Credit and each draw paid by the Issuer thereunder.
Each Lender's obligation to pay its proportionate share of all
draws under the Facility Letters of Credit shall be absolute,
unconditional and irrevocable and in each case shall be made
without counterclaim or set-off by such Lender.
2.22.3 Facility Letter of Credit Reimbursement
Obligations. (a) Each Borrower agrees to pay to the Issuer of
a Facility Letter of Credit (i) on each date that any amount is
drawn under each Facility Letter of Credit a sum (and interest on
such sum as provided in clause (ii) below) equal to the amount so
drawn plus all other charges and expenses with respect thereto
specified in Section 2.22.6 or in the applicable Reimbursement
Agreement and (ii) interest on any and all amounts remaining
unpaid under this Section 2.22.3 until payment in full at the
Floating Rate plus the margin specified in Section 2.11. Each
Borrower agrees to pay to the Issuer the amount of all Facility
Letter of Credit Reimbursement Obligations owing in respect of
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any Facility Letter of Credit immediately when due, under all
circumstances, including, without limitation, any of the
following circumstances: (a) any lack of validity or
enforceability of this Agreement or any of the Loan Documents;
(b) the existence of any claim, set-off, defense or other right
which any Borrower may have at any time against a beneficiary
named in a Facility Letter of Credit, any transferee of any
Facility Letter of Credit (or any Person for whom any such
transferee may be acting), any Lender or any other Person,
whether in connection with this Agreement, any Facility Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the
Borrower and the beneficiary named in any Facility Letter of
Credit); (c) the validity, sufficiency or genuineness of any
document which the Issuer has determined in good faith complies
on its face with the terms of the applicable Facility Letter of
Credit, even if such document should later prove to have been
forged, fraudulent, invalid or insufficient in any respect or any
statement therein shall have been untrue or inaccurate in any
respect; or (d) the surrender or impairment of any security for
the performance or observance of any of the terms hereof.
(b) Notwithstanding any provisions to the contrary in any
Reimbursement Agreement, each Borrower agrees to reimburse the
Issuer for amounts which the Issuer pays under such Facility
Letter of Credit no later than the time specified in this
Agreement. If the applicable Borrower does not pay any such
Facility Letter of Credit Reimbursement Obligations when due,
such Borrower shall be deemed to have immediately requested that
the Lenders make a Floating Rate Advance under this Agreement in
a principal amount equal to such unreimbursed Facility Letter of
Credit Reimbursement Obligations. The Agent shall promptly
notify the Lenders of such deemed request and, without the
necessity of compliance with the requirements of Sections 2.5 and
4.2, each Lender shall make available to the Agent its Loan in
the manner prescribed for Floating Rate Advances. The proceeds
of such Loans shall be paid over by the Agent to the Issuer for
the account of the applicable Borrower in satisfaction of such
unreimbursed Facility Letter of Credit Reimbursement Obligations,
which shall thereupon be deemed satisfied by the proceeds of, and
replaced by, such Floating Rate Advance. In the case of any
Facility Letter of Credit Obligations arising under a Facility
Letter of Credit denominated in an Alternative Currency, the
applicable Borrower shall pay to the Issuer the equivalent of the
amount paid by the Issuer in Dollars at the rate of exchange then
current in Chicago, as reasonably determined by the Issuer. If
at any time there is no rate of exchange generally current in
Chicago, then the applicable Borrower shall pay the Issuer an
amount in Dollars equivalent to the actual cost of settlement.
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(c) If the Issuer makes a payment on account of any
Facility Letter of Credit and is not concurrently reimbursed
therefor by the applicable Borrower and if for any reason a
Floating Rate Advance may not be made pursuant to paragraph (b)
above, then as promptly as practical during normal banking hours
on the date of its receipt of such notice or, if not practicable
on such date, not later than noon (Chicago time) on the Business
Day immediately succeeding such date of notification, each Lender
shall deliver to the Agent for the Account of the Issuer, in
immediately available funds, the purchase price for such Lender's
interest in such unreimbursed Facility Letter of Credit
Obligations, which shall be an amount equal to such Lender's pro-
rata share of such payment. Each Lender shall, upon demand by
the Issuer, pay the Issuer interest on such Lender's pro-rata
share of such draw from the date of payment by the Issuer on
account of such Facility Letter of Credit until the date of
delivery of such funds to the Issuer by such Lender at a rate per
annum, computed for actual days elapsed based on a 360-day year,
equal to the Federal Funds Effective Rate for such period;
provided, that such payments shall be made by the Lenders only in
the event and to the extent that the Issuer is not reimbursed in
full by the applicable Borrower for interest on the amount of any
draw on the Facility Letters of Credit.
(d) At any time after the Issuer has made a payment on
account of any Facility Letter of Credit and has received from
any other Lender such Lender's pro-rata share of such payment,
such Issuer shall, forthwith upon its receipt of any
reimbursement (in whole or in part) by the applicable Borrower
for such payment, or of any other amount from the applicable
Borrower or any other Person in respect of such payment
(including, without limitation, any payment of interest or
penalty fees and any payment under any collateral account
agreement of the applicable Borrower or any Loan Document but
excluding any transfer of funds from any other Lender pursuant to
Section 2.22.3(b), transfer to such other Lender such other
Lender's ratable share of such reimbursement or other amount;
provided, that interest and penalty fees shall accrue for the
benefit of such Lender from the time such Issuer has made a
payment on account of any Facility Letter of Credit; provided,
further, that in the event that the receipt by the Issuer of such
reimbursement or other amount is found to have been a transfer in
fraud of creditors or a preferential payment under the United
States Bankruptcy Code or is otherwise required to be returned,
such Lender shall promptly return to the Issuer any portion
thereof previously transferred by the Issuer to such Lender, but
without interest to the extent that interest is not payable by
the Issuer in connection therewith.
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2.22.4 Procedure for Issuance. Prior to the issuance of
each Facility Letter of Credit, and as a condition of such
issuance, the applicable Borrower shall deliver to the Issuer an
application and Reimbursement Agreement, substantially in the
form of Exhibit C-1 or Exhibit C-2 hereto, as applicable (or in
such other form as shall then represent the standard forms of the
Issuer and as shall be reasonably acceptable to Group), signed by
such Borrower, together with such other documents or items as may
be required pursuant to the terms thereof, and the proposed form
and content of such Facility Letter of Credit shall be reasonably
satisfactory to the Issuer. Each Facility Letter of Credit shall
be issued no earlier than two (2) Business Days after delivery of
the foregoing documents, which delivery may be by the applicable
Borrower to the Issuer by telecopy, telex or other electronic
means, followed by delivery of executed originals within five (5)
days thereafter. The documents so delivered shall be in
compliance with the requirements set forth in Section 2.22.1(b),
and shall specify therein (i) the stated amount of the Facility
Letter of Credit requested, (ii) the effective date of issuance
of such requested Facility Letter of Credit, which shall be a
Business Day, (iii) the date on which such requested Facility
Letter of Credit is to expire, which shall be a Business Day
prior to the Facility Termination Date, and (iv) the account
party for whose benefit the requested Facility Letter of Credit
is to be issued, which shall be Group or Delfield. The delivery
of the foregoing documents and information shall constitute a
"Notice of Issuance" for purposes of this Agreement. Subject to
the terms and conditions of Section 2.22.1 and provided that the
applicable conditions set forth in Section 4.2 hereof have been
satisfied, the Issuer shall, on the requested date, issue a
Facility Letter of Credit on behalf of the applicable Borrower in
accordance with the Issuer's usual and customary business
practices. In addition, any amendment of an existing Facility
Letter of Credit shall be deemed to be an issuance of a new
Facility Letter of Credit and shall be subject to the
requirements set forth herein pursuant to a form of application
acceptable to the Issuer.
2.22.5 Nature of the Lenders' Obligations. (a) As
between each Borrower and the Lenders, such Borrower assumes all
risks of the acts and omissions of, or misuse of the Facility
Letters of Credit by, the respective beneficiaries of the
Facility Letters of Credit. In furtherance and not in limitation
of the foregoing, the Lenders shall not be responsible for (i)
the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with
the application for an issuance of a Facility Letter of Credit,
even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or
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assigning or purporting to transfer or assign a Facility Letter
of Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, which may prove to be invalid or
ineffective for any reason; (iii) the failure of the beneficiary
of a Facility Letter of Credit to comply fully with conditions
required to be satisfied by any Person other than the Issuer in
order to draw upon such Facility Letter of Credit; (iv) errors,
omissions, interruptions or delays in transmission or delivery of
any messages, by mail, cable, telegraph, telex or otherwise; (v)
errors in the interpretation of technical terms; (vi) the
misapplication by the beneficiary of a Facility Letter of Credit
of the proceeds of any drawing under such Facility Letter of
Credit; or (vii) any consequences arising from causes beyond
control of the Issuer.
(b) In furtherance and extension and not in limitation of
the specific provisions hereinabove set forth, any action taken
or omitted by the Issuer under or in connection with the Facility
Letters of Credit or any related certificates, if taken or
omitted in good faith, shall not put the Agent or any Lender
under any resulting liability to any Borrower or relieve any
Borrower of any of its obligations hereunder to the Issuer or any
such Person.
2.22.6 Facility Letter of Credit Fees. Group shall or
shall cause Delfield to pay letter of credit fees with respect to
each standby Facility Letter of Credit equal to (a) .15% of the
face amount of such Facility Letter of Credit, payable to the
Issuer upon issuance, and (b) a per annum rate equal to the then
effective Applicable Eurocurrency Margin times the outstanding
face amount of such standby Facility Letter of Credit, payable to
the Agent for the account of the Lenders, in each case payable in
arrears on the last Business Day of each calendar quarter. In
addition to the foregoing, (x) Group shall or shall cause
Delfield to pay to the Issuer any other processing, issuance,
amendment and other similar fees customarily charged by it in
respect of Facility Letters of Credit issued by it, together with
the Issuer's out-of-pocket costs of issuing and servicing
Facility Letters of Credit, and (y) Group shall or shall cause
Delfield to pay to the Agent for the account of the Issuer, upon
any transfer of any Facility Letter of Credit by the beneficiary
thereof to a new beneficiary, a transfer commission equal to the
greater of $100 or .25% of the amount transferred which shall not
in any event exceed $750.
ARTICLE III
CHANGE IN CIRCUMSTANCES
-----------------------
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3.1. Taxes. (a) Except as otherwise required by applicable law,
all sums payable by any Borrower whether in respect of principal,
interest, fees or otherwise shall be paid without deduction for any
present and future taxes, levies, assessments, imposts, deductions,
charges or withholdings imposed by any country, any Governmental
Agency thereof or therein, any jurisdiction from which any or all such
payments are made and any political subdivision or taxing authority
thereof or therein, excluding income and franchise taxes (and
deductions and withholdings therefor) imposed on the Agent or any
Lender (i) by the jurisdiction under the laws of which the Agent or
such Lender is organized or any Governmental Agency or taxing
authority thereof or therein, or (ii) by any jurisdiction in which the
Agent's or such Lender's Lending Installations are located or any
Governmental Agency or taxing authority thereof or therein (such
excluded taxes, deductions and withholdings, collectively, "Excluded
Taxes", and all such taxes, levies, imposts, deductions, charges and
withholdings (including Excluded Taxes), collectively, "Taxes"), which
amounts shall be paid by such Borrower as provided in Section 3.1(b).
(b) If (i) any Borrower or any other Person is required by
law to make any deduction or withholding on account of any Tax (other
than Excluded Taxes) or other amount from any sum paid or expressed to
be payable by any Borrower to any Lender under this Agreement; or (ii)
any party to this Agreement (or any Person on its behalf) other than
any Borrower is required by law to make any deduction or withholding
from, or (other than on account of any Excluded Tax) any payment on or
calculated by reference to the amount of, any such sum received or
receivable by any Lender under this Agreement, then, subject to
Section 2.18(b):
(w) Group shall notify the Agent of any such requirement or
any change in any such requirement as soon as any
Borrower becomes aware of it;
(x) Group shall or shall cause the other Borrowers to pay
any such Tax or other amount before the date on which
penalties attached thereto become due and payable, such
payment to be made (if the liability to pay is imposed
on Group or such Borrowers) for its own account or (if
that liability is imposed on any other party to this
Agreement) on behalf of and in the name of that party;
(y) the sum payable by Group or such Borrowers in respect
of which the relevant deduction, withholding or payment
is required shall (except, in the case of any such
payment, to the extent that the amount thereof is not
ascertainable when that sum is paid) be increased to
the extent necessary to ensure that, after the making
of that deduction, withholding or payment, that party
receives on the due date and retains (free from any
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liability in respect of any such deduction, withholding
or payment) a sum equal to that which it would have
received and so retained had no such deduction,
withholding or payment been required or made; and
(z) within thirty (30) days after payment of any sum from
which such Borrower is required by law to make any
deduction or withholding, and within thirty (30) days
after the due date of payment of any Tax or other
amount which it is required by clause (x) above to pay,
it shall deliver to the Agent all such certified
documents and other evidence as to the making of such
deduction, withholding or payment as (i) are reasonably
satisfactory to other affected parties as proof of such
deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority and
(ii) are reasonably required by any such party to
enable it to claim a tax credit with respect to such
deduction, withholding or payment.
3.2. Yield Protection. (a) If, after the date hereof, the
adoption of any change in any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending
Installation to any Tax on or from payments due from
any Borrower (excluding Excluded Taxes), or changes the
basis of taxation of payments to any Lender or Lending
Installation in respect of its Loans or its interest in
the Facility Letters of Credit or other amounts due it
hereunder (excluding Excluded Taxes), or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or
for the account of, or credit extended by, any Lender
or any applicable Lending Installation (other than
reserves and assessments taken into account in
determining the interest rate applicable to
Eurocurrency Advances), or
(iii) imposes any other condition (except with respect to
Excluded Taxes) the result of which is to increase the
cost to any Lender or any applicable Lending
Installation of making, funding or maintaining Loans or
issuing Facility Letters of Credit or reduces any
amount receivable by any Lender or any applicable
Lending Installation in connection with Loans or
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Facility Letters of Credit, or requires any Lender or
any applicable Lending Installation to make any payment
calculated by reference to the amount of Loans held, or
interest received by it thereon, or Facility Letters of
Credit issued or participated in by it by an amount
reasonably deemed material by such Lender,
then, within 15 days of demand by such Lender, Group shall or shall
cause the other Borrowers to pay such Lender that portion of such
increased expense incurred or resulting in an amount received which
such Lender reasonably determines is attributable to making, funding
and maintaining its Loans, its Commitment or its interest in Facility
Letters of Credit.
(b) In addition to any other amounts payable by the
Borrowers hereunder, each Lender may require the relevant Borrower to
pay, contemporaneously with each payment of interest on Eurocurrency
Advances of such Borrower which are denominated in pounds sterling,
additional interest on the related Eurocurrency Loan of such Lender at
the percentage calculated from time to time by such Lender to be the
percentage required to fully compensate such Lender for all reserve
costs, liabilities, expenses and assessments (other than reserve
costs, liabilities, expenses and assessments taken into account in
determining the interest rate applicable to such Eurocurrency Advance)
which have been incurred by such Lender (or its applicable Lending
Installation) regarding the making, funding or maintaining of such
Eurocurrency Loan (including, without limitation, any and all liquid
asset maintenance requirements of the Bank of England). A certificate
of any Lender claiming compensation under the preceding sentence,
setting forth the additional interest to be paid to it thereunder and
setting forth in reasonable detail a reasonable basis therefor, shall
be conclusive in the absence of manifest error, and in determining the
amount of such interest, such Lender may use any reasonable averaging
and attribution methods. Any Lender wishing to require payment of
such additional interest (i) shall so notify Group and the Agent, in
which case such additional interest on the Eurocurrency Loans of such
Lender denominated in pounds sterling shall be payable in pounds
sterling to such Lender at the place indicated in such notice with
respect to each Interest Period commencing at least five Business Days
after the giving of such notice and (ii) shall notify Group at least
five Business Days prior to each date on which interest is payable on
such Eurocurrency Loans of the amount then due it under this Section
3.2(b). Following Group's request made at least two (2) Business Days
prior to the delivery of any Borrowing Notice relating thereto, the
Agent and the Lenders shall, prior to the making of a proposed
Eurocurrency Advance denominated in pounds sterling, provide notice to
Group of any such additional interest known at such time to be payable
with respect thereto.
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3.3. Changes in Capital Adequacy Regulations. If a Lender
reasonably determines the amount of capital required or expected to be
maintained by such Lender, any applicable Lending Installation of such
Lender or any corporation controlling such Lender is increased as a
result of a Change, then, within 15 days of demand by such Lender,
Group shall or shall cause the other Borrowers to pay such Lender the
amount necessary to compensate for any shortfall in the rate of return
on the portion of such increased capital which such Lender reasonably
determines is attributable to this Agreement, its Loans, its interest
in Facility Letters of Credit or its obligation to make Loans or to
participate in or issue Facility Letters of Credit hereunder (after
taking into account such Lender's policies as to capital adequacy).
"Change" means (a) any change after the date of this Agreement in the
Risk-Based Capital Guidelines, or (b) any adoption of or change in any
other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having
the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender
or any Lending Installation or any corporation controlling any Lender.
"Risk-Based Capital Guidelines" means (a) the risk-based capital
guidelines in effect in the United States on the date of this
Agreement, including transition rules, and (b) the corresponding
capital regulations promulgated by regulatory authorities outside the
United States implementing the July 1988 report of the Basle Committee
on Banking Regulation and Supervisory Practices entitled
"International Convergence of Capital Measurements and Capital
Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
3.4. Availability of Types of Advances. If any Lender reasonably
determines that maintenance of its Eurocurrency Advances at a suitable
Lending Installation would violate any applicable law, rule,
regulation, or directive, whether or not having the force of law, or
if the Required Lenders determine that (a) deposits of a type and
maturity appropriate to match fund Eurocurrency Advances are not
available, or (b) the interest rate applicable to a Type of Advance
does not accurately or fairly reflect the cost of making or
maintaining such Advance, then the Agent shall suspend the
availability of the affected Type of Advance and (other than for
matters described in the foregoing clauses (a) and (b)) require any
Eurocurrency Advances of the affected Type to be repaid.
3.5. Funding Indemnification. If any payment of a Eurocurrency
Advance occurs on a date which is not the last day of the applicable
Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurocurrency Advance is not made on the date specified
by Group for any reason other than default by the Lenders, Group shall
or shall cause the other Borrowers to indemnify the Agent and each
Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or
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employing deposits acquired to fund or maintain the Eurocurrency
Advance.
3.6. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to the making and repayment of Eurocurrency
Advances or take such other steps as it determines are reasonably
available to it to reduce any liability of the Borrowers to such
Lender under Sections 3.1, 3.2 and 3.3 or to avoid the unavailability
of a Type of Advance under Section 3.4, so long as such designation or
other step is not disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to Group (with a copy to
the Agent) as to the amount due, if any, under Sections 3.1, 3.2, 3.3
or 3.5. Such written statement shall set forth in reasonable detail
the calculations upon which such Lender determined such amount and
shall be final, conclusive and binding on the Borrowers in the absence
of manifest error. Determination of amounts payable under such
Sections in connection with a Eurocurrency Loan shall be calculated as
though each Lender funded its Eurocurrency Loan through the purchase
of a deposit of the type and maturity corresponding to the deposit
used as a reference in determining the Eurocurrency Rate applicable to
such Loan, whether in fact that is the case or not. Unless otherwise
provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by Group of the
written statement. The obligations of the Borrowers under Sections
3.1, 3.2, 3.3 and 3.5 shall survive payment of the Obligations and
termination of this Agreement.
3.7. Availability of Alternative Currency. The Lenders shall not
be required to make any Advance requested to be made in an Alternative
Currency if, at any time prior to making such Advance, any Lender
(after consultation with the Agent) shall determine, in its sole
discretion, that (a) deposits in the applicable Alternative Currency
in the amounts and maturities required to fund such Advance will not
be available to such Lender; (b) a fundamental change has occurred in
the foreign exchange or interbank markets with respect to the
applicable Alternative Currency (including, without limitation,
changes in national or international financial, political or economic
conditions or currency exchange rates or exchange controls); or (c) it
has become otherwise materially impractical for such Lender to make
such Advance in the applicable Alternative Currency. The Agent shall
promptly notify Group and each Lender of any such determination.
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ARTICLE IV
CONDITIONS PRECEDENT
-------------------
4.1. Initial Loan and Facility Letter of Credit Issuance. The
Lenders shall not be required to make the initial Advances or issue
the initial Facility Letter of Credit hereunder unless the Borrowers
have furnished to the Agent with sufficient copies for the Lenders:
(a) Charter Documents. Copies of the charter or equivalent
constitutive documents of each Loan Party, together with all
amendments, and, with respect to Industries and its Domestic
Subsidiaries, a certificate of good standing, in each case certified
by the appropriate governmental officer in its jurisdiction of
incorporation or formation.
(b) By-Laws and Resolutions. Copies, certified by an
officer or director of each Loan Party, of its by-laws or equivalent
constitutive documents (where applicable) and of resolutions of its
board of directors and, where required, its shareholders, authorizing
the execution, delivery and performance of the Loan Documents to which
such Loan Party is a party.
(c) Officer's Certificate. An incumbency certificate,
executed by an officer or director of each Loan Party, which shall
identify by name and title and bear the signature of the officers of
such Loan Party authorized to sign the Loan Documents and (with
respect to each of Group, Delfield, Scotsman Drink, Whitlenge, Frimont
and Castel MAC) to make borrowings hereunder, upon which certificate
the Agent and the Lenders shall be entitled to rely until informed of
any change in writing by such Borrower.
(d) Officer's Certificate. A certificate, dated the
initial Borrowing Date, signed by an Authorized Officer of Industries,
in form and substance satisfactory to the Agent, to the effect that:
(i) on the initial Borrowing Date (after giving effect to the
consummation of the Acquisition and the Merger and the making of the
Loans hereunder) no Default or Unmatured Default has occurred and is
continuing; (ii) no injunction or temporary restraining order which
would prohibit the making of the Loans, the consummation of any part
of the Acquisition, the Merger, or any of the other transactions
contemplated by any of the Transaction Documents (collectively the
"Closing Transactions"), or other litigation which could reasonably be
expected to have a Material Adverse Effect is pending or, to the best
of such Person's knowledge, threatened; (iii) all orders, consents,
approvals, licenses, authorizations or validations of, or filings,
recordings or registrations with, or exemptions by, any governmental
or public body or authority, or any subdivision thereof, required to
make or consummate the Closing Transactions have been or, prior to the
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time required, will have been, obtained, given, filed or taken and are
or will be in full force and effect (or the applicable Loan Party has
obtained effective judicial relief with respect to the application
thereof) and that all applicable waiting periods have expired; (iv)
the Transaction Documents are in full force and effect and no term or
condition thereof has been amended, modified or waived after the
execution thereof except with the written consent of the Agent; (v) no
Loan Party has failed to perform any material obligation or covenant
required in connection with any Closing Transaction to be performed or
complied with by it on or before the initial Borrowing Date; (vi) each
of the representations and warranties set forth in Article V of this
Agreement is true and correct on and as of the date hereof; and (vii)
since January 2, 1994, no event or change has occurred that has caused
or evidences a Material Adverse Effect.
(e) Legal Opinions. (i) A written opinion of Schiff,
Hardin & Waite, counsel to Industries and its Subsidiaries, addressed
to the Agent and the Lenders in form and substance acceptable to the
Agent and its counsel, (ii) written opinions of Ashurst Morris Crisp,
special English counsel to Industries and its Subsidiaries, and Besana
Studio Legale Associato, special Italian counsel to Industries and its
Subsidiaries, in each case addressed to the Agent and the Lenders in
form and substance acceptable to the Agent and its counsel, and (iii)
confirmation that the Agent and the Lenders may rely upon the opinions
delivered pursuant to the Purchase Agreement and the Merger Agreement
(other than those delivered by counsel to certain of the selling
shareholders).
(f) Notes. Notes payable to the order of each of the
Lenders duly executed by each Borrower.
(g) Loan Documents. Executed originals of this Agreement
and each of the Loan Documents, which shall be in full force and
effect, together with all schedules, exhibits, certificates,
instruments, opinions, documents and financial statements required to
be delivered pursuant hereto and thereto.
(h) Letters of Direction. Written money transfer
instructions with respect to the initial Advances and to future
Advances in form and substance acceptable to the Agent and its counsel
addressed to the Agent and signed by an Authorized Officer, together
with such other related money transfer authorizations as the Agent may
have reasonably requested.
(i) Merger Documents. A copy of the Merger Documents,
together with a certificate of Industries certifying that the Merger
has been effected in accordance with the Merger Agreement and is
otherwise legal and valid and that no material conditions to closing
by Industries or any of its Subsidiaries and set forth therein have
been waived.
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(j) Acquisition Documents. A copy of the Acquisition
Documents, together with a certificate of Industries certifying that
the Acquisition has been consummated in accordance with the Purchase
Agreement and that no material conditions to closing by Industries or
any of its Subsidiaries and set forth therein have been waived.
(k) Solvency Certificate. A written solvency certificate
from the chief financial officer of Industries in form and content
satisfactory to the Agent, dated the initial Borrowing Date, with
respect to the value, Solvency and other factual information of, or
relating to, as the case may be, Industries and its Subsidiaries on a
consolidated basis, both before and after giving effect to the Closing
Transactions contemplated by the Transaction Documents.
(l) Accountants' Letter. A signed letter from Arthur
Andersen & Co. in form and substance satisfactory to the Agent
acknowledging that the Lenders may rely on current financial
statements audited by such firm.
(m) Senior Notes. A copy of the Amended and Restated Note
Purchase Agreements and a fully executed copy of the Intercreditor
Agreement, each in form and substance acceptable to the Agent and the
Lenders.
(n) Evidence of Termination. Evidence of the termination
of the commitments of the lenders under, the payment in full of all
obligations under and where applicable all liens securing each of (i)
the $25,000,000 revolving credit facility in favor of Group and
Industries, (ii) the Bank of Scotland facility in favor of Whitlenge
and (iii) the Continental Bank facility in favor of Delfield.
(o) IRB Facility Letter of Credit. The IRB Facility Letter
of Credit shall have been issued concurrently herewith in substitution
for the letter of credit previously issued by PNC Bank, N.A.
(p) Other. Such other documents as the Agent, any Lender
or their counsel may have reasonably requested.
4.2. Each Future Advance and Facility Letter of Credit Issuance.
The Lenders shall not be required to make any Advance or issue any
Facility Letter of Credit unless on the applicable Borrowing Date:
(a) There exists no Default or Unmatured Default and none
would result from such Advance or Facility Letter of Credit;
(b) The representations and warranties contained in Article
V are true and correct in all material respects as of such
Borrowing Date;
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(c) A Borrowing Notice or Notice of Issuance, as
applicable, shall have been properly submitted;
(d) Such Advance to a Borrower which is a Foreign
Subsidiary would not cause a violation of the Foreign Transfer
Cap; and
(e) All legal matters incident to the making of such
Advance or issuance of such Facility Letter of Credit shall be
reasonably satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance and
Notice of Issuance with respect to each such Facility Letter of Credit
shall constitute a representation and warranty by the applicable
Borrower that the conditions contained in Section 4.2 have been
satisfied. Any Lender may require a duly completed compliance
certificate in substantially the form of Exhibit D hereto as a
condition to making an Advance or issuing a Facility Letter of Credit.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
Each Borrower represents and warrants to the Lenders that, both
before and after giving effect to the Closing Transactions (except,
with respect to Sections 5.8, 5.9, 5.10, 5.17, 5.18 and 5.23, only
after giving effect thereto):
5.1. Existence and Standing. Each of Industries and each
Domestic Subsidiary which is a corporation is a corporation duly
incorporated, validly existing and in good standing under the laws of
its respective jurisdiction of incorporation and is duly qualified and
in good standing as a foreign corporation and is duly authorized to
conduct its business in each jurisdiction in which its business is
conducted or proposed to be conducted and where the failure to be so
qualified or authorized could reasonably be expected to have a
Material Adverse Effect. Each Foreign Subsidiary and each Domestic
Subsidiary which is a Person other than a corporation is a Person duly
formed, validly existing and in good standing under the laws of its
jurisdiction of formation and is duly qualified and in good standing
and is duly authorized to conduct its business in each United States
jurisdiction in which its business is conducted or proposed to be
conducted and where the failure to be so qualified or authorized could
reasonably be expected to have a Material Adverse Effect.
5.2. Authorization and Validity. Industries and each Subsidiary
have all requisite power and authority (corporate and otherwise) and
legal right to execute and deliver (or file, as the case may be) each
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of the Loan Documents and the other Transaction Documents to which it
is a party and to perform its obligations thereunder. The execution
and delivery (or filing, as the case may be) by Industries and each
Subsidiary of the Loan Documents and the other Transaction Documents
to which it is a party and the performance of their respective
obligations thereunder have been duly authorized by proper proceedings
(corporate and otherwise) and the Loan Documents and the other
Transaction Documents constitute legal, valid and binding obligations
of Industries or such Subsidiary, as applicable, enforceable against
Industries or such Subsidiary, as applicable, in accordance with their
terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally and general principles of equity.
5.3. Compliance with Laws and Contracts. Industries and its
Subsidiaries have complied in all material respects with all
applicable statutes, rules, regulations, orders and restrictions of
any domestic or foreign government or any instrumentality or agency
thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective properties, except
where the failure to so comply could not reasonably be expected to
have a Material Adverse Effect. Except as disclosed on Schedule 5.3,
neither the execution and delivery by Industries and each Subsidiary
of the Loan Documents and the other Transaction Documents to which it
is a party, the application of the proceeds of the Loans, the
consummation of the Closing Transactions or any other transaction
contemplated in the Loan Documents or the other Transaction Documents,
nor compliance with the provisions of the Loan Documents or the other
Transaction Documents will, or at the relevant time did, (a) violate
any law, rule, regulation, order, writ, judgment, injunction, decree
or award binding on Industries or any Subsidiary or Industries' or any
Subsidiary's charter, articles or certificate of incorporation or by-
laws, (b) violate the provisions of or require the approval or consent
of any party to any indenture, instrument or agreement to which
Industries or any Subsidiary is a party or is subject, or by which it,
or its property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien (other
than Liens permitted by the Loan Documents) in, of or on the property
of Industries or any Subsidiary pursuant to the terms of any such
indenture, instrument or agreement, or (c) require any consent of the
stockholders of any Person, except for approvals or consents which
will be obtained on or before the initial Advance and are disclosed on
Schedule 5.3, except for any violation of, or failure to obtain an
approval or consent required under, any such indenture, instrument or
agreement that could not reasonably be expected to have a Material
Adverse Effect.
5.4. Governmental Consents. Except as disclosed on Schedule 5.4,
no order, consent, approval, qualification, license, authorization, or
validation of, or filing, recording or registration with, or exemption
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by, or other action in respect of, any court, governmental or public
body or authority, or any subdivision thereof, any securities exchange
or other Person is or at the relevant time was required to authorize,
or is or at the relevant time was required in connection with the
execution, delivery, consummation or performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan
Documents or the Transaction Documents, the application of the
proceeds of the Loans or the consummation of the Acquisition, the
Merger or any other transaction contemplated in the Loan Documents or
the Transaction Documents. Neither Industries nor any Subsidiary is
in default under or in violation of any foreign, federal, state or
local law, rule, regulation, order, writ, judgment, injunction, decree
or award binding upon or applicable to Industries or such Subsidiary,
in each case the consequences of which default or violation could
reasonably be expected to have a Material Adverse Effect. The waiting
period with respect to each of the Acquisition and the Merger under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
has expired.
5.5. Financial Statements. Industries has heretofore furnished
to each of the Lenders (a) the audited consolidated financial
statements of Industries and its Subsidiaries for the Fiscal Year
ended January 2, 1994 and (b) the audited consolidated financial
statements of DFC for the years ended December 31, 1993 and December
31, 1992 (collectively, the "Financial Statements"), together with the
audited consolidated financial statements of Whitlenge Acquisition for
the year ended September 30, 1993 and for the six-month period ended
September 30, 1992 (the "Whitlenge Financial Statements"). The pro
forma balance sheet and related profit and loss statement (the "Pro
Forma") of Industries and its Subsidiaries on a consolidated basis as
of January 2, 1994 is attached hereto as Schedule 5.5. As of the date
of this Agreement, the Pro Forma fairly presents Industries' and the
Subsidiaries' assets, liabilities, financial condition and results of
operations on a consolidated basis in accordance with Agreement
Accounting Principles, consistently applied, and taking into account
the Closing Transactions and the other transactions and actions
contemplated by this Agreement, the Loan Documents and the Transaction
Documents. Each of the Financial Statements was prepared in
accordance with Agreement Accounting Principles and fairly presents
the consolidated financial condition and operations of Industries and
its Subsidiaries or DFC and its Subsidiaries, as applicable, at such
dates and the consolidated results of their operations for the
respective periods then ended (except, in the case of such unaudited
statements, for normal year-end audit adjustments). Except as
disclosed in the notes thereto, the Whitlenge Financial Statements
have been prepared in accordance with the requirements of all relevant
statutes and with generally accepted accounting principles and
practices in the United Kingdom consistently applied and fairly
present the consolidated financial condition and operation of
-51-<PAGE>
Whitlenge Acquisition and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.
5.6. Material Adverse Change. No material adverse change in the
business, Property, condition (financial or otherwise), performance or
results of operations of Industries and its Subsidiaries, taken as a
whole, has occurred since January 2, 1994.
5.7. Taxes. Industries and its Subsidiaries have filed or caused
to be filed on a timely basis and in correct form all United States
federal and applicable foreign, state and local tax returns and all
other tax returns which are required to be filed and have paid all
taxes due pursuant to said returns or pursuant to any assessment
received by Industries or any Subsidiary, except (a) such taxes, if
any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting
Principles and as to which no Lien exists and (b) where the failure to
do so could not reasonably be expected to have a Material Adverse
Effect. As of the date hereof, (x) the United States income tax
returns of Industries on a consolidated basis have been audited by the
Internal Revenue Service through Fiscal Year 1985 and (y) with respect
to periods after the date on which the shares of common stock of
Industries were distributed to the holders of common stock of
Household International, Inc., there are no material pending audits or
investigations regarding Industries' or its Subsidiaries' federal,
foreign, state or local tax returns. No tax liens have been filed and
no claims are pending or, to the knowledge of Industries or any
Subsidiary, threatened, with respect to any such taxes which could
reasonably be expected to have a Material Adverse Effect. The
charges, accruals and reserves on the books of Industries and its
Subsidiaries in respect of any taxes or other governmental charges are
in accordance with Agreement Accounting Principles.
5.8. Litigation and Contingent Obligations. There is no
litigation, arbitration, proceeding, inquiry or governmental
investigation (including, without limitation, by the Federal Trade
Commission) pending or, to the knowledge of any of their officers,
threatened against or directly affecting Industries or any Subsidiary
or any of their respective properties (a) which could reasonably be
expected to have a Material Adverse Effect or to prevent, enjoin or
unduly delay the making of the Loans or Advances under this Agreement
or (b) which otherwise exists as of the date hereof and which relates
to a dollar amount in question of more than $100,000, except (i) any
such matter involving either (A) workers compensation or personal
injury matters which occur in the ordinary course of business or (B) a
product liability claim, as to which, in each such case, Industries or
the applicable Subsidiary is fully insured (except as to the payment
of any required deductible), and (ii) as set forth on Schedule 5.8.
As of the date hereof, neither Industries nor any Subsidiary has any
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Contingent Obligation relating to an amount in excess of $1,000,000
except as set forth on Schedule 5.8.
5.9. Capitalization. Schedule 5.9 hereto contains (a) an
accurate description of Industries' capitalization as of a date which
is on or about March 31, 1994 and (b) an accurate list of all of the
existing Subsidiaries as of the date of this Agreement, setting forth
their respective jurisdictions of incorporation or formation and the
percentage of their capital stock owned by Industries or other
Subsidiaries. All of the issued and outstanding shares of capital
stock of Industries and of each Subsidiary have been duly authorized
and validly issued and are fully paid and non-assessable, and all such
shares of each Domestic Subsidiary are free and clear of all Liens.
As of the date hereof, neither Industries nor any Subsidiary is
subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock or any
convertible securities, rights or options, except as otherwise set
forth on Schedule 5.9.
5.10. ERISA. As of the date hereof, except as disclosed on
Schedule 5.10, (a) neither Industries nor any other member of the
Controlled Group maintains a Single Employer Plan, (b) no Single
Employer Plan has any Unfunded Liability, and (c) neither Industries
nor any other member of the Controlled Group maintains, or is
obligated to contribute to, any Multiemployer Plan or has incurred, or
is reasonably expected to incur, any withdrawal liability to any
Multiemployer Plan. Each Plan complies with all applicable
requirements of law and regulations, except where the failure to so
comply could not reasonably be expected to have a Material Adverse
Effect. Neither Industries nor any member of the Controlled Group
has, with respect to any Plan, failed to make any contribution or pay
any amount required under Section 412 of the IRC or Section 302 of
ERISA or the terms of such Plan. There are no pending or, to the
knowledge of Industries or any Subsidiary, threatened claims, actions,
investigations or lawsuits against any Plan, any fiduciary thereof, or
Industries or any member of the Controlled Group with respect to a
Plan, except for such which could not reasonably be expected to have a
Material Adverse Effect. As of the date hereof, neither Industries
nor any member of the Controlled Group has engaged in any prohibited
transaction (as defined in Section 4975 of the Code or Section 406 of
ERISA) in connection with any Plan which would subject any such Person
to any liability which could reasonably be expected to have a Material
Adverse Effect. As of the date hereof, except as disclosed on
Schedule 5.10, within the last five years neither Industries nor any
member of the Controlled Group has engaged in a transaction which
resulted in a Single Employer Plan with an Unfunded Liability being
transferred out of the Controlled Group. As of the date hereof, no
Termination Event has occurred or is reasonably expected to occur with
respect to any Plan which is subject to Title IV of ERISA.
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5.11. Defaults. No Default or Unmatured Default has occurred and
is continuing.
5.12. Federal Reserve Regulations. Neither Industries nor any
Subsidiary is engaged, directly or indirectly, principally, or as one
of its important activities, in the business of extending, or
arranging for the extension of, credit for the purpose of purchasing
or carrying Margin Stock. No part of the proceeds of any Loan will be
used in a manner which would violate, or result in a violation of,
Regulation G, Regulation U or Regulation X. Neither the making of any
Advance hereunder, the use of the proceeds thereof, nor any other
aspect of the financing of the Acquisition and the Merger will violate
or be inconsistent with the provisions of Regulation G, Regulation U
or Regulation X. Following the application of the proceeds of the
initial Advance, less than 25% of the value (as determined by any
reasonable method) of the assets of Industries and its Subsidiaries
which are subject to any limitation on sale, pledge, or other
restriction hereunder taken as a whole have been, and will continue to
be, represented by Margin Stock.
5.13. Investment Company. Neither Industries nor any Subsidiary
is, or after giving effect to any Advance will be, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
5.14. Certain Fees. Each Borrower hereby agrees to indemnify the
Agent and the Lenders against and agrees that it will hold each of
them harmless from any claim, demand or liability for broker's or
finder's fees or commissions alleged to have been incurred by
Industries or any Subsidiary in connection with any of the
transactions (including, without limitation, the Acquisition and the
Merger) contemplated by this Agreement or the Transaction Documents
and any expenses (including, without limitation, reasonable attorneys'
fees and time charges of attorneys for the Agent or any Lender, which
attorneys may be employees of the Agent or any Lender) arising in
connection with any such claim, demand or liability.
5.15. Representations and Warranties Incorporated From Purchase
Agreement and Merger Agreement. Industries has delivered to the
Lenders complete and correct copies of the Purchase Agreement and the
Merger Agreement and each of the representations and warranties given
by Industries or any Subsidiary in the Purchase Agreement and the
Merger Agreement is true and correct in all material aspects as of the
date hereof.
5.16. Solvency. As of the date hereof, after giving effect to
the consummation of the transactions contemplated by the Loan
Documents and the Transaction Documents and the payment of all fees,
costs and expenses payable by Industries and its Subsidiaries with
respect to the transactions contemplated by the Loan Documents and the
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Transaction Documents, each of Industries and each Subsidiary is
Solvent.
5.17. Ownership of Properties. As of the date hereof, except as
set forth on Schedule 5.17(a) hereto, Industries and its Subsidiaries
have a subsisting leasehold interest in, or good and marketable title,
free of all Liens, other than those permitted by Section 6.16 or by
any of the other Loan Documents, to all of the properties and assets
reflected in the Financial Statements as being owned by it, except for
assets sold, transferred or otherwise disposed of in the ordinary
course of business since the date thereof. To the knowledge of
Industries and each Subsidiary, there are no actual, threatened or
alleged defaults with respect to any leases of real property under
which Industries or any Subsidiary is lessee or lessor which could
reasonably be expected to have a Material Adverse Effect. Except as
set forth on Schedule 5.17(b), Industries and its Subsidiaries own or
possess rights to use all material licenses, patents, patent
applications, copyrights, service marks, trademarks and trade names
necessary to continue to conduct their business as heretofore
conducted, and no such license, patent or trademark, the loss of the
rights to or use of which could reasonably be expected to have a
Material Adverse Effect, has been declared invalid, been limited by
order of any court or by agreement or is the subject of any
infringement, interference or similar proceeding or challenge. As of
the date hereof, (a) Whitlenge Acquisition owns no material assets
other than the stock of Whitlenge and (b) Whitlenge N.V. owns no
assets other than those incidental to its conduct of a trade office in
Belgium.
5.18. Indebtedness. Attached hereto as Schedule 5.18 is a
complete and correct list of all Indebtedness of Industries and its
Subsidiaries outstanding as of the date of this Agreement (other than
Indebtedness in a principal amount not exceeding $100,000 for a single
item of Indebtedness and $500,000 in the aggregate for all such
Indebtedness listed and other than the Obligations), showing the
aggregate principal amount which was outstanding on such date after
giving effect to the making of the Loans.
5.19. Employee Controversies. There are no strikes, work
stoppages or controversies pending or, to the knowledge of Industries
or any Subsidiary, threatened between Industries or any Subsidiary and
any of its employees, other than employee grievances arising in the
ordinary course of business, which, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
5.20. Material Agreements. Neither Industries nor any Subsidiary
is a party to any agreement or instrument or subject to any charter or
other corporate restriction which could reasonably be expected to have
a Material Adverse Effect. Neither Industries nor any Subsidiary is
in default in the performance, observance or fulfillment of any of the
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obligations, covenants or conditions contained in any agreement to
which it is a party, which default could reasonably be expected to
have a Material Adverse Effect.
5.21. Acquisition and Merger Documents. Industries has delivered
to each of the Lenders true, complete and correct copies of the
Acquisition Documents and the Merger Documents (including all
schedules, exhibits, annexes, amendments, supplements and
modifications thereto). The Acquisition Documents and the Merger
Documents as originally executed and delivered by the parties thereto
have not been amended, supplemented or modified without the consent of
the Required Lenders. As of the date hereof, neither Industries nor
any other party thereto is in default in the performance of or
compliance with any provisions thereof. The Acquisition is being
consummated in accordance with applicable laws and regulations
contemporaneously with the initial Advance. The Merger Documents are
in form and substance satisfactory for effecting the Merger pursuant
to such agreements under the laws of the State of Delaware, all
required Merger Documents have been filed with the Secretary of State
of the State of Delaware, and the Merger is being effected
contemporaneously with the initial Advance in accordance with the laws
of the State of Delaware.
5.22. Environmental Laws. Except as set forth on Schedule 5.22,
there are no claims, investigations, litigation, administrative
proceedings, notices, requests for information, pending or, to the
knowledge of Industries or any Subsidiary, threatened, or judgments or
orders asserting violations of applicable federal, state and local
environmental, health and safety statutes, regulations, ordinances,
codes, rules, orders, decrees, directives and standards
("Environmental Laws") or relating to any toxic or hazardous waste,
substance or chemical or any pollutant, contaminant, chemical or other
substance defined or regulated pursuant to any Environmental Law,
including, without limitation, asbestos, petroleum, crude oil or any
fraction thereof ("Hazardous Materials") asserted against Industries
or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect. Neither Industries nor any Subsidiary has
caused or permitted any Hazardous Materials to be released, either on
or under real property, currently or, to the knowledge of Industries
or any Subsidiary, formerly, legally or beneficially owned or operated
by Industries or any Subsidiary or on or under real property to which
Industries or any of its Subsidiaries transported, arranged for the
transport or disposal of, or disposed of Hazardous Materials that in
any such event could reasonably be expected to have a Material Adverse
Effect. Except as disclosed on Schedule 5.22, no real property
currently or, to the knowledge of Industries or any Subsidiary,
formerly owned or operated by Industries or any Subsidiary has ever
been used as a dump or disposal site or as a treatment or storage site
for Hazardous Materials where such use could reasonably be expected to
have a Material Adverse Effect. Except as disclosed on Schedule 5.22,
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Industries and each of its Subsidiaries have obtained and are in
compliance with all permits, certificates, licenses, approvals and
other authorizations ("Environmental Permits") required for the
operation of their business and have filed all required notifications
or reports relating to chemical substances, air emissions, effluent
discharges and the storage, treatment, transport and disposal of
Hazardous Materials except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect. No asbestos
containing materials, polychlorinated biphenyls or underground storage
tanks are or have been located in, on or under real property owned or
operated by Industries or any of its Subsidiaries (to the knowledge of
Industries and each Subsidiary with respect to any period prior to
such Person's ownership of such real property) except those which
could not reasonably be expected to have a Material Adverse Effect.
There are no Liens arising under any Environmental Law which have
attached to real property owned or operated by Industries or any of
its Subsidiaries and, to the knowledge of Industries and each
Subsidiary, there is no threat to so attach any such Liens thereto.
Industries and its Subsidiaries do not have liabilities in the
aggregate for all of them with respect to compliance with applicable
Environmental Laws and Environmental Permits or related to the
generation, treatment, storage, disposal, release, investigation or
cleanup of Hazardous Materials that could reasonably be expected to
have a Material Adverse Effect, and no facts or circumstances exist
which could give rise to such liabilities with respect to compliance
with applicable Environmental Laws and Environmental Permits and the
generation, treatment, storage, disposal, release, investigation or
cleanup of Hazardous Materials. Neither the compliance by any such
Person with applicable Environmental Laws and Environmental Permits
nor the generation, treatment, storage, disposal, release,
investigation or cleanup of Hazardous Materials will affect the
operation and production of Industries and its Subsidiaries in a
manner which could reasonably be expected to have a Material Adverse
Effect.
5.23. Insurance. As of the date hereof, Schedule 5.23 completely
and accurately summarizes the property and casualty insurance in
existence and carried by Industries and its Subsidiaries, and such
insurance is adequate to protect Industries and its Subsidiaries. The
summary on Schedule 5.23 includes the insurer's or insurers' name(s),
policy number(s), expiration date(s), amount(s) of coverage, type(s)
of coverage, exclusion(s), and deductibles. This summary also
includes similar information, and describes any reserves, relating to
any self-insurance program that is in effect.
5.24. Disclosure. None of the (a) information, exhibits or
reports furnished or to be furnished by Industries or any Subsidiary
(other than any Person which became a Subsidiary upon the consummation
of the Closing Transactions) to the Agent or to any Lender in
connection with the negotiation of the Loan Documents, or (b)
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representations or warranties of Industries or any such Subsidiary
contained in this Agreement, the other Loan Documents, the Transaction
Documents or any other document, certificate or written statement
furnished to the Agent or the Lenders by or on behalf of Industries or
any such Subsidiary for use in connection with the transactions
contemplated by this Agreement or the Transaction Documents, as the
case may be, contained, contains or will contain any untrue statement
of a material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements contained herein or
therein not misleading at the time made in light of the circumstances
in which the same were made. The pro forma financial information
contained in such materials and furnished by Industries or any such
Subsidiary is based upon good faith estimates and assumptions believed
by Industries to be reasonable at the time made. There is no fact
known to Industries or any Subsidiary (except, for the purposes of
representations made as of the Closing Date, for any Person which
became a Subsidiary upon the consummation of the Closing
Transactions), other than matters of a general economic nature, that
has had or could reasonably be expected to have a Material Adverse
Effect and that has not been disclosed herein or in such other
documents, certificates and statements furnished to the Lenders for
use in connection with the transactions contemplated by this
Agreement.
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Required Lenders
shall otherwise consent in writing:
6.1. Financial Reporting. Industries will maintain, for itself
and each Subsidiary, a system of accounting established and
administered in accordance with generally accepted United States
accounting principles, consistently applied, with appropriate records
and books of account in which complete entries are to be made
reflecting its and their financial transactions, and will furnish to
the Lenders:
(a) As soon as practicable and in any event on or before
the 90th day after the close of each of its Fiscal Years (or if such
90th day is not a Business Day, the next following Business Day),
consolidated and consolidating (separated by distinguishing Whitlenge
and its Subsidiaries on a consolidated basis, DFC and its Subsidiaries
on a consolidated basis and Industries and the remaining Subsidiaries
on a consolidated basis) balance sheet of Industries and its
Subsidiaries as at the end of such Fiscal Year and the related
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consolidated and consolidating (describing information through the
line item indicating operating income) statements of income and
consolidated statement of cash flow for such Fiscal Year, in each case
setting forth in comparative form the figures for the previous Fiscal
Year, together with an audit report certified by Arthur Anderson & Co.
or other independent certified public accountants of nationally
recognized standing indicating that such audit was conducted in
accordance with generally accepted United States auditing standards
and is without qualification with respect to (i) the continuance of
each of Industries and each Subsidiary as a going concern and (ii)
departures from generally accepted United States accounting principles
other than departures which (A) are immaterial, (B) will not cause the
financial statements to fail to meet the requirements of the
Securities and Exchange Commission for financial information to be
contained or incorporated by reference in registration statements and
(C) do not cause the financial statements to fail to accurately
reflect the financial condition of Industries and its Subsidiaries on
a consolidated basis and without qualification as to scope of
examination resulting from the failure of Industries or any Subsidiary
to give access to books, records or other information and accompanied
by a certificate of such accounting firm stating that in the course of
its audit of the financial statements of Industries and its
Subsidiaries, such accounting firm has obtained no knowledge of any
Default or Unmatured Default, or if, in the opinion of such accounting
firm any Default or Unmatured Default shall exist, stating the nature
and status thereof. Group shall use its best efforts to cause such
accounting firm to deliver a letter, substantially in the form of
Exhibit E hereto, upon the delivery of each such audit report which
acknowledges that the Lenders are extending credit in primary reliance
on such financial statements and authorizes such reliance.
(b) As soon as practicable and in any event within 45 days
after the close of the first three Fiscal Quarters of each of its
Fiscal Years, for itself and its Subsidiaries, consolidated and
consolidating (separated by distinguishing Whitlenge and its
Subsidiaries on a consolidated basis, DFC and its Subsidiaries on a
consolidated basis and Industries and the remaining Subsidiaries on a
consolidated basis) unaudited balance sheets as at the close of each
such period and consolidated and consolidating (describing information
through the line item indicating operating income) income statements
and a consolidated statement of cash flows for the period from the
beginning of such Fiscal Year to the end of such Fiscal Quarter, all
certified by an Authorized Officer.
(c) At a meeting with the Lenders which shall occur not
later than the first week of April of each year, an analysis of the
financial performance of Industries and its Subsidiaries during the
previous Fiscal Year and a discussion of expected results of
operations of such entities for such Fiscal Year.
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(d) Together with the financial statements required by
clauses (a) and (b) above, a compliance certificate in substantially
the form of Exhibit D hereto signed by an Authorized Officer of
Industries showing the calculations necessary to determine compliance
with this Agreement and stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating the
nature and status thereof.
(e) As soon as possible and in any event within 10 days
after Industries or any Subsidiary knows that any Termination Event
has occurred with respect to any Plan, a statement, signed by an
Authorized Officer of Industries, describing said Termination Event
and the action which Industries or such Subsidiary proposes to take
with respect thereto.
(f) As soon as possible and in any event within 10 days
after receipt by Industries or any of its Subsidiaries, a copy of (i)
any notice, claim, complaint or order to the effect that Industries or
any of its Subsidiaries is or may be liable to any Person as a result
of the release by Industries, any of its Subsidiaries or any other
Person of any Hazardous Materials into the environment or requiring
that action be taken to respond to or clean up a Release of Hazardous
Materials into the environment, and (ii) any notice, complaint or
citation alleging any violation of any Environmental Law or
Environmental Permit by Industries or any of its Subsidiaries, which
in any case references an event described in clause (i) or (ii) above
which could reasonably be expected to have a Material Adverse Effect.
Within ten days of Industries or any Subsidiary having knowledge of
the proposal, enactment or promulgation of any Environmental Law which
could reasonably be expected to have a Material Adverse Effect,
Industries shall provide the Agent with written notice thereof.
(g) Promptly upon the furnishing thereof to the
shareholders of Industries, copies of all financial statements,
reports and proxy statements so furnished.
(h) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other
regular reports which Industries or any of its Subsidiaries files with
the Securities and Exchange Commission.
(i) Promptly and in any event within ten (10) days after
learning thereof, notification of (i) any tax assessment, demand,
notice of proposed deficiency or notice of deficiency received by
Industries or any other Consolidated Person or (ii) the filing of any
tax Lien or commencement of any judicial proceeding by or against any
such Consolidated Person, if any such assessment, demand, notice, Lien
or judicial proceeding relates to tax liabilities in excess of ten
percent (10%) of the net worth (determined according to generally
accepted accounting standards and without reduction for any reserve
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for such liabilities) of Industries and its Subsidiaries taken as a
whole.
(j) Not later than June 30 of each year, a copy of the
management summary of the actuarial valuation report prepared by the
benefits consultant or consultants to Industries and its Subsidiaries.
(k) Such other information (including non-financial
information) as the Agent or any Lender may from time to time
reasonably request.
6.2. Use of Proceeds. Industries will, and will cause each
Subsidiary to, use the proceeds of the Advances to provide funds for
the Acquisition and the Merger and the payment of related fees and
expenses, to refinance certain outstanding Indebtedness of Industries
and its Subsidiaries, to finance acquisitions to be made by Industries
and its Subsidiaries to redeem the Series B preferred stock of
Industries and the preferred stock of Whitlenge Acquisition and to
meet the working capital needs of Group and its Subsidiaries.
Industries will not, nor will it permit any Subsidiary to, use any of
the proceeds of the Advances (a) to purchase or carry any "margin
stock" (as defined in Regulation U) or (b) in connection with a
transaction that has not been approved by the board of directors (or
other governing body, if applicable) of the Person which is the
subject of such Purchase.
6.3. Notice of Default. Industries will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the
occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise (other than general economic
conditions), which could reasonably be expected to have a Material
Adverse Effect.
6.4. Conduct of Business. Industries will, and will cause each
Subsidiary to, engage in substantially the same fields of enterprise
as it is presently conducted and to do all things necessary to remain
duly organized, validly existing and in good standing in its
jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is
conducted; provided, that the existence of any Subsidiary which is not
a Borrower with outstanding Loans hereunder may be terminated if such
termination (a) is in the best interest of Industries and its
Subsidiaries, as determined in the good faith judgment of the board of
directors of Industries, and (b) could not reasonably be expected to
have a Material Adverse Effect. Neither Whitlenge Acquisition nor
Whitlenge N.V. shall engage in any activities other than those
conducted by such Person as of the date hereof or receive any assets
other than those owned by it as of the date hereof and neither
Industries nor any of its Subsidiaries shall transfer any asset to
either Whitlenge Acquisition (except in connection with the
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consummation of the Closing Transactions or the liquidation of
Whitlenge Acquisition) or Whitlenge N.V. (except as may be incidental
to the operation of a trade office in Belgium), together in each case
with up to an additional $100,000 of other assets; provided, that
assets in addition to such $100,000 limitation may be transferred to
either such Person upon the execution and delivery of a Guaranty by
such Person substantially in the form of Exhibit A-2.
6.5. Taxes. Except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect, Industries
will, and will cause each Subsidiary to, timely file complete and
correct United States federal and applicable foreign, state and local
tax returns required by applicable law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income,
profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate
reserves have been set aside.
6.6. Insurance. Industries will, and will cause each Subsidiary
to, maintain with financially sound and reputable insurance companies
insurance on all their Property in such amounts and covering such
risks as is consistent with sound business practice, and Industries
will furnish to the Agent and any Lender upon request full information
as to the insurance carried.
6.7. Compliance with Laws. Industries will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be
subject, the failure to comply with which could reasonably be expected
to have a Material Adverse Effect.
6.8. Maintenance of Properties. Industries will, and will cause
each Subsidiary to, do all things necessary to maintain, preserve,
protect and keep its Property in good repair, working order and
condition in accordance with its customary practices.
6.9. Inspection. Industries will, and will cause each Subsidiary
to, permit the Agent and the Lenders, by their respective
representatives and agents, to inspect any of the Property, corporate
books and financial records of Industries and each Subsidiary, to
examine and make copies of the books of accounts and other financial
records of Industries and each Subsidiary, and to discuss the affairs,
finances and accounts of Industries and each Subsidiary with, and to
be advised as to the same by, their respective officers at such
reasonable times and intervals as the Lenders may designate with
reasonable notice.
6.10. Capital Stock and Dividends. If a Default or an Unmatured
Default has occurred and is continuing or would occur after giving
effect thereto, Industries will not, nor will it permit any Subsidiary
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to, (a) declare or pay any dividends on its capital stock or make any
other distribution on account of its capital stock other than (i)
dividends payable in its own capital stock, (ii) dividends payable to
Group or to any Wholly-Owned Subsidiary of Group which is a Domestic
Subsidiary, and (iii) dividends payable by any Foreign Subsidiary to
any Wholly-Owned Subsidiary which is a Foreign Subsidiary or (b)
redeem, repurchase or otherwise acquire or retire any of its capital
stock (or any warrants, rights or options to acquire such capital
stock) at any time outstanding; provided, that in no event shall (x)
Group pay dividends to Industries in excess of such amount as may be
required by Industries to pay (A) dividends to its stockholders which
have previously been declared in accordance with all applicable laws
and (B) reasonable expenses in accordance with past practices, except
that Group may pay Industries any dividend required to consummate the
Closing Transactions, or (y) Industries or any Domestic Subsidiary pay
dividends to any Wholly-Owned Foreign Subsidiary which would result in
the Foreign Transfer Cap being exceeded; provided, further, that
notwithstanding clause (a) above, (1) Industries may pay any dividend
to its stockholders which has previously been declared in accordance
with all applicable laws and with clause (a) above and (2) each
Subsidiary may pay any dividend which is necessary to allow the
payment of dividends under clause (1).
6.11. Indebtedness. Industries will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness,
except:
(a) the Loans and the Obligations owing with respect to
Facility Letters of Credit;
(b) Indebtedness (including commitments therefor) existing
on the date hereof and described in Schedule 5.18 hereto;
(c) the Senior Notes and the guaranties extended in
connection therewith;
(d) Rate Hedging Obligations related to the Loans;
(e) Rate Hedging Obligations relating to other than
interest rate agreements referencing an aggregate notional amount not
to exceed $20,000,000 at any one time outstanding;
(f) extensions, renewals, refundings and refinancings of
the Indebtedness described in clauses (b) and (c) above, so long as
the aggregate principal amount of such Indebtedness after giving
effect thereto does not exceed the aggregate principal amount
outstanding as of the date hereof;
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(g) Indebtedness owing to Industries or one or more of its
Wholly-Owned Subsidiaries which has been incurred in accordance with
Section 6.15(c); and
(h) additional Indebtedness (i) which does not constitute a
Restricted Foreign Transfer, (ii) which is not described in clause (e)
above and (iii) with an aggregate principal amount outstanding not to
exceed seventeen percent (17%) of the Consolidated Tangible Assets (as
of the last day of the Fiscal Quarter immediately preceding any date
of determination) of Industries and its Subsidiaries.
6.12. Merger. Industries will not, nor will it permit any
Subsidiary to, merge or consolidate with or into or sell, assign,
lease, transfer or otherwise dispose of all or substantially all of
its assets to any other Person other than the dissolution of a
Subsidiary in accordance with Section 6.4; provided, that Industries
or any Subsidiary may enter into any merger or consolidation with or
sell all or substantially all of its assets to, a corporation
organized under the laws of any state of the United States or, with
respect to any Foreign Subsidiary, a comparable entity organized
elsewhere, so long as (a) any entity with or into which any such
Person which is a Loan Party is being merged or consolidated or to
which all or substantially all of its assets are being sold assumes
the Obligations of such Loan Party under the Loan Documents by written
instrument reasonably acceptable in form and substance to the Required
Lenders (and with respect to any Borrower, all of the Lenders), (b) no
Default or Unmatured Default has occurred and is continuing or would
occur after giving effect thereto, including without limitation any
Default or Unmatured Default under Section 7.11, (c) Group has
provided the Lenders with pro forma financial statements giving effect
thereto which evidence compliance with Section 6.25 hereof, (d) the
entity with or into which Industries or such Subsidiary is being
merged or consolidated or to which all or substantially all of the
assets of Industries or such Subsidiary are being sold is in
substantially the same or a similar type of business as Industries or
such Subsidiary and (e) such transaction is not the type of
transaction described in Section 6.2(b); provided, that the
requirements set forth in clauses (c) and (d) above need not be
satisfied in respect of any such consolidation or merger with or sale,
assignment, lease or other disposition to Industries or any
Subsidiary.
6.13. Sale of Assets. Industries will not, nor will it permit
any Subsidiary to, make an Asset Disposition of any Property, except
for (a) an Asset Disposition by Industries or Group which is permitted
under Section 6.12 and (b) Asset Dispositions of Property that,
together with all other Property previously subject to an Asset
Disposition made in accordance with this Section 6.13 since the date
hereof, does not constitute a Substantial Portion of the Property of
Industries and its Subsidiaries taken as a whole (determined as of the
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date of any proposed disposition), so long as (i) no Default or
Unmatured Default has occurred and is continuing or would occur after
giving effect thereto and (ii) with respect to each prospective Asset
Disposition involving Property which would constitute a Substantial
Portion as determined for the purposes of Section 2.7, Group has
provided the Lenders with pro forma financial statements giving effect
thereto which evidence compliance with Section 6.25 hereof; provided,
that in no event may (x) Industries or any Domestic Subsidiary make
any Asset Disposition which would result in the Foreign Transfer Cap
being exceeded or (y) Industries or any Subsidiary sell or otherwise
dispose of any Accounts, notes receivable or accounts receivable, with
or without recourse, except sales or other dispositions of such
Property to Affiliates made in accordance with Section 6.19.
6.14. Sale and Leaseback. Industries will not, nor will it
permit any Subsidiary to, sell or transfer any of its Property with a
fair market value in excess of $1,000,000 in the aggregate after the
date hereof in order to concurrently or subsequently lease as lessee
such or similar Property.
6.15. Investments and Purchases. Industries will not, nor will
it permit any Subsidiary to, make or suffer to exist any Investments
(including, without limitation, loans and advances to Industries or
any Subsidiary, and other Investments in Subsidiaries), or commitments
therefor, or to create any Subsidiary or to become or remain a partner
in any partnership or joint venture, or to make any Purchases of any
Person, except:
(a) (i) Existing Investments in Subsidiaries and (ii) other
Investments in existence on the date hereof and described in Schedule
6.15 hereto;
(b) Purchases by Industries or any Subsidiary, so long as
(i) no Default or Unmatured Default has occurred and is continuing or
would occur after giving effect thereto, (ii) Group has provided the
Lenders with pro forma financial statements giving effect thereto
which evidence compliance with Section 6.25, (iii) the entity being
acquired is in substantially the same or a similar type of business as
Industries and its Subsidiaries and (iv) such transaction is not the
type of transaction described in Section 6.2(b);
(c) Additional Investments by Industries or any of its
Subsidiaries in Industries or any Wholly-Owned Subsidiary and the
creation of new Subsidiaries by Industries or any Subsidiary;
(d) Investments in commercial paper maturing in 270 days or
less from the date of issuance which, at the time of acquisition, is
rated at least A-1 by Standard and Poor's Corporation ("S and P") or
at least P-1 by Moody's Investors Service, Inc. ("Moody's"), or the
equivalent thereof;
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(e) Investments in direct obligations of the United States
of America or, with respect to the Foreign Subsidiaries, of the
central government of the applicable jurisdiction, or any agency
thereof, maturing in twelve months or less from the date of
acquisition thereof and which are backed by the full faith and credit
of the United States of America or such other applicable jurisdiction,
as aforesaid, provided that such direct obligations of any central
government other than the United States of America or of any agency of
any central government other than the United States of America have
implied ratings of at least A-1 by S and P or P-1 by Moody's, or the
equivalent thereof, at the time of the acquisition of such obligations
by Industries or any Subsidiary;
(f) Investments in certificates of deposit maturing within
one year from the date of origin, bankers' acceptances, repurchase
agreements or other similar instruments issued by (i) any Lender or
(ii) any other bank or trust company organized under the laws of the
United States or any state thereof with capital, surplus and undivided
profits aggregating at least $100,000,000 and whose commercial paper
(or that of its parent corporation) is rated at least A-1 by S and P
or at least P-1 by Moody's, or the equivalent thereof at the time of
such Investment;
(g) Investments in certificates of deposit maturing within
one year from the date of origin, issued by a bank or trust company
organized under the laws of any jurisdiction other than that of the
United States of America or any state thereof and whose short-term
deposit rating at the time of such Investment is any of the three (3)
highest ratings then accorded by Moody's or another comparable rating
service;
(h) Temporary advances to officers and employees of
Industries or any Subsidiary for travel and other business expenses in
the ordinary course of business;
(i) Loans to officers and employees of Industries or any
Subsidiary, including but not limited to loans for relocation
expenses, in an aggregate amount not to exceed $500,000 at any one
time outstanding;
(j) Investments in the ordinary course of business made in
order to hedge the exposure of Industries or any Subsidiary to
fluctuations in foreign currencies in which Industries or any
Subsidiary has currency exposure in the ordinary course of business;
(k) Investments in demand deposit accounts maintained in
the ordinary course of business;
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(l) Investments in any fund or other pooling arrangement
which holds at least ninety percent (90%) of its assets in the
investments itemized in (d) through (g) above; and
(m) Investments not otherwise permitted by subsections (a)
through (l) of this Section 6.15 in an aggregate outstanding amount
not to exceed at any one time four percent (4%) of the Consolidated
Tangible Assets of Industries and its Subsidiaries, determined as of
the last day of the Fiscal Quarter immediately preceding any date of
determination;
so long as, in any such case (except as set forth in clause (a)), (x)
no such Investment or Purchase which constitutes a Restricted Foreign
Transfer may be made or permitted to exist if it would result in the
Foreign Transfer Cap being exceeded and (y) no Subsidiary shall make
any payment to Industries which constitutes an Investment unless such
payment is required (i) to pay any dividend permitted under clause (1)
of the second proviso of Section 6.10 or (ii) to effect any
transaction otherwise expressly permitted hereunder.
6.16. Liens. Industries will not, nor will it permit any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on
the Property of Industries or any of its Subsidiaries (including
without limitation the stock of any Subsidiary), except:
(a) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with generally accepted principles of
accounting shall have been set aside on its books;
(b) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more than
90 days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves shall have
been set aside on its books;
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the Borrower
or the Subsidiaries;
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(e) Liens existing on the date hereof and described in
Schedule 6.16 hereto and Liens arising out of any transaction
contemplated by Section 6.11(f) as long as no additional Property
becomes subject to any such replacement Lien;
(f) Liens arising under the Pledge Agreement;
(g) Liens arising under any Reimbursement Agreement; and
(h) additional Liens securing Indebtedness permitted under
Section 6.11(h).
6.17. Capital Expenditures. Industries will not, nor will it
permit any Subsidiary to, expend, or be committed to expend for
Capital Expenditures (including, without limitation, for the
acquisition of fixed assets) on a non-cumulative basis in the
aggregate for Industries and its Subsidiaries more than $7,000,000
during either of the 1994 and 1995 Fiscal Years, $8,000,000 during the
1996 Fiscal Year and $10,000,000 during any Fiscal Year thereafter.
6.18. Lease Rentals. Industries will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist obligations for
Rentals in excess of $5,000,000 during any one Fiscal Year on a
non-cumulative basis in the aggregate for Industries and its
Subsidiaries.
6.19. Affiliates. Industries will not, and will not permit any
Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or
make any payment or transfer to, any Affiliate except in the ordinary
course of business and pursuant to the reasonable requirements of
Industries' or such Subsidiary's business and upon fair and reasonable
terms no less favorable to Industries or such Subsidiary than
Industries or such Subsidiary would obtain in a comparable arms-length
transaction; provided, that Industries and each Subsidiary may enter
into any such transaction with or make any such payment or transfer to
any Wholly-Owned Subsidiary so long as any such transaction, payment
or transfer which constitutes a Restricted Foreign Transfer would not
cause the Foreign Transfer Cap to be exceeded.
6.20. Amendments to Agreements. Industries will not, and will
not permit any Subsidiary to, amend, waive or modify or terminate any
material provision of any Merger Document or Acquisition Document.
6.21. Environmental Matters. Industries shall and shall cause
each of its Subsidiaries to (a) at all times comply in all material
respects with all applicable Environmental Laws and (b) promptly take
any and all remedial actions required under applicable Environmental
Laws in response to the presence, storage, use, disposal,
transportation or Release of any Hazardous Materials on, under or
-68-<PAGE>
about any real property owned, leased or operated by Industries or any
of its Subsidiaries, except in any case where the failure to do so
could not reasonably be expected to have a Material Adverse Effect.
In the event that Industries or any Subsidiary undertakes any remedial
action with respect to any Hazardous Material on, under or about any
real property, Industries or such Subsidiary shall conduct and
complete such remedial action in material compliance with all
applicable Environmental Laws and in accordance with the applicable
policies, orders and directives of all foreign federal, state and
local governmental authorities, except when Industries' or such
Subsidiary's liability for such presence, storage, use, disposal,
transportation or Release of any Hazardous Material is being contested
in good faith by Industries or such Subsidiary and appropriate
reserves therefor have been established. If the Agent or any Lender
at any time has a reasonable basis to believe that there may be a
material violation of any Environmental Law by Industries or any of
its Subsidiaries, or any material liability arising thereunder or
related to a Release of Hazardous Materials on any real property
owned, leased or operated by Industries or any of its Subsidiaries or
a Release on real property adjacent to such real property, then
Industries shall, upon the reasonable request of the Agent, provide
the Agent with all such reports, certificates, engineering studies and
other written material or data as the Agent or any Lender may
reasonably request.
6.22. Agreements as to Prohibited Acts. Neither Industries nor
any Subsidiary shall agree or in any manner commit itself to take or
fail to take any action which, if taken or not taken, as applicable,
would constitute a breach of this Agreement.
6.23. Change in Corporate Structure; Fiscal Year. Industries
shall not, nor shall it permit any Subsidiary to, (a) permit any
amendment or modification to be made to its charter or certificate or
articles of incorporation or by-laws which could reasonably be
expected to have a Material Adverse Effect (provided that Group shall
notify the Agent of any other amendment or modification thereto as
soon as practicable thereafter) or (b) have a fiscal year which ends
on any date other than the Sunday nearest to December 31 of each year;
provided, that (x) any Person acquired by Industries or any Subsidiary
may maintain the fiscal year which it employed prior to such Purchase
(a) during such period as may be reasonably necessary to complete the
conversion of such fiscal year to a fiscal year ending on the Sunday
nearest to December 31 and (b) so long as the maintenance of such
fiscal year would not materially affect the information included in
any of the financial statements required to be delivered by Industries
pursuant hereto and (y) any Person which becomes a Subsidiary as a
result of the Closing Transactions and which has a fiscal year-end
other then that described in clause (b) above may maintain such fiscal
year-end.
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6.24. Inconsistent Agreements. Industries shall not, nor shall
it permit any Subsidiary to, enter into any indenture, agreement,
instrument or other arrangement which, (a) directly or indirectly
prohibits or restrains, or has the effect of prohibiting or
restraining, or imposes materially adverse conditions upon, the
incurrence of the Obligations, the provision of the Guaranties or the
amending of the Loan Documents or (b) contains any provision which
would be violated or breached by the making of Advances to any
Borrower which is a Domestic Subsidiary or by the performance by
Industries or any Subsidiary of any of its obligations under any Loan
Document.
6.25. Financial Covenants. Subject to normal year-end and
closing audit adjustments for calculations or determinations made in
accordance with Agreement Accounting Principles prior to the end of
its fiscal year, Industries on a consolidated basis with its
Subsidiaries shall:
6.25.1. Minimum Adjusted Consolidated Tangible Net Worth.
At all times on and after May 1, 1994, measured as of the end of
each Fiscal Quarter, maintain an Adjusted Consolidated Tangible
Net Worth equal to or greater than (a) the Adjusted Consolidated
Tangible Net Worth as of May 1, 1994 (but in no event less than
$50,000,000), minus (b) $2,000,000, plus (c) 60% of the
cumulative Net Income of Industries and its Subsidiaries for the
period beginning on May 2, 1994 and ending on the last day of the
Fiscal Quarter immediately preceding the date of measurement,
plus (d) the amount, if any, by which the Adjusted Consolidated
Tangible Net Worth is increased as a result of any issuance of
"Scotsman Earnout Shares" (as defined in the Purchase Agreement)
or "Scotsman Contingent Common Stock" (as defined in the Merger
Agreement), plus (e) 60% of the net cash proceeds received after
the date hereof by Industries or any Subsidiary from the issuance
of any equity security to any Person other than Industries or any
Subsidiary; provided, that no effect shall be given to any losses
incurred by Industries and its Subsidiaries during such period.
6.25.2. Leverage Ratio. At all times after the date
hereof, measured as of the end of each Fiscal Quarter for the
period of four Fiscal Quarters then ended, maintain a Leverage
Ratio of not more than the following during each of the following
periods:
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<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Second and Third Fiscal Quarters 1.50:1
of 1994
Fourth Fiscal Quarter of 1994 and 1.30:1
first three Fiscal Quarters of 1995
Fourth Fiscal Quarter of 1995 and first 1.10:1
three Fiscal Quarters of 1996
Fourth Fiscal Quarter of 1996 and 1.00:1
thereafter
</TABLE>
6.25.3. Interest Expense Coverage Ratio. At all times
after the date hereof, measured as of the end of each Fiscal
Quarter, maintain an Interest Expense Coverage Ratio for the
period of four Fiscal Quarters ending as of such date (provided,
that for each Fiscal Quarter in 1994, such ratio shall be
determined for the period beginning on the first day of the
second Fiscal Quarter of 1994 and ending on the last day of such
Fiscal Quarter), of not less than the following:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Fiscal Year 1994 and first two 3.75:1
Fiscal Quarters of 1995
Third Fiscal Quarter of 1995 4.00:1
Fourth Fiscal Quarter of 1995 4.25:1
Fiscal Year 1996 4.50:1
Fiscal Year 1997 and thereafter 5.00:1
</TABLE>
6.25.4. Cash Flow Coverage Ratio. At all times after the
date hereof, measured as of the end of each Fiscal Quarter,
maintain a Cash Flow Coverage Ratio for the period of four Fiscal
Quarters ending as of such date (provided, that for each Fiscal
Quarter in 1994, such ratio shall be determined, on an annualized
basis, for the period beginning on the first day of the second
Fiscal Quarter of 1994 and ending on the last day of such Fiscal
Quarter), of not less than the following:
<TABLE>
<CAPTION>
Period Ratio
------ -----
<S> <C>
Fiscal Year 1994 .17:1
First two Fiscal Quarters of 1995 .18:1
Third Fiscal Quarter of 1995 .20:1
Fourth Fiscal Quarter of 1995 and first .22:1
three Fiscal Quarters of 1996
Fourth Fiscal Quarter of 1996 and .25:1
thereafter
</TABLE>
-71-<PAGE>
6.26. Tax Consolidation. Industries will not and will not permit
any of its Subsidiaries to (a) file or consent to the filing of any
consolidated, combined or unitary income tax return with any Person
other than Industries and its Subsidiaries or (b) except for the Tax
Sharing Agreement dated as of March 15, 1989 with Household
International, Inc., enter into a tax sharing agreement or similar
arrangement with any Person that is not a Subsidiary, except in any
case as required by applicable law.
6.27. ERISA Compliance.
With respect to any Plan, neither Industries nor any
Subsidiary shall:
(a) engage in any "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) for which
a civil penalty pursuant to Section 502(i) of ERISA or a tax pursuant
to Section 4975 of the Code in excess of $1,000,000 could reasonably
be expected to be imposed;
(b) incur any "accumulated funding deficiency" (as such
term is defined in Section 302 of ERISA) in excess of $1,000,000,
whether or not waived, or permit any Unfunded Liability to exceed
$1,000,000;
(c) permit the occurrence of any Termination Event which
could reasonably be expected to result in a liability to the Borrower
or any other member of the Controlled Group in excess of $1,000,000;
(d) fail to make any contribution or payment to any
Multiemployer Plan which Industries or any other member of the
Controlled Group may be required to make under any agreement relating
to such Multiemployer Plan or any law pertaining thereto which results
in or could reasonably be expected to result in a liability in excess
of $1,000,000; or
(e) permit the establishment or amendment of any Plan or
fail to comply with the applicable provisions of ERISA and the Code
with respect to any Plan which could result in liability to Industries
or any other member of the Controlled Group which, individually or in
the aggregate, could reasonably be expected to have a Material Adverse
Effect.
6.28. Guaranties. Effective upon any Person becoming a
Subsidiary hereunder, except, with the prior written consent of the
Required Lenders, such consent not to unreasonably be withheld, for
any Subsidiary created in connection with a joint venture between
Industries or any Subsidiary and an unaffiliated third party, each
such new Subsidiary which is a Domestic Subsidiary shall execute a
Guaranty substantially in the form of Exhibit A-1 hereto and each such
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Subsidiary which is a Foreign Subsidiary shall execute a Guaranty
substantially in the form of Exhibit A-1 hereto and a revolving note
in favor of Group to be pledged pursuant to the Pledge Agreement;
provided, that if any Guarantor shall cease to be a Subsidiary as a
result of any transaction permitted hereby, then so long as no Default
shall have occurred and be continuing, such Guarantor shall be
released from its Obligations under the applicable Guaranty promptly
following the request of Group and any notes of such Guarantor pledged
for the benefit of the Lenders shall be concurrently released. In
addition, upon the request of the Agent or the Required Lenders, each
of Whitlenge Acquisition and Whitlenge N.V. shall execute a Guaranty
substantially in the form of Exhibit A-2.
ARTICLE VII
DEFAULTS
--------
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of Industries or any of its Subsidiaries to the Lenders or the
Agent under or in connection with this Agreement, any Loan, or any
certificate or other document delivered in connection with this
Agreement or any other Loan Document shall be false in any material
respect on the date as of which made.
7.2. Nonpayment of (a) principal of any Note when due, or (b)
interest upon any Note or any commitment fee or other fee or
obligations under any of the Loan Documents within five days after the
same becomes due.
7.3. The breach by any Borrower of any of the terms or provisions
of Section 6.2 or Sections 6.10 through 6.28.
7.4. The breach by any Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the
terms or provisions of this Agreement which is not remedied within
five days after written notice from the Agent or any Lender.
7.5. The default by Industries or any of its Subsidiaries in the
performance of any term, provision or condition contained in any
agreement or agreements under which any Indebtedness aggregating in
excess of $5,000,000 was created or is governed, or the occurrence of
any other event or existence of any other condition, the effect of any
of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its
stated maturity; or any such Indebtedness of Industries or any of its
-73-<PAGE>
Subsidiaries shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the
stated maturity thereof; or Industries or any of its Subsidiaries
shall become unable, not pay, or admit in writing its inability to
pay, its debts generally as they become due.
7.6. Industries or any of its Subsidiaries shall (a) have an
order for relief entered with respect to it under the Federal
bankruptcy laws as now or hereafter in effect, (b) make an assignment
for the benefit of creditors, (c) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (d) institute any proceeding seeking an order
for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file an answer or other pleading denying the material allegations
of any such proceeding filed against it, (e) take any corporate action
to authorize or effect any of the foregoing actions set forth in this
Section 7.6, or (f) fail to contest in good faith any appointment or
proceeding described in Section 7.7.
7.7. Without the application, approval or consent of Industries
or any of its Subsidiaries, a receiver, trustee, examiner, liquidator
or similar official shall be appointed for Industries or any of its
Subsidiaries or any Substantial Portion of its Property, or a
proceeding described in Section 7.6(d) shall be instituted against
Industries or any of its Subsidiaries and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for
a period of thirty consecutive days.
7.8. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Property of Industries and
its Subsidiaries without paying fair consideration therefor which,
when taken together with all other Property of Industries and its
Subsidiaries so condemned, seized, appropriated, or taken custody or
control of, during the twelve-month period ending with the month in
which any such Condemnation occurs, constitutes a Substantial Portion.
7.9. Industries or any of its Subsidiaries shall fail within
thirty days to pay, bond or otherwise discharge any judgment or order
for the payment of money in excess of $500,000 (or multiple judgments
or orders for the payment of an aggregate amount in excess of
$2,000,000), which is not stayed on appeal or otherwise being
appropriately contested in good faith.
-74-<PAGE>
7.10. Industries or any of its Subsidiaries shall be the subject
of any proceeding or investigation pertaining to the discovery of any
Hazardous Materials on the leased or owned property of Industries or
any of its Subsidiaries, the release by Industries or any of its
Subsidiaries or any other Person of any Hazardous Materials into the
environment, or any violation of any Environmental Law or
Environmental Permit, which, in either case, has had a Material
Adverse Effect.
7.11. Any Change in Control shall occur.
7.12. The occurrence of any "default", as defined in any Loan
Document (other than this Agreement or the Notes) or the breach of any
material term or provision of any Loan Document (other than this
Agreement or the Notes), which default or breach continues beyond any
period of grace therein provided.
7.13. Any Guaranty or the Pledge Agreement shall fail to remain
in full force or effect or any action shall be taken to discontinue or
to assert the invalidity or unenforceability of any Guaranty or the
Pledge Agreement, or any Guarantor shall fail to comply with any of
the terms or provisions of any Guaranty to which it is a party, or
Group shall fail to comply with any of the terms or provisions of the
Pledge Agreement or any Guarantor denies that it has any further
liability under the Guaranty to which it is a party, or gives notice
to such effect.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration. If any Default described in Section 7.6 or
7.7 occurs with respect to any Borrower, the obligations of the
Lenders to make Loans or to issue Facility Letters of Credit hereunder
shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of
the Agent or any Lender. If any other Default occurs, the Required
Lenders (or the Agent with the consent of the Required Lenders) may
terminate or suspend the obligations of the Lenders to make Loans or
to issue Facility Letters of Credit hereunder, or declare the
Obligations to be due and payable, or both, whereupon the Obligations
shall become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which each Borrower hereby
expressly waives and whether or not any beneficiary of any Facility
Letter of Credit or any transferee thereof shall have presented, or is
permitted at such time to present, the drafts and other documents
required under any Facility Letter of Credit. In addition to the
foregoing, following a Default under Section 7.2, so long as any
-75-<PAGE>
Facility Letter of Credit has not been fully drawn and has not been
cancelled or expired, upon written demand by the Agent, the Borrowers
shall deposit and maintain with the Agent an account with cash in an
amount equal to the aggregate undrawn face amount of all outstanding
Facility Letters of Credit issued by the Issuers and all fees and
other amounts due or which may become due with respect thereto. The
Borrowers shall have no control over funds in such cash deposit
account, which shall be non-interest bearing. Such funds shall be
promptly transferred by the Agent to the applicable Issuer to
reimburse it for drafts drawn under the Facility Letters of Credit.
Such funds, if any, remaining in such cash deposit account following
the payments of all Obligations in full shall be promptly paid over to
the Borrowers, subject to the terms of the Intercreditor Agreement.
If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make
Loans and issue Facility Letters of Credit hereunder as a result of
any Default (other than any Default as described in Section 7.6 or 7.7
with respect to any Borrower) and before any judgment or decree for
the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so
direct, the Agent shall, by notice to Group, rescind and annul such
acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Agent with the consent in writing of the
Required Lenders) and the Borrowers may enter into agreements
supplemental hereto for the purpose of adding or modifying any
provisions to the Loan Documents or changing in any manner the rights
of the Lenders or the Borrowers hereunder or waiving any Default
hereunder; provided, however, that no such supplemental agreement
shall, without the consent of each Lender affected thereby:
(a) Extend the final maturity of any Loan or Note or reduce
the principal amount thereof, or reduce the rate or extend the time of
payment of interest or fees thereon;
(b) Reduce the percentage specified in the definition of
Required Lenders;
(c) Reduce the amount or extend the payment date for the
mandatory payments required under Section 2.1 or 2.7, or increase the
amount of the Commitment of any Lender hereunder, or permit any
Borrower to assign its rights under this Agreement;
(d) Extend the Facility Termination Date;
(e) Amend this Section 8.2;
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(f) Release any Guarantor from a Guaranty or terminate the
Pledge Agreement or release any note pledged thereunder;
(g) Consent to any assignment by any Borrower of the
Obligations; or
(h) Increase the maximum drawable amount or extend the
expiration date of any outstanding Facility Letter of Credit (except
as expressly permitted by its terms) or reduce the principal amount of
or extend the time of payment of any Facility Letter of Credit
Reimbursement Obligation or fee associated with any Facility Letter of
Credit.
No amendment of any provision of this Agreement relating to the Agent
shall be effective without the written consent of the Agent. The
Agent may waive payment of the fee required under Section 12.3.2
without obtaining the consent of any other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders
or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the
existence of a Default or the inability of a Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall
not preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Lenders required pursuant to
Section 8.2, and then only to the extent in such writing specifically
set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent
and the Lenders until the Obligations have been paid in full.
8.4. Application of Funds. Any amounts received by the Agent or
any Lender (subject, so long as it is applicable and remains in
effect, to the terms of the Intercreditor Agreement) after a Default
has occurred and is continuing shall be applied by the Agent to
payment of the Obligations unless a court of competent jurisdiction
or, with respect to clauses (b) and (c), the Required Lenders shall
otherwise direct:
(a) FIRST, to all reasonable costs and expenses of the
Agent and the Lenders incurred in connection with the collection and
enforcement of the Obligations, together with interest at the Default
Rate on such costs, expenses and liabilities and on all advances made
by the Agent or any Lender from the date any such cost, expense or
liability is due, owing or unpaid or any such advance is made, in each
case until paid in full;
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(b) SECOND, to payment of that portion of the Obligations
constituting accrued and unpaid interest and fees, together with
interest owing thereon until paid in full;
(c) THIRD, to payment of the principal of the Obligations
and net termination amounts payable in respect of the Rate Hedging
Obligations owing to the Lenders or any Lender, together with interest
on such unpaid principal and net termination amounts until paid in
full; and
(d) FOURTH, the balance, if any, after all of the
Obligations have been satisfied, shall be remitted as required by law.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. Survival of Representations. All representations and
warranties of the Borrowers contained in this Agreement or of
Industries or any Subsidiary contained in any Loan Document shall
survive delivery of the Notes and the making of the Loans herein
contemplated.
9.2. Governmental Regulation. Anything contained in this
Agreement to the contrary notwithstanding, no Lender shall be
obligated to extend credit to any Borrower in violation of any
limitation or prohibition provided by any applicable statute or
regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation
of any of the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Borrowers, the Agent and the
Lenders and supersede all prior agreements and understandings among
the Borrowers, the Agent and the Lenders relating to the subject
matter thereof other than the fee letter dated December 22, 1993 in
favor of First Chicago.
9.5. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not
joint and no Lender shall be the partner or agent of any other (except
to the extent to which the Agent is authorized to act as such). The
failure of any Lender to perform any of its obligations hereunder
shall not relieve any other Lender from any of its obligations
hereunder. This Agreement shall not be construed so as to confer any
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right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
9.6. Expenses; Indemnification. (a) Each Borrower shall
reimburse the Agent for any reasonable costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and time
charges of attorneys for the Agent, which attorneys may be employees
of the Agent) paid or incurred by the Agent in connection with the
preparation, negotiation, execution, delivery, review, amendment,
modification, and administration of the Loan Documents. Each Borrower
also agrees to reimburse the Agent and the Lenders for any reasonable
costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Agent and the
Lenders, which attorneys may be employees of the Agent or the Lenders)
paid or incurred by the Agent or any Lender in connection with the
collection and enforcement of the Loan Documents. Each Borrower
further agrees to indemnify the Agent and each Lender, its directors,
officers and employees against all losses, injuries, claims, damages,
penalties, judgments, liabilities and expenses (including, without
limitation, all court costs, attorneys' fees, expenses of litigation
or preparation therefor whether or not the Agent or any Lender is a
party thereto) (collectively, "Indemnified Expenses") which any of
them may pay or incur arising out of or relating to this Agreement,
the other Loan Documents or the Transaction Documents, the
transactions contemplated hereby or thereby or the direct or indirect
application or proposed application of the proceeds of any Loan
hereunder, unless it is determined by a judgment of a court that is
binding on the Agent or such Lender, final and not subject to review
on appeal, that such losses were the result of acts or omissions on
the part of the Agent or such Lender, as the case may be, constituting
gross negligence, willful misconduct or knowing violations of law.
The obligations of each Borrower under this Section shall survive the
termination of this Agreement.
(b) Each Borrower shall indemnify, pay and hold the Agent and
each Lender harmless from and against any and all Indemnified Expenses
incurred or suffered by or asserted against the Agent or such Lender
by reason of any violation of any applicable Environmental Law for
which Industries or any of its Subsidiaries is liable or which is
related to any real estate owned, leased or operated by Industries or
any of its Subsidiaries, or by reason of the imposition of any
governmental lien for the recovery of environmental cleanup or
response costs expended by reason of any such violation, or by reason
of any breach of any representation, warranty or affirmative or
negative covenant of this Agreement, including, without limitation, by
reason of any matter disclosed in Schedule 5.23 hereto, unless it is
determined by a judgment of a court that is binding on the Agent or
such Lender, final and not subject to review on appeal, that such
losses were the result of acts or omissions on the part of the Agent
or such Lender, as the case may be, constituting gross negligence,
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willful misconduct or knowing violations of law; provided, however,
that, to the extent that Industries or any of its Subsidiaries is
strictly liable under any such statute, order or regulation, the
Borrowers' obligation to the Agent and each Lender under this
indemnity shall likewise be without regard to fault on the part of
Industries or any of its Subsidiaries with respect to the violation of
law which results in liability to the Agent or any Lender. The
provisions of and undertakings and indemnification set out in this
Section 9.6(b) shall survive the termination of this Agreement and the
payment and satisfaction of the Obligations, and shall continue to be
the liability, obligation and indemnification of each Borrower,
binding upon such Borrower.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of
the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement
Accounting Principles.
9.9. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in
any jurisdiction shall, as to that jurisdiction, be inoperative,
unenforceable, or invalid without affecting the remaining provisions
in that jurisdiction or the operation, enforceability, or validity of
that provision in any other jurisdiction, and to this end the
provisions of all Loan Documents are declared to be severable.
9.10. Nonliability of Lenders. The relationship between the
Borrowers and the Lenders and the Agent shall be solely that of
borrower and lender. Neither the Agent nor any Lender shall have any
fiduciary responsibilities to any Borrower. Neither the Agent nor any
Lender undertakes any responsibility to any Borrower to review or
inform such Borrower of any matter in connection with any phase of
such Borrower's business or operations. Each Borrower shall rely
entirely upon its own judgment with respect to its business, and any
review, inspection or supervision of, or information supplied to any
Borrower by the Agent or the Lenders is for the protection of the
Agent and the Lenders and neither any Borrower nor any other Person is
entitled to rely thereon. Each Borrower (a) agrees that neither the
Agent nor any Lender shall have liability to such Borrower (whether
sounding in tort, contract or otherwise) for losses suffered by such
Borrower in connection with, arising out of, or in any way related to,
the transactions contemplated and the relationship established by the
Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined by a judgment of a court that is
binding on the Agent or such Lender, final and not subject to review
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on appeal, that such losses were the result of acts or omissions on
the part of the Agent or such Lender, as the case may be, constituting
gross negligence, willful misconduct or knowing violations of law, and
(b) waives, releases and agrees not to sue upon any claim against the
Agent or any Lender (whether sounding in tort, contract or otherwise)
except a claim based upon gross negligence, willful misconduct or
knowing violations of law. Whether or not such damages are related to
a claim that is subject to the waiver effected above and whether or
not such waiver is effective, neither the Agent nor any Lender shall
have any liability with respect to, and each Borrower hereby waives,
releases and agrees not to sue for, any special, indirect or
consequential damages suffered by such Borrower in connection with,
arising out of, or in any way related to the transactions contemplated
or the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is
determined by a judgment of a court that is binding on the Agent or
such Lender, as the case may be, final and not subject to review on
appeal, that such damages were the result of acts or omissions on the
part of the Agent or such Lender, as the case may be, constituting
gross negligence, willful misconduct or knowing violations of law.
9.11. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS, WITHOUT REGARD TO
CONFLICT OF LAWS PROVISIONS, OF THE STATE OF ILLINOIS, BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.12. CONSENT TO JURISDICTION. EACH BORROWER HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL
OR ILLINOIS STATE COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND EACH BORROWER
HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN
SHALL LIMIT THE RIGHT OF THE AGENT OR ANY LENDER TO BRING PROCEEDINGS
AGAINST ANY BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY ANY BORROWER AGAINST THE AGENT OR ANY LENDER OR
ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR
CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
CHICAGO, ILLINOIS; PROVIDED, THAT SUCH PROCEEDINGS MAY BE BROUGHT IN
OTHER COURTS IF JURISDICTION MAY NOT BE OBTAINED IN A COURT IN
CHICAGO, ILLINOIS.
9.13. WAIVER OF JURY TRIAL. EACH BORROWER, THE AGENT AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR
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CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
9.14. Disclosure. Each Borrower and each Lender hereby (a)
acknowledge and agree that First Chicago and/or its Affiliates from
time to time may hold other investments in, make other loans to or
have other relationships with Industries and its Subsidiaries,
including, without limitation, in connection with any interest rate
hedging instruments or agreements or swap transactions, and (b) waive
any liability of First Chicago or such Affiliate in connection with
the transaction contemplated hereby to Industries or any of its
Subsidiaries or any Lender, respectively, arising out of or resulting
from such investments, loans or relationships other than liabilities
arising out of the gross negligence, willful misconduct or knowing
violation of law by First Chicago or its Affiliates.
9.15. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Agreement by
signing any such counterpart. This Agreement shall be effective when
it has been executed by each Borrower, the Agent and the Lenders and
each party has notified the Agent by telex or telephone, that it has
taken such action.
ARTICLE X
THE AGENT
---------
10.1. Appointment. First Chicago is hereby appointed Agent
hereunder and under each other Loan Document, and each of the Lenders
authorizes the Agent to act as the agent of such Lender. The Agent
agrees to act as such upon the express conditions contained in this
Article X. The Agent shall not have a fiduciary relationship in
respect of any Lender by reason of this Agreement.
10.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by
the terms of each thereof, together with such powers as are reasonably
incidental thereto. The Agent shall have no implied duties to the
Lenders, or any obligation to the Lenders to take any action
thereunder, except any action specifically provided by the Loan
Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to any Lender
for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith
except for its or their own gross negligence or willful misconduct.
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10.4. No Responsibility for Loans, Recitals, etc. Neither the
Agent nor any of its directors, officers, agents or employees shall be
responsible for or have any duty to ascertain, inquire into, or verify
(a) any statement, warranty or representation made in connection with
any Loan Document or any borrowing hereunder, (b) the performance or
observance of any of the covenants or agreements of any obligor under
any Loan Document, (c) the satisfaction of any condition specified in
Article IV, except receipt of items required to be delivered to the
Agent and not waived at closing, or (d) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing
furnished in connection therewith.
10.5. Action on Instructions of Lenders. The Agent shall in all
cases be fully protected by the Lenders in acting, or in refraining
from acting, hereunder and under any other Loan Document in accordance
with written instructions signed by the Required Lenders, and such
instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders and on all holders of Notes.
The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata
against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute
any of its duties as Agent hereunder and under any other Loan Document
by or through employees, agents and attorneys-in-fact and shall not be
answerable to the Lenders, except as to money or securities received
by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care.
The Agent shall be entitled to advice of counsel concerning all
matters pertaining to the agency hereby created and its duties
hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed by
it to be genuine and correct and to have been signed or sent by the
proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by the Agent, which counsel may be
employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders
agree to reimburse and indemnify the Agent ratably in proportion to
their respective Commitments (a) for any amounts not reimbursed by the
Borrowers for which the Agent is entitled to reimbursement by the
Borrowers under the Loan Documents, (b) for any other expenses
incurred by the Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of
the Loan Documents, and (c) for any liabilities, obligations, losses,
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damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed
on, incurred by or asserted against the Agent in any way relating to
or arising out of the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby, or
the enforcement of any of the terms thereof or of any such other
documents; provided, that no Lender shall be liable for any of the
foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent. The obligations of the Lenders under
this Section 10.8 shall survive payment of the Obligations and
termination of this Agreement.
10.9. Rights as a Lender. In the event the Agent is a Lender,
the Agent shall have the same rights and powers hereunder and under
any other Loan Document as any Lender and may exercise the same as
though it were not the Agent, and the term "Lender" or "Lenders"
shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity.
The Agent may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan
Document, with Industries or any of its Subsidiaries in which
Industries or such Subsidiary is not restricted hereby from engaging
with any other Person. The Agent, in its individual capacity, is not
obligated to remain a Lender.
10.10. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other
Lender and based on the financial statements prepared by Industries
and such other documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement
and the other Loan Documents. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan
Documents.
10.11. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and Group, and the Agent
may be removed at any time with or without cause by written notice
received by the Agent from the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such
appointment within thirty days after the retiring Agent's giving
notice of resignation, then the retiring Agent may appoint a successor
Agent. Such successor Agent shall be a commercial bank having capital
and retained earnings of at least $50,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such
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successor Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring or removed
Agent, and the retiring or removed Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents.
After any retiring or removed Agent's resignation or removal hereunder
as Agent, the provisions of this Article X shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as the Agent hereunder and under the other
Loan Documents.
10.12. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured
Default hereunder unless the Agent has received notice from a Lender
or any Borrower referring to this Agreement describing such Default or
Unmatured Default and stating that such notice is a "notice of
default". In the event that the Agent receives such a notice, the
Agent shall give prompt notice thereof to the Lenders. Subject to the
provisions of Section 10.5, the Agent shall take any action of the
type specified in this Agreement with respect to such Default or
Unmatured Default as shall be reasonably directed by the Required
Lenders (or, if so required by Section 8.2, by all Lenders); provided,
that unless and until the Agent shall have received such directions,
the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or
Unmatured Default as the Agent shall determine is in the best
interests of the Lenders.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1. Setoff. In addition to, and without limitation of, any
rights of the Lenders under applicable law, if any Borrower becomes
insolvent, however evidenced, or any Default occurs, any and all
deposits (including all account balances, whether provisional or final
and whether or not collected or available) and any other Indebtedness
at any time held or owing by any Lender to or for the credit or
account of any Borrower may be offset and applied toward the payment
of the Obligations owing to such Lender, whether or not the
Obligations, or any part hereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Loans (other than payments
received pursuant to Sections 3.1, 3.2 or 3.4) in a greater proportion
than its pro-rata share of such Loans, such Lender agrees, if then
applicable and in effect, to apply such amount in accordance with the
terms of the Intercreditor Agreement and otherwise, promptly upon
demand, to purchase a portion of the Loans held by the other Lenders
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so that after such purchase each Lender will hold its ratable
proportion of Loans. If any Lender, whether in connection with setoff
or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in
the benefits of such collateral ratably in proportion to their Loans.
In case any such payment is disturbed by legal process, or otherwise,
appropriate further adjustments shall be made. If an amount to be
setoff is to be applied to Indebtedness of any Borrower to a Lender,
other than Indebtedness evidenced by any of the Notes held by such
Lender, such amount shall be applied ratably to such other
Indebtedness and to the Indebtedness evidenced by such Notes.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
-------------------------------------------------
12.1. Successors and Assigns. The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the
Borrowers and the Lenders and their respective successors and assigns,
except that (a) no Borrower shall have the right to assign its rights
or obligations under the Loan Documents, and (b) any assignment by any
Lender must be made in compliance with Section 12.3. Notwithstanding
clause (b) of this Section, any Lender may at any time, without the
consent of the Borrowers or the Agent, assign all or any portion of
its rights under this Agreement and its Notes to a Federal Reserve
Bank; provided, however, that no such assignment to a Federal Reserve
Bank shall release the transferor Lender from its obligations
hereunder. The Agent and the Borrowers may treat the payee of any
Note as the owner thereof for all purposes hereof unless and until
such payee complies with Section 12.3 in the case of an assignment
thereof or, in the case of any other transfer, a written notice of the
transfer is filed with the Agent and Group. Any assignee or
transferee of a Note agrees by acceptance thereof to be bound by all
the terms and provisions of the Loan Documents. 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
or assignee of such Note or of any Note or Notes issued in exchange
therefor.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in
the ordinary course of its business and in accordance with applicable
law, at any time sell to one or more banks or other entities
("Participants") participating interests in any Loan owing to such
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Lender, any Note held by such Lender, any Commitment of such Lender or
any other interest of such Lender under the Loan Documents. In the
event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such
Lender shall remain the holder of any such Note for all purposes under
the Loan Documents, all amounts payable by the Borrowers under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrowers and the Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
Each Lender shall notify Group of each sale to a Participant (other
than an Affiliate or another Lender); provided, that any failure to
give any such notice shall not give rise to any liability hereunder.
12.2.2. Voting Rights. Each Lender shall retain the sole
right to approve, without the consent of any Participant, any
amendment, modification or waiver of any provision of the Loan
Documents other than any amendment, modification or waiver which
effects any of the modifications referenced in clauses (a) through (g)
of Section 8.2.
12.2.3. Benefit of Setoff. Each Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Loan Documents; provided, that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree
to share with each Participant, and each Participant, by exercising
the right of setoff provided in Section 11.1, agrees to share with
each Lender, any amount received pursuant to the exercise of its right
of setoff, such amounts to be shared in accordance with Section 11.2
as if each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations under the
Loan Documents in an amount equal to or greater than $5,000,000. Such
assignment shall be substantially in the form of Exhibit F hereto or
in such other form as may be agreed to by the parties thereto. The
consent of Group (unless a Default shall have occurred and then be
continuing) and the Agent shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender
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or an Affiliate thereof. Such consent shall not be unreasonably
withheld.
12.3.2. Effect; Effective Date. Upon (a) delivery to the
Agent of a notice of assignment, substantially in the form attached as
Exhibit I to Exhibit F hereto (a "Notice of Assignment"), together
with any consents required by Section 12.3.1, and (b) payment of a
$2,500 fee to the Agent for processing such assignment (which fee
shall be the sole responsibility of the assigning Lender or the
Purchaser), such assignment shall become effective on the effective
date specified in such Notice of Assignment. On and after the
effective date of such assignment, (a) such Purchaser shall for all
purposes be a Lender party to this Agreement and any other Loan
Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Loan Documents, to the same extent
as if it were an original party hereto, and (b) the transferor Lender
shall be released with respect to the percentage of the Aggregate
Commitment and Loans assigned to such Purchaser without any further
consent or action by the Borrowers, the Lenders or the Agent. Upon
the consummation of any assignment to a Purchaser pursuant to this
Section 12.3.2, the transferor Lender, the Agent and the Borrowers
shall make appropriate arrangements so that replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case in
principal amounts reflecting their Commitment, as adjusted pursuant to
such assignment.
12.4. Dissemination of Information. Each Borrower authorizes
each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law
(each a "Transferee") and any prospective Transferee any and all
information in such Lender's possession concerning the
creditworthiness of the Borrower and its Subsidiaries. Each of the
Agent and each Lender agree that (a) it will keep all of the
information obtained by it from or on behalf of any Loan Party
("Information") confidential and, without Group's prior written
consent, it will not disclose any Information except (i) to its
directors, employees, auditors or counsel (collectively,
"Representatives") to whom it is necessary to show the Information,
each of which shall be informed of the confidential nature of the
Information; (ii) in any statement or testimony pursuant to a subpoena
or order by any court, governmental body or other agency asserting
jurisdiction over it, or as otherwise may be required by law (provided
that Group shall be given prior notice of the disclosure permitted by
clause (ii) unless such notice is prohibited by any subpoena, order or
law); and (iii) upon the request or demand of any regulatory agency or
authority having jurisdiction over it; and (b) it will use the
Information only for the purposes of exercising its rights and
remedies under this Agreement and the other Loan Documents.
Notwithstanding the foregoing, the restrictions contained in the
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preceding sentence shall not apply to Information which (x) is or
becomes generally available to the public other than as a result of a
disclosure by the Agent, any Lender or any of their respective
representatives; (y) becomes available to the Agent or any Lender on a
non-confidential basis from a source other than Group or another Loan
Party; or (z) was known to the Agent or a Lender on a non-confidential
basis prior to its disclosure to it by or on behalf of Group or any
other Loan Party.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of
Section 2.20.
ARTICLE XIII
NOTICES
-------
13.1. Giving Notice. Except as otherwise permitted by Section
2.15 with respect to borrowing notices, all notices and other
communications provided to any party hereto under this Agreement or
any other Loan Document shall be in writing, by facsimile, first class
U.S. mail or overnight courier and addressed or delivered to such
party at its address set forth below its signature hereto or at such
other address as may be designated by such party in a notice to the
other parties. Any notice, if mailed and properly addressed with
first class postage prepaid, return receipt requested, shall be deemed
given three (3) Business Days after deposit in the U.S. mail; any
notice, if transmitted by facsimile, shall be deemed given when
transmitted; and any notice given by overnight courier shall be deemed
given when received by the addressee. Wherever under this Agreement
or under any other Loan Document any certificate or other writing is
given by any director, officer or employee of Industries or any
Subsidiary, such certificate or other writing shall be delivered by
such director, officer or employee on behalf of Industries or such
Subsidiary in his or her capacity as a director, officer or employee
and not in his or her individual capacity.
13.2. Change of Address. Any Borrower, the Agent and any Lender
may each change the address for service of notice upon it by a notice
in writing to the other parties hereto.
[signature pages to follow]
-89-<PAGE>
IN WITNESS WHEREOF, Group, Delfield, Scotsman Drink, Whitlenge,
Frimont, Castel MAC, the Lenders and the Agent have executed this
Agreement as of the date first above written.
SCOTSMAN GROUP INC.
By: /s/ Donald D. Holmes
------------------------------
Print Name: Donald D. Holmes
------------------------
Title: Vice President-Finance
----------------------------
Address:775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Attn: Donald D. Holmes
Telecopy: (708) 634-8823
Telephone: (708) 215-4447
THE DELFIELD COMPANY
By: /s/ Donald D. Holmes
-------------------------------------
Print Name: Donald D. Holmes
------------------------
Title: Vice President
-----------------------------
Address:775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Attn: Donald D. Holmes
Telecopy: (708) 634-8823
Telephone: (708) 215-4447
-90-<PAGE>
SCOTSMAN DRINK LIMITED
By: /s/ Donald D. Holmes
-------------------------------------
Print Name: Donald D. Holmes
------------------------
Title: Vice President
-----------------------------
Address:775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Attn: Donald D. Holmes
Telecopy: (708) 634-8823
Telephone: (708) 215-4447
WHITLENGE DRINK EQUIPMENT LIMITED
By: /s/ Donald D. Holmes
-------------------------------------
Print Name: Donald D. Holmes
------------------------
Title: Director
-----------------------------
Address: 775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Attn: Donald D. Holmes
Telecopy: (708) 634-8823
Telephone: (708) 215-4447
-91-<PAGE>
FRIMONT S.P.A
By: /s/ Richard C. Osborne
-------------------------------------
Print Name: Richard C. Osborne
------------------------
Title: Director
-----------------------------
Address:775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Attn: Donald D. Holmes
Telecopy: (708) 634-8823
Telephone: (708) 215-4447
CASTEL MAC S.P.A.
By: /s/ Richard C. Osborne
-------------------------------------
Print Name: Richard C. Osborne
------------------------
Title: Director
-----------------------------
Address:775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Attn: Donald D. Holmes
Telecopy: (708) 634-8823
Telephone: (708) 215-4447
-92-<PAGE>
Commitments:
------------
$18,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Agent
By: /s/ Julia A. Bristow
-------------------------------
Print Name:Julia A. Bristow
-------------------
Title: Vice President
------------------------
Address: One First National Plaza
Chicago, Illinois 60670
Attn: Julia Bristow
Telecopy: (312) 732-1117
Telephone: (312) 732-4116
$16,000,000 CONTINENTAL BANK, N.A.
By: /s/ Marcus W. Acheson IV
--------------------------------
Print Name: Marcus W. Acheson IV
------------------------
Title: Executive Vice President
----------------------------
Address: 2850 West Golf Road
Rolling Meadows, Illinois
60008
Attn: Edmund H. Lester
Telecopy: (708) 952-1136
Telephone: (708) 952-1110
-93-<PAGE>
$16,000,000 COMERICA BANK -- ILLINOIS
By: /s/ John J. McGuire
--------------------------------
Print Name: John J. McGuire
------------------------
Title: Vice President
-----------------------------
Address: 4747 West Dempster Street
Skokie, Illinois 60076
Attn: John J. McGuire
Telecopy: (708) 933-2209
Telephone: (708) 933-2202
$15,000,000 THE BANK OF NOVA SCOTIA
(aggregate commitment for
The Bank of Nova Scotia and
Scotiabank (UK) Limited) By: /s/ F.C.H. Ashby
--------------------------------
Print Name: F.C.H. Ashby
-------------------------
Senior Manager
Title: Loan Operations
-----------------------------
Address: 600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Attn: Claude Ashby
Telecopy: (404) 888-8998
Telephone: (404) 877-1560
-94-<PAGE>
SCOTIABANK (UK) LIMITED
By: /s/ Peter Girling
---------------------------------
Print Name: Peter Girling
-------------------
Title: Manager
------------------------
Address: Scotia House
33 Finsbury Square
London EC2A 1BB
England
Attn: Peter Girling
Telecopy: (011) 44-71-826-5617
Telephone: (011) 44-71-826-5788
$15,000,000 CAISSE NATIONALE DE CREDIT AGRICOLE
By: /s/ David Bouhl
--------------------------------
Print Name: David Bouhl
------------------------
Title: Executive Vice President
-----------------------------
Address: 55 East Monroe Street
Suite 4700
Chicago, Illinois 60603
Attn: Joan Goodman
Telecopy: (312) 372-2830
Telephone: (312) 917-7454
-95-<PAGE>
$10,000,000 BANK OF SCOTLAND
By: /s/ Catherine M. Oniffrey
---------------------------------
Print Name: Catherine M. Oniffrey
---------------------
Title: Vice President
---------------------------
Address: 380 Madison Avenue
New York, New York 10017
Attn: Catherine Oniffrey
Telecopy: (212) 557-9460
Telephone: (212) 490-8030
===============
$90,000,000
-96-<PAGE>
EXHIBIT A-1
-----------
FORM OF
DOMESTIC GUARANTY
-----------------
This Guaranty is made as of the 29th day of April, 1994 by
_____________________, a ___________ (the "Guarantor"), in favor of
the Agent and the Lenders (as hereinafter defined).
R E C I T A L S:
----------------
A. Scotsman Group Inc. and the other parties named therein (the
"Borrowers"), the financial institutions named therein (the "Lenders")
and The First National Bank of Chicago, as Agent (the "Agent"), have
entered into a certain Credit Agreement dated as of the date hereof
(as from time to time modified, supplemented or amended, the "Credit
Agreement"). Each term used but not otherwise defined herein shall
have the meaning ascribed to such term by the Credit Agreement.
B. The Guarantor will receive substantial and direct benefits
from the extensions of credit contemplated by the Credit Agreement and
is entering into this Guaranty to induce the Agent and the Lenders to
enter into the Credit Agreement and extend credit to the Borrowers
thereunder.
C. The execution and delivery of this Guaranty is a condition
precedent to the obligation of the Lenders to extend credit to the
Borrowers pursuant to the Credit Agreement.
NOW THEREFORE, in consideration of the foregoing and other good
and valuable consideration and as an inducement to the Lenders to
enter into the Credit Agreement and extend credit to the Borrowers,
the Guarantor hereby agrees as follows:
1. The Guarantor hereby absolutely, irrevocably and
unconditionally guarantees prompt, full and complete payment when due,
whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of (a) the principal of and interest on the Loans
made by the Lenders to, and the Note(s) held by each Lender of, the
Borrowers and (b) all other amounts from time to time owing to the
Lenders or the Agent by the Borrowers under the Credit Agreement, the
Notes and the other Loan Documents, including without limitation any
Rate Hedging Obligations (the "Guaranteed Debt"), it being the intent
of the Guarantor that the guaranty set forth herein shall be a
guaranty of payment and not of collection. This Guaranty is a
secondary and not a primary obligation of the Guarantor in respect of<PAGE>
the Guaranteed Debt and shall in no event be construed as an original
undertaking by the Guarantor to incur primary liability for the
Guaranteed Debt.
2. The Guarantor waives notice of the acceptance of this
Guaranty and of the extension or incurrence of the Guaranteed Debt or
any part thereof. The Guarantor further waives all setoffs and
counterclaims and presentment, protest, notice, filing of claims with
a court in the event of receivership, bankruptcy or reorganization of
any Borrower, demand or action on delinquency in respect of the
Guaranteed Debt or any part thereof, including any right to require
the Agent or the Lenders to sue any Borrower, any other guarantor or
any other person obligated with respect to the Guaranteed Debt or any
part thereof, or otherwise to enforce payment thereof against any
collateral securing the Guaranteed Debt or any part thereof.
3. The Guarantor hereby agrees that, to the fullest extent
permitted by law, its obligations hereunder shall be continuing,
absolute and unconditional under any and all circumstances and not
subject to any reduction, limitation, impairment, termination, defense
(other than indefeasible payment in full), setoff, counterclaim or
recoupment whatsoever (all of which are hereby expressly waived by it
to the fullest extent permitted by law), whether by reason of any
claim of any character whatsoever, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise. The
validity and enforceability of this Guaranty shall not be impaired or
affected by any of the following: (a) any extension, modification or
renewal of, or indulgence with respect to, or substitution for, the
Guaranteed Debt or any part thereof or any agreement relating thereto
at any time; (b) any failure or omission to perfect or maintain any
lien on, or preserve rights to, any security or collateral or to
enforce any right, power or remedy with respect to the Guaranteed Debt
or any part thereof or any agreement relating thereto, or any
collateral securing the Guaranteed Debt or any part thereof; (c) any
waiver of any right, power or remedy or of any default with respect to
the Guaranteed Debt or any part thereof or any agreement relating
thereto or with respect to any collateral securing the Guaranteed Debt
or any part thereof; (d) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any collateral securing the Guaranteed Debt or any
part thereof, any other guaranties with respect to the Guaranteed Debt
or any part thereof, or any other obligations of any person or entity
with respect to the Guaranteed Debt or any part thereof; (e) the
enforceability or validity of the Guaranteed Debt or any part thereof
or the genuineness, enforceability or validity of any agreement
relating thereto or with respect to any collateral securing the
Guaranteed Debt or any part thereof; (f) the application of payments
received from any source to the payment of indebtedness other than the
Guaranteed Debt, any part thereof or amounts which are not covered by
this Guaranty even though the Lenders might lawfully have elected to
-2-<PAGE>
apply such payments to any part or all of the Guaranteed Debt or to
amounts which are not covered by this Guaranty; (g) any change of
ownership of any Borrower or the insolvency, bankruptcy or any other
change in the legal status of any Borrower; (h) any change in, or the
imposition of, any law, decree, regulation or other governmental act
which does or might impair, delay or in any way affect the validity,
enforceability or the payment when due of the Guaranteed Debt; (i) the
failure of any Borrower to maintain in full force, validity or effect
or to obtain or renew when required all governmental and other
approvals, licenses or consents required in connection with the
Guaranteed Debt or this Guaranty, or to take any other action required
in connection with the performance of all obligations pursuant to the
Guaranteed Debt or this Guaranty; (j) the existence of any claim,
setoff or other rights which the Guarantor may have at any time
against any Borrower or any other guarantor in connection herewith or
with any unrelated transaction; (k) the Lenders' election, in any case
or proceeding instituted under chapter 11 of the United States
Bankruptcy Code, of the application of section 1111(b)(2) of the
United States Bankruptcy Code; (l) any borrowing, use of cash
collateral, or grant of a security interest by any Borrower, as debtor
in possession, under section 363 or 364 of the United States
Bankruptcy Code; (m) the disallowance of all or any portion of any of
the Lenders' claims for repayment of the Guaranteed Debt under section
502 or 506 of the United States Bankruptcy Code; or (n) any other fact
or circumstance which might otherwise constitute grounds at law or
equity for the discharge or release of the Guarantor from its
obligations hereunder, all whether or not the Guarantor shall have had
notice or knowledge of any act or omission referred to in the
foregoing clauses (a) through (n) of this paragraph. It is agreed
that the Guarantor's liability hereunder is independent of any other
guaranties or other obligations at any time in effect with respect to
the Guaranteed Debt or any part thereof and that the Guarantor's
liability hereunder may be enforced regardless of the existence,
validity, enforcement or non-enforcement of any such other guaranties
or other obligations or any provision of any applicable law or
regulation purporting to prohibit payment by any Borrower of the
Guaranteed Debt in the manner agreed upon among the Agent, the Lenders
and the Borrowers. Notwithstanding the provisions of Section 3(a),
(b), (c) and (e) above, the validity and enforceability of this
Guaranty shall be subject to the express terms of any written
amendment, supplement, modification or waiver of the terms or
provisions of this Guaranty signed and delivered by the Agent on
behalf of the Lenders.
4. Credit may be granted or continued from time to time by
the Lenders to the Borrowers without notice to or authorization from
the Guarantor regardless of any Borrower's financial or other
condition at the time of any such grant or continuation. Neither the
Agent nor any Lender shall have an obligation to disclose or discuss
-3-<PAGE>
with the Guarantor its assessment of the financial condition of any
Borrower.
5. The Guarantor shall have no right of subrogation with
respect to the Guaranteed Debt and hereby waives any right to enforce
any remedy which the Agent or the Lenders now have or may hereafter
have against any Borrower, any endorser or any other guarantor of all
or any part of the Guaranteed Debt, and the Guarantor hereby waives
any benefit of, and any right to participate in, any security or
collateral given to the Agent or the Lenders to secure payment of the
Guaranteed Debt or any part thereof or any other liability of any
Borrower to the Agent or the Lenders. The Guarantor hereby releases
each Borrower from all, and agrees not to assert or enforce (whether
by or in a legal or equitable proceeding or otherwise) any, "claims"
(as defined in Section 101(4) of the United States Bankruptcy Code, as
amended), whether arising under any law, statute, governmental rule or
regulation or judicial determination or otherwise, to which the
Guarantor is or would at any time be entitled by virtue of its
obligations hereunder, any payment made pursuant thereto or the
exercise by the Agent or any Lender of its rights with respect to any
collateral for the Guaranteed Debt, including any such claims to which
the Guarantor may be entitled as a result of any right of subrogation,
exoneration or reimbursement.
6. The Guarantor authorizes the Lenders to take any action
or exercise any remedy with respect to any collateral from time to
time securing the Guaranteed Debt, which the Lenders in their sole
discretion shall determine, without notice to the Guarantor.
Notwithstanding any reference herein to any collateral securing any of
the Guaranteed Debt, it is acknowledged that, on the date hereof,
neither the Guarantor nor any of its Subsidiaries has granted, or has
any obligation to grant, any security interest in or other lien on any
of its property as security for the Guaranteed Debt.
7. In the event the Lenders in their sole discretion elect
to give notice of any action with respect to any collateral securing
the Guaranteed Debt or any part thereof, ten (10) days' written notice
mailed to the Guarantor by ordinary mail at the address shown hereon
shall be deemed reasonable notice of any matters contained in such
notice. The Guarantor consents and agrees that neither the Agent nor
the Lenders shall be under any obligation to marshall any assets in
favor of the Guarantor or against or in payment of any or all of the
Guaranteed Debt.
8. In the event that acceleration of the time for payment
of any of the Guaranteed Debt is stayed upon the insolvency,
bankruptcy or reorganization of any Borrower, or otherwise, all such
amounts shall nonetheless be payable by the Guarantor forthwith upon
demand by the Agent or the Lenders. The Guarantor further agrees
that, to the extent that any Borrower makes a payment or payments to
-4-<PAGE>
any of the Lenders on the Guaranteed Debt, or the Agent or the Lenders
receive any proceeds of collateral securing the Guaranteed Debt, which
payment or receipt of proceeds or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or
required to be returned or repaid to such Borrower, its estate,
trustee, receiver, debtor in possession or any other party, including,
without limitation, the Guarantor, under any insolvency or bankruptcy
law, state or federal law, common law or equitable cause, then to the
extent of such payment, return or repayment, the obligation or part
thereof which has been paid, reduced or satisfied by such amount shall
be reinstated and continued in full force and effect as of the date
when such initial payment, reduction or satisfaction occurred.
9. No delay on the part of the Agent or the Lenders in the
exercise of any right, power or remedy shall operate as a waiver
thereof, and no single or partial exercise by the Agent or the Lenders
of any right, power or remedy shall preclude any further exercise
thereof; nor shall any amendment, supplement, modification or waiver
of any of the terms or provisions of this Guaranty be binding upon the
Agent or the Lenders, except as expressly set forth in a writing duly
signed and delivered on the Lenders' behalf by the Agent. The failure
by the Agent or the Lenders at any time or times hereafter to require
strict performance by any Borrower or the Guarantor of any of the
provisions, warranties, terms and conditions contained in any
promissory note, security agreement, agreement, guaranty, instrument
or document now or at any time or times hereafter executed pursuant to
the terms of, or in connection with, the Credit Agreement by any
Borrower or the Guarantor and delivered to the Agent or the Lenders
shall not waive, affect or diminish any right of the Agent or the
Lenders at any time or times hereafter to demand strict performance
thereof, and such right shall not be deemed to have been waived by any
act or knowledge of the Agent or the Lenders, their agents, officers
or employees, unless such waiver is contained in an instrument in
writing duly signed and delivered on the Lenders' behalf by the Agent.
No waiver by the Agent or the Lenders of any default shall operate as
a waiver of any other default or the same default on a future
occasion, and no action by the Agent or the Lenders permitted
hereunder shall in any way affect or impair the Agent's or the
Lenders' rights or powers, or the obligations of the Guarantor under
this Guaranty. Any determination by a court of competent jurisdiction
of the amount of any Guaranteed Debt owing by the Borrowers to the
Lenders shall be conclusive and binding on the Guarantor irrespective
of whether the Guarantor was a party to the suit or action in which
such determination was made.
10. Subject to the provisions of SECTION 8, this Guaranty
shall continue in effect until the Credit Agreement has terminated,
the Guaranteed Debt has been paid in full and the other conditions of
this Guaranty have been satisfied.
-5-<PAGE>
11. In addition to and without limitation of any rights,
powers or remedies of the Agent or the Lenders under applicable law,
any time after maturity of the Guaranteed Debt, whether by
acceleration or otherwise, the Agent or the Lenders may, in their sole
discretion, with notice after the fact to the Guarantor and regardless
of the acceptance of any security or collateral for the payment
hereof, appropriate and apply toward the payment of the Guaranteed
Debt (a) any indebtedness due or to become due from any of the Lenders
to the Guarantor, and (b) any moneys, credits or other property
belonging to the Guarantor (including all account balances, whether
provisional or final and whether or not collected or available) at any
time held by or coming into the possession of any of the Agent or any
Lender whether for deposit or otherwise.
12. The Guarantor agrees to pay all costs, fees and
expenses (including reasonable attorneys' fees and time charges, which
attorneys may be employees of the Agent or a Lender) incurred by the
Agent or any Lender in collecting or enforcing the obligations of the
Guarantor under this Guaranty.
13. This Guaranty shall bind the Guarantor and its
successors and assigns and shall inure to the benefit of the Agent,
the Lenders and their successors and assigns. All references herein
to the Lenders shall for all purposes also include all Purchasers and
Participants (as such terms are defined in the Credit Agreement). All
references herein to the Borrowers shall be deemed to include its
successors and assigns including, without limitation, a receiver,
trustee or debtor in possession of or for the Borrowers.
14. THIS GUARANTY SHALL BE DEEMED TO HAVE BEEN MADE AT
CHICAGO, ILLINOIS, AND SHALL BE CONSTRUED AND THE RIGHTS AND
LIABILITIES OF THE AGENT, THE LENDERS AND THE GUARANTOR DETERMINED,
IN ACCORDANCE WITH THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF
LAWS PROVISIONS, OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. THE GUARANTOR CONSENTS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN COOK
COUNTY, ILLINOIS, WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON
IT, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MESSENGER
OR BY REGISTERED MAIL DIRECTED TO THE GUARANTOR AT THE ADDRESS
INDICATED BELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
THREE (3) DAYS AFTER THE SAME SHALL HAVE BEEN POSTED AS AFORESAID.
THE GUARANTOR WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND
ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER. NOTHING
CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF THE AGENT OR THE LENDERS TO BRING ANY ACTION OR PROCEEDING
AGAINST THE GUARANTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
-6-<PAGE>
15. EACH OF THE GUARANTOR AND, BY THEIR ACCEPTANCE HEREOF,
THE AGENT AND EACH LENDER, WAIVES TRIAL BY JURY WITH RESPECT TO
DISPUTES ARISING HEREUNDER.
16. Wherever possible, each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining
provisions of this Guaranty.
17. Except as otherwise expressly provided herein, any
notice required or desired to be served, given or delivered to any
party hereto under this Guaranty shall be in writing by telex,
facsimile, U.S. mail or overnight courier and addressed or delivered
to such party (a) if to the Agent or the Lenders, at their respective
addresses set forth in the Credit Agreement, or (b) if to the
Guarantor, at its address indicated on EXHIBIT A hereto, or to such
other address as the Agent or the Lenders or the Guarantor designates
to the Agent in writing. All notices by United States mail shall be
sent certified mail, return receipt requested. All notices hereunder
shall be effective upon delivery or refusal of receipt; provided, that
any notice transmitted by telex or facsimile shall be deemed given
when transmitted (answerback confirmed in the case of telexes).
18. All payments hereunder shall be made by the Guarantor
in the currency in which the Guaranteed Debt was borrowed (the
"Specified Currency") and in the manner and at the address (the
"Specified Place") specified in Section 2.12(a) of the Credit
Agreement for the payment of such Guaranteed Debt. Payment of the
Guaranteed Debt shall not be discharged by an amount paid in another
currency or in another place, whether pursuant to a judgment or
otherwise, to the extent that the amount so paid on conversion to the
Specified Currency and transferred to the Specified Place under normal
banking procedures does not yield the amount of the Specified Currency
at the Specified Place due hereunder. If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due
hereunder in the Specified Currency into another currency (the
"Judgment Currency"), the rate of exchange which shall be applied
shall be that at which in accordance with normal banking procedures
the Agent could purchase the Judgment Currency with that amount of the
Specified Currency on the Business Day next preceding that on which
such judgment is rendered. The obligation of the Guarantor in respect
of any such sum due from it to the Agent or any Lender hereunder (an
"Entitled Person") shall, notwithstanding the rate of exchange
actually applied in rendering such judgment, be discharged only to the
extent that on the Business Day following receipt by such Entitled
Person of any sum adjudged to be due hereunder in the Judgment
Currency, such Entitled Person may in accordance with normal banking
-7-<PAGE>
procedures purchase and transfer to the Specified Place the Specified
Currency with the amount of the Judgment Currency so adjudged to be
due; and the Guarantor, as a separate Obligation and notwithstanding
any such judgment, agrees to indemnify such Entitled Person against,
and to pay such Entitled Person on demand, in the Specified Currency,
any difference between the sum originally due to such Entitled Person
in the Specified Currency and the amount of the Specified Currency so
purchased and transferred.
19. (a) Except as otherwise required by applicable law,
all sums payable by the Guarantor whether in respect of principal,
interest, fees or otherwise shall be paid without deduction for any
present and future taxes, levies, assessments, imposts, deductions,
charges or withholdings imposed by any country, any Governmental
Agency thereof or therein, any jurisdiction from which any or all such
payments are made and any political subdivision or taxing authority
thereof or therein, excluding income and franchise taxes (and
deductions and withholdings therefor) imposed on the Agent or any
Lender (i) by the jurisdiction under the laws of which the Agent or
such Lender is organized or any Governmental Agency or taxing
authority thereof or therein, or (ii) by any jurisdiction in which the
Agent's or such Lender's Lending Installations are located or any
Governmental Agency or taxing authority thereof or therein (such
excluded taxes, deductions and withholdings, collectively, "Excluded
Taxes", and all such taxes, levies, imposts, deductions, charges and
withholdings (including Excluded Taxes), collectively, "Taxes"), which
amounts shall be paid by such Borrower as provided in SECTION 19(B).
(b) If (i) the Guarantor or any other Person is required by
law to make any deduction or withholding on account of any Tax (other
than Excluded Taxes) or other amount from any sum paid or expressed to
be payable by the Guarantor to any Lender under this Agreement; or
(ii) any party to this Agreement (or any Person on its behalf) other
than the Guarantor is required by law to make any deduction or
withholding from, or (other than on account of any Excluded Tax) any
payment on or calculated by reference to the amount of, any such sum
received or receivable by any Lender under this Agreement, then:
(w) the Guarantor shall notify the Agent of any such
requirement or any change in any such requirement as
soon as the Guarantor becomes aware of it;
(x) the Guarantor shall pay any such Tax or other amount
before the date on which penalties attached thereto
become due and payable, such payment to be made (if the
liability to pay is imposed on the Guarantor) for its
own account or (if that liability is imposed on the
Agent or any Lender) on behalf of and in the name of
that party;
-8-<PAGE>
(y) the sum payable by the Guarantor in respect of which
the relevant deduction, withholding or payment is
required shall (except, in the case of any such
payment, to the extent that the amount thereof is not
ascertainable when that sum is paid) be increased to
the extent necessary to ensure that, after the making
of that deduction, withholding or payment, that party
receives on the due date and retains (free from any
liability in respect of any such deduction, withholding
or payment) a sum equal to that which it would have
received and so retained had no such deduction,
withholding or payment been required or made; and
(z) within thirty (30) days after payment of any sum from
which the Guarantor is required by law to make any
deduction or withholding, and within thirty (30) days
after the due date of payment of any Tax or other
amount which it is required by clause (x) above to pay,
it shall deliver to the Agent all such certified
documents and other evidence as to the making of such
deduction, withholding or payment as (i) are reasonably
satisfactory to other affected parties as proof of such
deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority and
(ii) are reasonably required by any such party to
enable it to claim a tax credit with respect to such
deduction, withholding or payment.
[20. The Guarantor hereby represents and warrants that each
of the representations and warranties made by the Borrowers and set
forth in Article V of the Credit Agreement (which Article V, together
with all related definitions, is hereby incorporated by reference
herein and made a part hereof) are true and correct on and as of the
date hereof, both before and after giving effect to the Closing
Transactions (except to the extent otherwise set forth in such Section
V).
21. The Guarantor hereby agrees that during the term of
this Guaranty, unless the Required Lenders shall otherwise consent in
writing, it will, and will cause each of its Subsidiaries to, comply
with each of the covenants made by the Borrowers and set forth in
Article VI of the Credit Agreement, which Article VI (together with
all related definitions) is hereby incorporated by reference herein
and made a part hereof; provided, that any waiver of compliance with
any of such covenants granted to the Borrowers pursuant to the Credit
Agreement shall likewise constitute a waiver hereunder of compliance
by the Guarantor with such covenants.]
[NOTE: INCLUDE PREVIOUS TWO
PARAGRAPHS IN GUARANTY OF INDUSTRIES]
-9-<PAGE>
[20. It is understood that while the amount of the
Guaranteed Debt guaranteed hereby is not limited, if in any action or
proceeding involving any state, federal or foreign bankruptcy,
insolvency or other law affecting the rights of creditors generally,
this Guaranty would be held or determined to be void, invalid or
unenforceable on account of the amount of the aggregate liability
under this Guaranty, then, notwithstanding any other provision of this
Guaranty to the contrary, the aggregate amount of such liability
shall, without any further action of the Agent, the Lenders or any
other Person, be automatically limited and reduced to the highest
amount which is valid and enforceable as determined in such action or
proceeding.]
[NOTE: INCLUDE PREVIOUS PARAGRAPH IN SUBSIDIARY GUARANTIES]
[signature page to follow]
-10-<PAGE>
IN WITNESS WHEREOF, the Guarantor has entered into this Guaranty
as of the 29th day of April, 1994.
[GUARANTOR]
By:___________________________
Its:__________________________
-11-<PAGE>
EXHIBIT A TO GUARANTY
---------------------
[ADDRESS OF GUARANTOR]
-12-<PAGE>
EXHIBIT A-2
-----------
FORM OF
FOREIGN GUARANTY
----------------
This Guaranty is made as of the 29th day of April, 1994 by
_____________________, a ___________ (the "Guarantor"), in favor of
the Agent and the Lenders (as hereinafter defined).
R E C I T A L S:
----------------
A. Scotsman Group Inc. and the other parties named therein (the
"Borrowers"), the financial institutions named therein (the "Lenders")
and The First National Bank of Chicago, as Agent (the "Agent"), have
entered into a certain Credit Agreement dated as of the date hereof
(as from time to time modified, supplemented or amended, the "Credit
Agreement"). Each term used but not otherwise defined herein shall
have the meaning ascribed to such term by the Credit Agreement.
B. The Guarantor will receive substantial and direct benefits
from the extensions of credit contemplated by the Credit Agreement and
is entering into this Guaranty to induce the Agent and the Lenders to
enter into the Credit Agreement and extend credit to the Borrowers
thereunder.
C. The execution and delivery of this Guaranty is a condition
precedent to the obligation of the Lenders to extend credit to the
Borrowers pursuant to the Credit Agreement.
NOW THEREFORE, in consideration of the foregoing and other good
and valuable consideration and as an inducement to the Lenders to
enter into the Credit Agreement and extend credit to the Borrowers,
the Guarantor hereby agrees as follows:
1. The Guarantor hereby absolutely, irrevocably and
unconditionally guarantees prompt, full and complete payment when due,
whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of (a) the principal of and interest on the Loans
made by the Lenders to, and the Note(s) held by each Lender of, the
Borrowers which constitute Foreign Subsidiaries (the "Foreign
Borrowers") and (b) all other amounts from time to time owing to the
Lenders or the Agent by the Foreign Borrowers under the Credit
Agreement, the Notes and the other Loan Documents, including without
limitation any Rate Hedging Obligations (the "Guaranteed Debt"), it
being the intent of the Guarantor that the guaranty set forth herein
shall be a guaranty of payment and not of collection. This Guaranty
is a secondary and not a primary obligation of the Guarantor in
respect of the Guaranteed Debt and shall in no event be construed as<PAGE>
an original undertaking by the Guarantor to incur primary liability
for the Guaranteed Debt.
2. The Guarantor waives notice of the acceptance of this
Guaranty and of the extension or incurrence of the Guaranteed Debt or
any part thereof. The Guarantor further waives all setoffs and
counterclaims and presentment, protest, notice, filing of claims with
a court in the event of receivership, bankruptcy or reorganization of
any Borrower, demand or action on delinquency in respect of the
Guaranteed Debt or any part thereof, including any right to require
the Agent or the Lenders to sue any Borrower, any other guarantor or
any other person obligated with respect to the Guaranteed Debt or any
part thereof, or otherwise to enforce payment thereof against any
collateral securing the Guaranteed Debt or any part thereof.
3. The Guarantor hereby agrees that, to the fullest extent
permitted by law, its obligations hereunder shall be continuing,
absolute and unconditional under any and all circumstances and not
subject to any reduction, limitation, impairment, termination, defense
(other than indefeasible payment in full), setoff, counterclaim or
recoupment whatsoever (all of which are hereby expressly waived by it
to the fullest extent permitted by law), whether by reason of any
claim of any character whatsoever, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise. The
validity and enforceability of this Guaranty shall not be impaired or
affected by any of the following: (a) any extension, modification or
renewal of, or indulgence with respect to, or substitution for, the
Guaranteed Debt or any part thereof or any agreement relating thereto
at any time; (b) any failure or omission to perfect or maintain any
lien on, or preserve rights to, any security or collateral or to
enforce any right, power or remedy with respect to the Guaranteed Debt
or any part thereof or any agreement relating thereto, or any
collateral securing the Guaranteed Debt or any part thereof; (c) any
waiver of any right, power or remedy or of any default with respect to
the Guaranteed Debt or any part thereof or any agreement relating
thereto or with respect to any collateral securing the Guaranteed Debt
or any part thereof; (d) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any collateral securing the Guaranteed Debt or any
part thereof, any other guaranties with respect to the Guaranteed Debt
or any part thereof, or any other obligations of any person or entity
with respect to the Guaranteed Debt or any part thereof; (e) the
enforceability or validity of the Guaranteed Debt or any part thereof
or the genuineness, enforceability or validity of any agreement
relating thereto or with respect to any collateral securing the
Guaranteed Debt or any part thereof; (f) the application of payments
received from any source to the payment of indebtedness other than the
Guaranteed Debt, any part thereof or amounts which are not covered by
this Guaranty even though the Lenders might lawfully have elected to
apply such payments to any part or all of the Guaranteed Debt or to
-2-<PAGE>
amounts which are not covered by this Guaranty; (g) any change of
ownership of any Borrower or the insolvency, bankruptcy or any other
change in the legal status of any Borrower; (h) any change in, or the
imposition of, any law, decree, regulation or other governmental act
which does or might impair, delay or in any way affect the validity,
enforceability or the payment when due of the Guaranteed Debt; (i) the
failure of any Borrower to maintain in full force, validity or effect
or to obtain or renew when required all governmental and other
approvals, licenses or consents required in connection with the
Guaranteed Debt or this Guaranty, or to take any other action required
in connection with the performance of all obligations pursuant to the
Guaranteed Debt or this Guaranty; (j) the existence of any claim,
setoff or other rights which the Guarantor may have at any time
against any Borrower or any other guarantor in connection herewith or
with any unrelated transaction; (k) the Lenders' election, in any case
or proceeding instituted under chapter 11 of the United States
Bankruptcy Code, of the application of section 1111(b)(2) of the
United States Bankruptcy Code; (l) any borrowing, use of cash
collateral, or grant of a security interest by any Borrower, as debtor
in possession, under section 363 or 364 of the United States
Bankruptcy Code; (m) the disallowance of all or any portion of any of
the Lenders' claims for repayment of the Guaranteed Debt under section
502 or 506 of the United States Bankruptcy Code; or (n) any other fact
or circumstance which might otherwise constitute grounds at law or
equity for the discharge or release of the Guarantor from its
obligations hereunder, all whether or not the Guarantor shall have had
notice or knowledge of any act or omission referred to in the
foregoing clauses (a) through (n) of this paragraph. It is agreed
that the Guarantor's liability hereunder is independent of any other
guaranties or other obligations at any time in effect with respect to
the Guaranteed Debt or any part thereof and that the Guarantor's
liability hereunder may be enforced regardless of the existence,
validity, enforcement or non-enforcement of any such other guaranties
or other obligations or any provision of any applicable law or
regulation purporting to prohibit payment by any Borrower of the
Guaranteed Debt in the manner agreed upon among the Agent, the Lenders
and the Borrowers. Notwithstanding the provisions of Section 3(a),
(b), (c) and (e) above, the validity and enforceability of this
Guaranty shall be subject to the express terms of any written
amendment, supplement, modification or waiver of the terms or
provisions of this Guaranty signed and delivered by the Agent on
behalf of the Lenders.
4. Credit may be granted or continued from time to time by
the Lenders to the Borrowers without notice to or authorization from
the Guarantor regardless of any Borrower's financial or other
condition at the time of any such grant or continuation. Neither the
Agent nor any Lender shall have an obligation to disclose or discuss
with the Guarantor its assessment of the financial condition of any
Borrower.
-3-<PAGE>
5. The Guarantor shall have no right of subrogation with
respect to the Guaranteed Debt and hereby waives any right to enforce
any remedy which the Agent or the Lenders now have or may hereafter
have against any Borrower, any endorser or any other guarantor of all
or any part of the Guaranteed Debt, and the Guarantor hereby waives
any benefit of, and any right to participate in, any security or
collateral given to the Agent or the Lenders to secure payment of the
Guaranteed Debt or any part thereof or any other liability of any
Borrower to the Agent or the Lenders. The Guarantor hereby releases
each Borrower from all, and agrees not to assert or enforce (whether
by or in a legal or equitable proceeding or otherwise) any, "claims"
(as defined in Section 101(4) of the United States Bankruptcy Code, as
amended), whether arising under any law, statute, governmental rule or
regulation or judicial determination or otherwise, to which the
Guarantor is or would at any time be entitled by virtue of its
obligations hereunder, any payment made pursuant thereto or the
exercise by the Agent or any Lender of its rights with respect to any
collateral for the Guaranteed Debt, including any such claims to which
the Guarantor may be entitled as a result of any right of subrogation,
exoneration or reimbursement.
6. The Guarantor authorizes the Lenders to take any action
or exercise any remedy with respect to any collateral from time to
time securing the Guaranteed Debt, which the Lenders in their sole
discretion shall determine, without notice to the Guarantor.
Notwithstanding any reference herein to any collateral securing any of
the Guaranteed Debt, it is acknowledged that, on the date hereof,
neither the Guarantor nor any of its Subsidiaries has granted, or has
any obligation to grant, any security interest in or other lien on any
of its property as security for the Guaranteed Debt.
7. In the event the Lenders in their sole discretion elect
to give notice of any action with respect to any collateral securing
the Guaranteed Debt or any part thereof, ten (10) days' written notice
mailed to the Guarantor by ordinary mail at the address shown hereon
shall be deemed reasonable notice of any matters contained in such
notice. The Guarantor consents and agrees that neither the Agent nor
the Lenders shall be under any obligation to marshall any assets in
favor of the Guarantor or against or in payment of any or all of the
Guaranteed Debt.
8. In the event that acceleration of the time for payment
of any of the Guaranteed Debt is stayed upon the insolvency,
bankruptcy or reorganization of any Borrower, or otherwise, all such
amounts shall nonetheless be payable by the Guarantor forthwith upon
demand by the Agent or the Lenders. The Guarantor further agrees
that, to the extent that any Borrower makes a payment or payments to
any of the Lenders on the Guaranteed Debt, or the Agent or the Lenders
receive any proceeds of collateral securing the Guaranteed Debt, which
payment or receipt of proceeds or any part thereof is subsequently
-4-<PAGE>
invalidated, declared to be fraudulent or preferential, set aside or
required to be returned or repaid to such Borrower, its estate,
trustee, receiver, debtor in possession or any other party, including,
without limitation, the Guarantor, under any insolvency or bankruptcy
law, state or federal law, common law or equitable cause, then to the
extent of such payment, return or repayment, the obligation or part
thereof which has been paid, reduced or satisfied by such amount shall
be reinstated and continued in full force and effect as of the date
when such initial payment, reduction or satisfaction occurred.
9. No delay on the part of the Agent or the Lenders in the
exercise of any right, power or remedy shall operate as a waiver
thereof, and no single or partial exercise by the Agent or the Lenders
of any right, power or remedy shall preclude any further exercise
thereof; nor shall any amendment, supplement, modification or waiver
of any of the terms or provisions of this Guaranty be binding upon the
Agent or the Lenders, except as expressly set forth in a writing duly
signed and delivered on the Lenders' behalf by the Agent. The failure
by the Agent or the Lenders at any time or times hereafter to require
strict performance by any Borrower or the Guarantor of any of the
provisions, warranties, terms and conditions contained in any
promissory note, security agreement, agreement, guaranty, instrument
or document now or at any time or times hereafter executed pursuant to
the terms of, or in connection with, the Credit Agreement by any
Borrower or the Guarantor and delivered to the Agent or the Lenders
shall not waive, affect or diminish any right of the Agent or the
Lenders at any time or times hereafter to demand strict performance
thereof, and such right shall not be deemed to have been waived by any
act or knowledge of the Agent or the Lenders, their agents, officers
or employees, unless such waiver is contained in an instrument in
writing duly signed and delivered on the Lenders' behalf by the Agent.
No waiver by the Agent or the Lenders of any default shall operate as
a waiver of any other default or the same default on a future
occasion, and no action by the Agent or the Lenders permitted
hereunder shall in any way affect or impair the Agent's or the
Lenders' rights or powers, or the obligations of the Guarantor under
this Guaranty. Any determination by a court of competent jurisdiction
of the amount of any Guaranteed Debt owing by the Borrowers to the
Lenders shall be conclusive and binding on the Guarantor irrespective
of whether the Guarantor was a party to the suit or action in which
such determination was made.
10. Subject to the provisions of SECTION 8, this Guaranty
shall continue in effect until the Credit Agreement has terminated,
the Guaranteed Debt has been paid in full and the other conditions of
this Guaranty have been satisfied.
11. In addition to and without limitation of any rights,
powers or remedies of the Agent or the Lenders under applicable law,
any time after maturity of the Guaranteed Debt, whether by
-5-<PAGE>
acceleration or otherwise, the Agent or the Lenders may, in their sole
discretion, with notice after the fact to the Guarantor and regardless
of the acceptance of any security or collateral for the payment
hereof, appropriate and apply toward the payment of the Guaranteed
Debt (a) any indebtedness due or to become due from any of the Lenders
to the Guarantor, and (b) any moneys, credits or other property
belonging to the Guarantor (including all account balances, whether
provisional or final and whether or not collected or available) at any
time held by or coming into the possession of any of the Agent or any
Lender whether for deposit or otherwise.
12. The Guarantor agrees to pay all costs, fees and
expenses (including reasonable attorneys' fees and time charges, which
attorneys may be employees of the Agent or a Lender) incurred by the
Agent or any Lender in collecting or enforcing the obligations of the
Guarantor under this Guaranty.
13. This Guaranty shall bind the Guarantor and its
successors and assigns and shall inure to the benefit of the Agent,
the Lenders and their successors and assigns. All references herein
to the Lenders shall for all purposes also include all Purchasers and
Participants (as such terms are defined in the Credit Agreement). All
references herein to the Borrowers shall be deemed to include its
successors and assigns including, without limitation, a receiver,
trustee or debtor in possession of or for the Borrowers.
14. THIS GUARANTY SHALL BE DEEMED TO HAVE BEEN MADE AT
CHICAGO, ILLINOIS, AND SHALL BE CONSTRUED AND THE RIGHTS AND
LIABILITIES OF THE AGENT, THE LENDERS AND THE GUARANTOR DETERMINED,
IN ACCORDANCE WITH THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF
LAWS PROVISIONS, OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO
FEDERAL LAWS APPLICABLE TO NATIONAL BANKS. THE GUARANTOR CONSENTS TO
THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN COOK
COUNTY, ILLINOIS, WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON
IT, AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MESSENGER
OR BY REGISTERED MAIL DIRECTED TO THE GUARANTOR AT THE ADDRESS
INDICATED BELOW, AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED
THREE (3) DAYS AFTER THE SAME SHALL HAVE BEEN POSTED AS AFORESAID.
THE GUARANTOR WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS AND
ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED HEREUNDER. NOTHING
CONTAINED HEREIN SHALL AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE
RIGHT OF THE AGENT OR THE LENDERS TO BRING ANY ACTION OR PROCEEDING
AGAINST THE GUARANTOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER
JURISDICTION.
15. EACH OF THE GUARANTOR AND, BY THEIR ACCEPTANCE HEREOF,
THE AGENT AND EACH LENDER, WAIVES TRIAL BY JURY WITH RESPECT TO
DISPUTES ARISING HEREUNDER.
-6-<PAGE>
16. Wherever possible, each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining
provisions of this Guaranty.
17. Except as otherwise expressly provided herein, any
notice required or desired to be served, given or delivered to any
party hereto under this Guaranty shall be in writing by telex,
facsimile, U.S. mail or overnight courier and addressed or delivered
to such party (a) if to the Agent or the Lenders, at their respective
addresses set forth in the Credit Agreement, or (b) if to the
Guarantor, at its address indicated on EXHIBIT A hereto, or to such
other address as the Agent or the Lenders or the Guarantor designates
to the Agent in writing. All notices by United States mail shall be
sent certified mail, return receipt requested. All notices hereunder
shall be effective upon delivery or refusal of receipt; provided, that
any notice transmitted by telex or facsimile shall be deemed given
when transmitted (answerback confirmed in the case of telexes).
18. All payments hereunder shall be made by the Guarantor
in the currency in which the Guaranteed Debt was borrowed (the
"Specified Currency") and in the manner and at the address (the
"Specified Place") specified in Section 2.12(a) of the Credit
Agreement for the payment of such Guaranteed Debt. Payment of the
Guaranteed Debt shall not be discharged by an amount paid in another
currency or in another place, whether pursuant to a judgment or
otherwise, to the extent that the amount so paid on conversion to the
Specified Currency and transferred to the Specified Place under normal
banking procedures does not yield the amount of the Specified Currency
at the Specified Place due hereunder. If, for the purpose of
obtaining judgment in any court, it is necessary to convert a sum due
hereunder in the Specified Currency into another currency (the
"Judgment Currency"), the rate of exchange which shall be applied
shall be that at which in accordance with normal banking procedures
the Agent could purchase the Judgment Currency with that amount of the
Specified Currency on the Business Day next preceding that on which
such judgment is rendered. The obligation of the Guarantor in respect
of any such sum due from it to the Agent or any Lender hereunder (an
"Entitled Person") shall, notwithstanding the rate of exchange
actually applied in rendering such judgment, be discharged only to the
extent that on the Business Day following receipt by such Entitled
Person of any sum adjudged to be due hereunder in the Judgment
Currency, such Entitled Person may in accordance with normal banking
procedures purchase and transfer to the Specified Place the Specified
Currency with the amount of the Judgment Currency so adjudged to be
due; and the Guarantor, as a separate Obligation and notwithstanding
any such judgment, agrees to indemnify such Entitled Person against,
-7-<PAGE>
and to pay such Entitled Person on demand, in the Specified Currency,
any difference between the sum originally due to such Entitled Person
in the Specified Currency and the amount of the Specified Currency so
purchased and transferred.
19. (a) Except as otherwise required by applicable law,
all sums payable by the Guarantor whether in respect of principal,
interest, fees or otherwise shall be paid without deduction for any
present and future taxes, levies, assessments, imposts, deductions,
charges or withholdings imposed by any country, any Governmental
Agency thereof or therein, any jurisdiction from which any or all such
payments are made and any political subdivision or taxing authority
thereof or therein, excluding income and franchise taxes (and
deductions and withholdings therefor) imposed on the Agent or any
Lender (i) by the jurisdiction under the laws of which the Agent or
such Lender is organized or any Governmental Agency or taxing
authority thereof or therein, or (ii) by any jurisdiction in which the
Agent's or such Lender's Lending Installations are located or any
Governmental Agency or taxing authority thereof or therein (such
excluded taxes, deductions and withholdings, collectively, "Excluded
Taxes", and all such taxes, levies, imposts, deductions, charges and
withholdings (including Excluded Taxes), collectively, "Taxes"), which
amounts shall be paid by such Borrower as provided in SECTION 19(b).
(b) If (i) the Guarantor or any other Person is required by
law to make any deduction or withholding on account of any Tax (other
than Excluded Taxes) or other amount from any sum paid or expressed to
be payable by the Guarantor to any Lender under this Agreement; or
(ii) any party to this Agreement (or any Person on its behalf) other
than the Guarantor is required by law to make any deduction or
withholding from, or (other than on account of any Excluded Tax) any
payment on or calculated by reference to the amount of, any such sum
received or receivable by any Lender under this Agreement, then:
(w) the Guarantor shall notify the Agent of any such
requirement or any change in any such requirement as
soon as the Guarantor becomes aware of it;
(x) the Guarantor shall pay any such Tax or other amount
before the date on which penalties attached thereto
become due and payable, such payment to be made (if the
liability to pay is imposed on the Guarantor) for its
own account or (if that liability is imposed on the
Agent or any Lender) on behalf of and in the name of
that party;
(y) the sum payable by the Guarantor in respect of which
the relevant deduction, withholding or payment is
required shall (except, in the case of any such
payment, to the extent that the amount thereof is not
-8-<PAGE>
ascertainable when that sum is paid) be increased to
the extent necessary to ensure that, after the making
of that deduction, withholding or payment, that party
receives on the due date and retains (free from any
liability in respect of any such deduction, withholding
or payment) a sum equal to that which it would have
received and so retained had no such deduction,
withholding or payment been required or made; and
(z) within thirty (30) days after payment of any sum from
which the Guarantor is required by law to make any
deduction or withholding, and within thirty (30) days
after the due date of payment of any Tax or other
amount which it is required by clause (x) above to pay,
it shall deliver to the Agent all such certified
documents and other evidence as to the making of such
deduction, withholding or payment as (i) are reasonably
satisfactory to other affected parties as proof of such
deduction, withholding or payment and of the remittance
thereof to the relevant taxing or other authority and
(ii) are reasonably required by any such party to
enable it to claim a tax credit with respect to such
deduction, withholding or payment.
20. It is understood that while the amount of the
Guaranteed Debt guaranteed hereby is not limited, if in any action or
proceeding involving any state, federal or foreign bankruptcy,
insolvency or other law affecting the rights of creditors generally,
this Guaranty would be held or determined to be void, invalid or
unenforceable on account of the amount of the aggregate liability
under this Guaranty, then, notwithstanding any other provision of this
Guaranty to the contrary, the aggregate amount of such liability
shall, without any further action of the Agent, the Lenders or any
other Person, be automatically limited and reduced to the highest
amount which is valid and enforceable as determined in such action or
proceeding.
[signature page to follow]
-9-<PAGE>
IN WITNESS WHEREOF, the Guarantor has entered into this Guaranty
as of the 29th day of April, 1994.
[GUARANTOR]
By:___________________________
Its:__________________________
-10-<PAGE>
EXHIBIT A TO GUARANTY
---------------------
[ADDRESS OF GUARANTOR]
-11-<PAGE>
EXHIBIT B
FORM OF
REVOLVING CREDIT NOTE
US$____________ Dated: April __, 1994
FOR VALUE RECEIVED, the undersigned (the "Borrower") HEREBY
PROMISES TO PAY to the order of ______________________________ (the
"Lender") the principal sum of _________ Million United States Dollars
(US$___________) or, if less, the aggregate unpaid principal amount of
the Loans made by the Lender to the Borrower pursuant to Section 2.1
of the Credit Agreement (as hereinafter defined), on or before the
Facility Termination Date; together, in each case, with interest on
any and all principal amounts remaining unpaid hereunder from time to
time outstanding. Interest upon the unpaid principal amount hereof
shall accrue at the rates, shall be calculated in the manner and shall
be payable on the dates set forth in the Credit Agreement. After
maturity, whether by acceleration or otherwise, accrued interest shall
be payable upon demand. Both principal and interest shall be payable
in the applicable currency determined in accordance with the Credit
Agreement to The First National Bank of Chicago, as Agent (the
"Agent") on behalf of the Lender, at its office determined in
accordance with the Credit Agreement in immediately available funds.
The Loans made by the Lender to the Borrower pursuant to the Credit
Agreement and all payments on account of principal hereof shall be
recorded by the Lender and, prior to any transfer thereof, endorsed on
Schedule A attached hereto which is part of this Revolving Credit Note
or otherwise in accordance with its usual practices; provided,
however, that the failure to so record shall not affect the Borrower's
obligations under this Revolving Credit Note.
This Revolving Credit Note is a Note referred to in, and is
entitled to the benefits of, the Credit Agreement dated as of April
__, 1994 by and among the Borrower, the other borrowers signatory
thereto, the financial institutions signatory thereto (including the
Lender) and the Agent (as amended, modified or supplemented from time
to time, the "Credit Agreement") and the other Loan Documents.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings ascribed thereto in the Credit Agreement. The
Credit Agreement, among other things, contains provisions for
acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal hereof
prior to the maturity hereof upon the terms and conditions therein
specified.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Revolving Credit Note.<PAGE>
THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS, WITHOUT REGARD TO
CONFLICT OF LAWS PROVISIONS, OF THE STATE OF ILLINOIS BUT GIVING
EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
[Borrower]
By:________________________________
Title:_____________________________
-2-<PAGE>
SCHEDULE A
Revolving Credit Note
dated April __, 1994
payable to the order of
[Lender]
-------------------------
------------------------------------------------------------------
PRINCIPAL PAYMENTS
__________________________________________________________________
Amount of Unpaid
Principal Principal Notation
Date Borrower Repaid Balance Made by
---- -------- --------- --------- --------
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Exhibit C-1
APPLICATION FOR IRREVOCABLE STANDBY LETTER OF CREDIT
FIRST CHICAGO F.N.B.C. No_____________________
The First National Bank of Chicago (FOR BANK USE ONLY)
Import Services Unit
Mail Suite 0236
Chicago, Illinois 60670-0236 Date___________________________
Please issue an irrevocable Letter of Credit substantially as set
forth below and forward same by:
__ Airmail __Full Cable, directly to the __Return
original
beneficiary, telex number: _________ Credit to us
__ Other: ___________
_____________________
In issuing the credit you are expressly authorized to make such
changes from the terms of the application as you, in your sole
discretion, may deem advisable provided no such changes shall vary the
principal terms hereof.
______________________________________________________________________
FOR ACCOUNT OF
______________________________________________________________________
IN FAVOR OF (BENEFICIARY) AMOUNT
____________________________________________
Drafts must be presented for negotiation or
payment on or before (Expiry Date)
______________________________________________________________________
Available by drafts at sight drawn, at your option, on you or your
correspondent when accompanied by the following documents, as checked:
C __ beneficiary's signed statement, reading as follows:
H
E (quote)___________________________________________________________
C ___________________________________________________________________
K ___________________________________________________________________
___________________________________________________________________
D ___________________________________________________________________
O ___________________________________________________________________
C __________________________________________________(unquote)
U
M __ copy (ies) of commercial invoice(s)____________________________<PAGE>
E ___________________________________________________________________
N
T
S
R __ other documents________________________________________________
E
Q __ other instructions_____________________________________________
U ___________________________________________________________________
I ___________________________________________________________________
R ___________________________________________________________________
E ___________________________________________________________________
D ___________________________________________________________________
Unless otherwise instructed, documents should be forwarded to you in
one airmail.
Without limiting and in addition to the provisions, terms and
conditions set forth on the reverse hereof, you are hereby expressly
authorized and directed to honor any request for payment which is made
under and in compliance with the terms of the Credit requested by this
application without regard to, and without any duty on your part to
inquire into, the existence of any disputes or controversies between
any of the undersigned, the beneficiary of the Credit or any other
person, firm or corporation; or the respective rights, duties or
liabilities of any of them; or whether any facts or occurrences
represented in any of the documents presented under the Credit are
true or correct. Furthermore, we fully understand and agree that your
sole obligation to us shall be limited to honoring requests for
payment made under and in compliance with the terms of the Credit and
this application and your obligation remains so limited even if you
may have assisted us in the preparation of the wording of the Credit
or any documents required to be presented thereunder and even if you
may otherwise be aware of the underlying transaction giving rise to
the Credit and this application.
PLEASE DATE AND OFFICIALLY SIGN THE AGREEMENT ON THE
REVERSE SIDE OF THIS APPLICATION
Any and all attachments and/or alterations must be individually signed
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SECURITY AND REIMBURSEMENT AGREEMENT
FOR IRREVOCABLE STANDBY LETTER OF CREDIT
In consideration of your issuing a standby letter of credit (the
"Credit") substantially according to the Application appearing on the
reverse side hereof, or as attached hereto and installed by us, we,
the undersigned, hereby jointly and severally contract as follows:
1. We agree, in the case of each sight draft or drawing under
or purporting to be under the Credit in United States currency, to
reimburse you, on demand at your head office in Chicago in United
States currency, the amount paid on such drafts or drawings together
with interest thereon form the date of drawing to the date of
reimbursement; or, if so required by you, to pay you in advance at
your head office the amount required to pay such draft or drawing.
2. We agree, in the case of each sight draft or drawing under
or purporting to be under the Credit in currency other than United
States currency, to reimburse you, on demand at your head office in
Chicago, the equivalent of the amount paid, in United States currency
at the rate of exchange then current in Chicago for cable transfer to
the place of payment in the currency in which such draft is drawn, or
drawing made, such rate to be determined by you in your sole
discretion, together with interest thereon from the date of drawing to
the date of reimbursement; or, if so required by you, to pay you, at
your head office in Chicago, in advance, in United States currency,
the equivalent of the amount required to pay the same.
If, for any cause whatsoever, there exists at the time in
question no rate of exchange generally current in Chicago for
effective cable transfers of the sort above provided for, we agree to
pay you on demand an amount in United States currency equivalent to
the actual cost of settlement of your obligation to the payor of the
drawing or draft or any holder thereof, as the case may be, and
however and whenever such settlement may be made by you, including
interest on the amount of U.S. currency payable by us from the date of
payment of such draft or drawing to the date of our payment to you.
3. We agree to pay you on demand a commission on the Credit at
such rate as you may determined to be proper in the market for such
credits and to reimburse you on demand for any and all charges and
expenses which may be paid or incurred by you in connection with the
Credit (whether incurred before or after the stated expiration date of
the Credit), together with interest on any and all such amounts from
the date of demand until paid in full, including without limitation
(a) any and all out - of - pocket expenses and charges in connection
with the administration, collection, and enforcement of this Agreement
and the Credit, including attorney's fees related thereto, and (b) any
and all applicable reserve or similar requirements and any and all
premiums, assessments, or levies imposed upon you by any agency or
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instrumentality of any government, including without limitation any
Federal Deposit Insurance Corporation assessments or charges.
4. If any change in law or any government rule, regulation,
policy, guideline or directive (whether or not having the force of
law) or the interpretation thereof affects the amount of capital
required or expected to be maintained by you or any corporation
controlling you and you determine the amount of capital required is
increased by or based upon the existence of this application for
standby letters of credit or any letter of credit issued under this
application or upon agreements or letters of credit of this type, then
you may notify us of such fact. We and you shall thereafter attempt
to negotiate an adjustment to the commission payable hereunder which
will adequately compensate you in light of these circumstances. If we
and you are unable to agree to such adjustment within 30 days of the
date on which we receive such notice, then commencing on the date of
such notice (but not earlier than the effective date of any such
change) the commission payable shall increase by an amount which will,
in your sole determination, provide adequate compensation.
5. We agree to hold you and your correspondents indemnified and
harmless against any and all loss, cost, expense, liability or damage,
including attorneys fees related thereto, howsoever arising from or in
connection with the Credit. Without limiting the generality of the
foregoing, we agree to hold you indemnified and harmless for any and
all amounts adjudicated or otherwise ordered by any court or other
tribunal to be payable by you in connection with the Credit to the
beneficiary or its or their respective successors, assigns, heirs, and
legal representatives, at any time before or after the expiration of
the Credit, including without limitation the principal amount of any
and all drafts drawn under or purporting to have been drawn under the
Credit, together with any and all interest thereon and any and all
costs and expenses (including attorney's fees) incurred by you in
connection with any such adjudication, or order; except, only if, and
to the extent that any such amount shall be adjudicated or ordered to
be payable as a result of your wilful misconduct or gross negligence.
6. All interest charged by you hereunder shall be at the rate
customarily charged by you at the time in like circumstances and shall
be calculated on the basis of the actual number of days elapsed in a
360 - day year.
7. Any and all amounts which may become due and payable to you
under this Agreement shall be paid in immediately available funds
without setoff or deduction and may, in your discretion, and if not
otherwise paid, be charged by you to any available funds then held by
you for our account. If you shall require payment in advance of the
amount necessary to pay drafts drawn or drawings made under the
Credit, the funds shall be deposited in a special collateral account
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which shall be charged to reimburse you for such amounts paid by you
and drawn under or purporting to be drawn under the Credit.
[Paragraph 8 deleted.]
9. In the event of (a) any default hereunder, (b) the death,
failure in business, dissolution or termination of existence of any of
the undersigned, (c) the filing of any petition in bankruptcy by or
against any of the undersigned, (d) the commencement of any proceeding
in bankruptcy or relating to the relief of debtors for the relief or
readjustment of any indebtedness of the undersigned, either through
reorganization, composition, extension, or otherwise, (e) an
assignment of any of the undersigned for the benefit of creditors or
the utilization by any of the undersigned of any insolvency laws, (f)
the appointment of a receiver of any property of any of the
undersigned at any time, or (g) any attachment distrainment of
property of any of the undersigned which may be in, or come into, your
possession and control or that of any third party acting for you as
aforesaid, or the subjection of such property at any time to any
mandatory order of court legal process; then, or at any time after the
happening of any such event, the amount of the Credit, both drawn and
undrawn, as well as any and all other amounts payable hereunder to you
(to the extent not theretofore paid to you hereunder) shall become
immediately due and payable without demand or notice.
10. The rights which you possess hereunder shall continue
unimpaired, and the undersigned shall remain obligated in accordance
with the terms and provisions hereof, notwithstanding the release or
substitution of any property which may be held as security hereunder
at any time, or of any right or interest therein. No delay, extension
of time, renewal, compromise of your rights hereunder unless you or
your authorized agent shall have signed such waiver in writing. No
such waiver, unless expressly stated therein, shall be effective as to
any transaction which occurs subsequent to the date of such waiver or
as to any continuance of a breach after such waiver.
11. We agree that this Agreement shall not be waived, altered,
modified, or amended as to any of its terms and provisions except as
you may consent thereto in writing duly signed for on your behalf. In
the event of any extension of the maturity or time for presentation of
drafts or documents, or any other modification of the terms of the
Credit, at the request of any of us, with or without notification to
the others, or in the event of any increase in the amount of the
Credit at our request, this Agreement shall be binding upon us with
regard to the Credit so increased or otherwise modified, to drafts,
documents, and property covered thereby, and to any action taken by
you or any of your correspondents in accordance with such extension,
increase, or other modification.
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12. We agree that you, your branches, affiliates and/or
correspondents, shall not be liable or responsible in any respect for:
(a) the use which may be made of the Credit or for any acts or
omissions of the users of the Credit: (b) the validity, sufficiency,
or genuineness of documents which you have determined in good faith to
comply on their face with the terms of the Credit, even if such
documents should in fact prove to be in any or all respects invalid,
fraudulent, or forged; (c) particular conditions stipulated in the
documents or superimposed thereon; (d) any error, omission,
interruption, or delay in transmission or delivery of any one or more
messages or advices in connection with the credit whether transmitted
by mail, cable, telegraph, wireless or otherwise and despite any
cipher or code which may be employed; or (e) any action, inaction, or
omission which may be taken or suffered by you or them in good faith
or through inadvertence in identifying or failing to identify any
beneficiary(ies) or otherwise in connection with the Credit. The
happening of any one or more of the contingencies listed in this
Section shall not affect, impair or prevent, the vesting of any of
your rights or powers hereunder or our obligation to make
reimbursement.
13. We hereby certify and agree that no transactions in
connection with the Credit will be undertaken in violation of any
United States or foreign laws or regulations. If this Agreement
should be terminated or revoked as to us by operation of law, we will
indemnify and save you harmless from any loss which may be incurred by
you in acting hereunder prior to the receipt by you or your
successors, transferees, or assigns of notice in writing of such
termination or revocation.
14. The word "property" as used herein includes goods and
merchandise (as well as any and all document relative thereto),
securities, funds, monies (whether United States currency or
otherwise), choses in action and any and all other to forms of
property, whether real, person or mixed and any right of interest of
the undersigned, or any one or more of them, therein thereto.
15. If the undersigned is a corporation, it hereby represents
and warrants to you that: (a) it is duly organized and validly
existing and is duly authorized to enter into this Agreement and to
perform its obligations hereunder; and (b) the execution and delivery
of this Agreement do not, and the performance of the obligations under
this Agreement will not, violate any provisions of law, of the
certificate of incorporation or by - laws of the undersigned, or of
any agreement, indenture, note or other instrument which is binding on
the undersigned.
16. If this Agreement is signed by one party, the terms "we",
"ours", "us" shall be read throughout as "I", "my", "me" as the case
maybe. If this Agreement is signed by two or more parties, it shall
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constitute the joint and several agreement of such parties. Except as
otherwise expressly provided in this Application and agreement or as
you and we may otherwise expressly agree with regard to, and prior to
your issuance of the Credit, the "Uniform Customs and Practice for
Documentary Credits (1983 Revision), International Chamber of
Commerce, Publication 400", or such subsequent Uniform Custom and
practice as established by the International Chamber of Commerce and
in effect at the time of reference thereto (hereinafter referred to as
the "UCP"), shall be deemed a part hereof as fully as if incorporated
herein, shall be binding on the Credit and shall serve, in the absence
of proof expressly to the contrary, as evidence of general banking
usage.
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17. This Agreement shall become effective upon your receipt
thereof and shall be governed in all respects, except to the extent
such laws are inconsistent with the UCP, by the laws of the State of
Illinois. United States of America, and shall be binding upon the
undersigned and its, his or her or their respective successors,
assigns, heirs, and legal representatives. No assignment or other
transfer of all or any of the rights of the undersigned hereunder,
whether with regard to any property or otherwise, may be made without
your prior consent in writing.
Very truly yours,
__________________________________________________
Company or individual Name (Applicant/Obligor)
__________________________________________________
Official Signature and Title
Address:__________________________________________
Street
__________________________________________________
City State Zip
__________________________________________________
Contact Party Telephone
Commissions will be debited to the Demand Deposit Account of the
Applicant/Obligor unless otherwise agreed,
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______________________________________________________________________
FOR BANK USE ONLY: Liabilities outstanding: Approved by:
Import Contingent _________________ _________________________
Standby Contingent ________________ _________________________
Signature of Relationship
Acceptances _______________________ Manager with authority to
initial notes for this
Total ________________________ Applicant/Obligor
Credit Responsibility:
MAS No. _________________
Group Name_______________
______________________________________________________________________
IF THE LETTER OF CREDIT IS SECURED BY A SEGREGATED CASH DEPOSIT
TO BE DEBITED TO THE CUSTOMER'S ACCOUNT AT ISSUANCE. PLEASE
CHECK __
______________________________________________________________________
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Exhibit C-2
FIRST CHICAGO
The First National Bank of Chicago
APPLICATION FOR IRREVOCABLE COMMERCIAL LETTER OF CREDIT
Import Services Unit F.N.B.C. No. _____________________
Mail Suite 0236 (For Bank Use Only)
Chicago, Illinois 60670-0236 Date__________________________
Please issue an irrevocable Letter of Credit substantially as set
forth below and forward same by:
__Airmail __Full Cable, directly to the __Full Cable, for delivery to
beneficiary, the beneficiary by the
telex number: _________ advising bank
__Return original Other: ___________
Credit to us__ _____________________
In issuing the credit you are expressly authorized to make such
changes from the terms of the application as you, in your sole
discretion, may deem advisable provided no such changes shall vary the
principal terms hereof.
______________________________________________________________________
FOR ACCOUNT OF
______________________________________________________________________
IN FAVOR OF (BENEFICIARY) AMOUNT
______________________________________
Drafts must be presented for Negotiation
or to Drawee on or before (Expiry Date)
______________________________________________________________________
Shipment from: Latest Shipping Date_________
___ Partial Shipments Prohibited
___ Transshipments Prohibited
To:
______________________________________________________________________
___ Documents must be presented to negotiating or paying bank within
____________ days after the date of issuance of documents evidencing
shipment or dispatch or taken in charge (shipping documents) but
within validity of letter of credit.
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Available by drafts___________________________________________________
drawn, at your option, on you or your correspondent
for____________________________________% of the invoice value.
Discount charges are for ___ Applicant ___Beneficiary. Banking
charges other than FNBC are for ___ Applicant ___ Beneficiary.
When accompanied by the following documents, as checked:
C [111] __ Commercial Invoice [110] __ Packing List
H [112] __ Customs Invoice
E [890] __ Marine and War Risk
C Insurance Policy and/or Certificate
K _______________________________________________
(Indicate Special Instructions for Insurance,
D if any)
O __ Certificate of Origin
C [912] __ GSP Certificate of Origin Form A
U __ Other Documents_______________________________________
M _________________________________________________________________
E _________________________________________________________________
N _________________________________________________________________
T _________________________________________________________________
S
__ Full Set of Clean On Board Original Ocean Bills of Lading (if
R more than one original has been issued all are required)
E Issued to order of:______________________________________________
Q
U Marked Freight: Collect/Paid and Notify: _______________________
I _________________________________________________________________
R
E __ Air Waybill Consigned to: ____________________________________
D Marked Freight: Collect/Paid and Notify: _______________________
COVERING: Merchandise described in the invoice as: (Mention
commodity only in generic terms omitting details as to grade, quality,
etc.
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Check one: Terms __ EX FACTORY __ FAS __FOB __C&F __ CIF
__ C&I
[113] __ Insurance effected by applicant. Applicant agrees to
keep insurance coverage in force until this transaction
is completed.
[886] __ Please instruct the negotiating or Drawee Bank to
forward one set of negotiable documents to
__ Customs House Broker __ Applicant
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______________________________________________________________________
Other instructions: __ L/C is transferable __ Combined shipment
permitted
Unless otherwise instructed, documents shall be forwarded to you in
one airmail
Without limiting and in addition to the provisions, terms and
conditions set forth on the reverse hereof, you are hereby expressly
authorized and directed to honor any request for payment which is made
under and in compliance with the terms of the Credit requested by this
application without regard to, and without any duty on your part to
inquire into, the existence of any disputes or controversies between
any of the undersigned, the beneficiary of the Credit or any other
person, firm or corporation; or the respective rights, duties or
liabilities of any of them; or whether any facts or occurrences
represented in any of the documents presented under the Credit are
true or correct. Furthermore, we fully understand and agree that your
sole obligation to us shall be limited to honoring requests for
payment under and in compliance with the terms of the Credit and this
application and your obligation remains so limited even if you may
have assisted us in the preparation of the wording of the Credit or
any documents required to be presented thereunder and even if you may
otherwise be aware of the underlying transaction giving rise to the
Credit and this application.
PLEASE DATE AND OFFICIALLY SIGN THE AGREEMENT
ON THE REVERSE SIDE OF THIS APPLICATION
Any and all attachments and/or alterations must be individually signed
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SECURITY AND REIMBURSEMENT AGREEMENT
FOR IRREVOCABLE COMMERCIAL LETTER OF CREDIT
In consideration of your issuing a commercial letter of credit
(the "Credit"), substantially according to the Application appearing
on the reverse side hereof or as attached hereto and individually
signed by us, we, the undersigned, hereby jointly and severally
contract as follows:
1. We agree: (a) in the case of each sight draft under or
purporting to be under the Credit in United States currency, to
reimburse you at your head office in Chicago on demand, in United
States currency, the amount paid on such draft, or, if so demanded by
you, to pay you at your office in advance in United States currency
the amount required to pay such draft; and (b) in the case of each
acceptance under or purporting to be under the Credit in United States
currency, to pay to you at your head office in Chicago in United
States currency the amount thereof on demand but in any event not
later than the date of maturity.
2. We agree: (a) in the case of each sight draft under or
purporting to be under the Credit in currency other than United States
currency, to reimburse you on demand at your head office in Chicago
the equivalent of the amount paid in United States currency at the
rate of exchange then current in Chicago for cable transfer to the
place of payment in the currency in which such draft is drawn,
together with interest thereon from the date of payment to the date of
reimbursement; or if so required by you, to pay you at your head
office in Chicago in advance in United States currency the equivalent
of the amount required to pay the same; and (b) in the case of each
acceptance under or purporting to be under the Credit in currency
other than United States currency, to pay you on demand at your head
office in Chicago the equivalent of the acceptance in United States
currency (i) if payment is made by us in time to reach your head
office in Chicago not later than the date of maturity, at the rate of
exchange current in Chicago at the time of transmission for cable or
wire transfer to the place of payment in the currency in which the
acceptance is payable or (ii) if payment is made at your head office
in Chicago on the maturity date, at the rate of exchange then current
in Chicago for cable or wire transfer to the place of payment in the
currency in which the acceptance is payable.
If, for any cause whatsoever, there exists at the time in
question no rate of exchange generally current in Chicago for
effective cable or wire transfers of the sort above provided for, we
agree to pay you on demand an amount in United States currency
equivalent to the actual cost of settlement of your obligation to the
payor of the draft or acceptance or any holder thereof, as the case
may be, and however and whenever such settlement may be made by you,
including interest on the amount of United States currency payable by
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us from the date of payment of such draft or drawing to the date of
our payment to you.
3. In the event that any drafts are drawn by us on you in order
to refinance any obligation set forth in the preceding two sections,
and such drafts, at your option, are accepted by you, we agree to pay
you at your head office in Chicago on demand, but in any event not
later than the maturity date, the amount of each such acceptance.
4. We agree to pay you on demand a commission on the Credit at
such rate as you may determine to be proper in the market for such
credits and to reimburse you on demand for any and all charges and
expenses which may be paid or incurred by you in connection with the
Credit (whether incurred before or after the stated expiration date of
the Credit), together with interest at the rate customarily charged by
you at the time in like circumstances on any and all such amounts from
the date of demand until paid in full, including without limitation
(a) any and all out-of-pocket expenses and charges in connection with
the administration, collection and enforcement of this Agreement and
the Credit, including attorney's fees related thereto, and (b) any and
all applicable reserve or similar requirements and any and all
premiums, assessments, or levies imposed upon you by any agency or
instrumentality of any government, including, without limitation, FDIC
assessments or charges.
5. If any change in law or any governmental rule, regulation,
policy, guideline or directive (whether or not having the force of
law) or the interpretation thereof affects the amount of capital
required or expected to be maintained by you or any corporation
controlling you and you determine the amount of capital required is
increased by or based upon the existence of this Agreement, the Credit
or the Application or upon agreements or letters of credit of similar
type, then you may notify us of such fact. We and you shall
thereafter attempt to negotiate an adjustment to the commission
payable hereunder which will adequately compensate you in light of
these circumstances. If we and you are unable to agree to such
adjustment within 30 days of the date on which we receive such notice,
then, commencing on the date of such notice (but not earlier than the
effective date of any such change), the commission payable shall
increase by an amount which will, in your sole determination, provide
adequate compensation.
6. Any and all amounts which may become due and payable to you
under this Agreement shall be paid in immediately available funds
without setoff or deduction and may, in your discretion, and if not
otherwise paid, be charged by you to any available funds then held by
you for our account.
[Paragraph 7 deleted.]
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8. In the absence of written instructions expressly to the
contrary, we agree that you or any of your correspondents may receive
and accept as a "transport document", a "bill of lading" or a "cargo
receipt" under the Credit any document issued or purporting to be
issued by or on behalf of any carrier which acknowledges receipt of
property for transportation (whatever the other specific provisions of
such document) and that the date of each such document shall be
regarded as the date of shipment of the property mentioned therein,
provided, that, with respect to an ocean bill of lading, the date of
an on board notation is to be considered the shipment date. Any
transport document issued by or on behalf of an ocean carrier may be
accepted by you as an "ocean bill of lading" whether or not the entire
transportation is by water. Unless otherwise specifically agreed in
writing, partial shipments may be made and you may honor the related
drafts, provided, that, our liability to reimburse you for payments
made or obligations incurred on such drafts is limited to the amount
of the Credit. If the Credit specifies shipments installments within
given periods and any installment is not shipped within the period
allowed for such installment, the Credit ceases to be available for
that or any subsequent installment, unless otherwise expressly
provided in the Credit. You and any of your correspondents may
receive and accept as documents of insurance under the Credit either
insurance policies or insurance certificates which need not be for an
amount of insurance greater than the amount paid by you under or
relative to the Credit. You and any of your correspondents may
receive, accept, or pay as complying with the terms of Credit, any
drafts or other documents, otherwise in order, which may be signed by,
or issued to, the administrator or executor of, or the trustee in
bankruptcy or the receiver for any of the property of, the party in
whose name it is provided in the Credit that any drafts or other
documents should be drawn or issued.
9. If, at our special request, the Credit is issued in
transferable form, it is understood and agreed that you are under no
duty to determine the proper identity of anyone appearing in the draft
of documents as transferee, nor shall you be charged with
responsibility of any nature or character for the validity or
correctness of any transfer or successive transfers, and payment by
you to any purported transferee or transferres as determined by you is
hereby authorized and approved. We further agree to hold you harmless
and indemnified against any liability or claim in connection with or
arising out of the forgoing.
If it is a condition of the Credit that payment may be made upon
receipt by you of a cable advising negotiation, we hereby agree to
reimburse you on demand for the amount indicated in such cable advice,
and further agree to hold you harmless if the documents fail to
arrive, or if, upon the arrival of the documents, you should determine
that the documents are not in order.
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10. We agree that you and your branches, affiliates and
correspondents shall not be liable or responsible in any respect for:
(a) the use which may be made of the Credit or any acts or omissions
of the users of the Credit; (b) the existence of the property
purporting to be represented by documents; (c) any difference in
character, quality, quantity, condition or value between any property
description in documents presented under the Credit and the property
purporting to be represented by such documents; (d) the validity,
sufficiency or genuineness of documents which you have determined in
good faith to comply on their face with the terms of the Credit, even
if such documents should in fact prove to be in any or all respects
invalid, fraudulent, or forged; (e) particular conditions stipulated
in the documents or superimposed thereon; (f) the time, place, manner
or order in which shipment is made; (g) partial or incomplete
shipment, or failure or omission to ship any and all of the property
referred to in the Credit; (h) the character, adequacy, validity, or
genuineness of any insurance, the solvency or responsibility of any
insurer, or any other risk connected with insurance; (i) any deviation
from instructions, delay, default, or fraud by the shipper or anyone
else in connection with the property or the shipment thereof; (j) the
solvency, responsibility, or relationship to the property of any party
issuing any documents in connection with such property; (k) any delay
in arrival or failure to arrive of the property or any of the
documents relating thereto; (l) any delay in giving or failure to give
notice of arrival or any other notice; (m) any breach of contract
between the shippers or vendors and overdraft to be accompanied by
documents at negotiation, or the failure of any person to note the
amount of any draft on the reverse of the Credit or to surrender or
take up the Credit to send forward documents apart from drafts as
required by the terms of the Credit (each of which provisions, if
contained in the Credit itself, it is agreed may be waived by you; (o)
any error, omission, interruption or delay in transmission or delivery
of any message or advice in connection with the Credit whether
transmitted by courier, mail, cable, telex, telegraph, wireless, any
other telecommunication or otherwise and despite any cipher or code
which may be employed.
The happening of any one or more of the contingencies referred to
in the preceding paragraph shall not affect, impair, or prevent the
vesting of any of your rights or powers hereunder or our obligation to
make reimbursement. In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth, we agree
that any action, inaction or omission by you or any of your branches,
affiliates or correspondents under or in connection with the Credit or
the related drafts, documents or property, if taken in good faith,
shall be binding on us and shall not put you or any of your branches,
affiliates or correspondents under any resulting liability to us. You
shall not be responsible for any act, error, neglect, default,
omission, insolvency or failure in the business of any of your
affiliates or correspondents or for any refusal by you or any of your
-7-<PAGE>
branches, affiliates or correspondents to pay or honor drafts drawn
under the Credit because of any United States or foreign laws or
regulations now or hereafter in force or for any other matter beyond
your control.
11. If it is a condition of this Credit that the beneficiary is
authorized to draw clean drafts, you are authorized and instructed to
accept and pay drafts without requiring, and without responsibility
for, the delivery of shipping documents, either at the time of
acceptance or of payment or thereafter.
12. We hereby certify and agree that no shipments or other
transactions in connection with the Credit will be undertaken in
violation of any United States or foreign laws or regulations. We
agree to procure promptly any necessary import, export or other
licenses for the import, export or shipping of the property and to
comply with all United States and foreign governmental regulations in
regard to the shipment of the property or the financing thereof, and
to furnish such certificates in that respect as you may at any time
require. We also agree to keep the property adequately covered by
insurance acceptable to you, to assign the policies or certificates of
insurance to you or, at your option, to make any loss or adjustment
payable to you, and upon your request, to furnish you with evidence of
acceptance of any such assignment by the insurers.
13. In the event that you deliver to us or to a Customs House
Broker at our request any of the documents of title pledged hereunder
prior to having received payment in full of all of our liabilities to
you, we agree to obtain possession of any goods represented by such
documents within twenty-one days after the date of delivery of such
documents, and, if we should fail to do so, we agree to return such
documents or to have them returned by the Customs House Broker to you
prior to the expiration of the twenty-one day period. We further
agree to execute and deliver to you receipts for such documents and
the goods represented thereby identifying and describing such
documents and goods, which receipts shall constitute a part of this
Agreement.
14. We hereby authorize you, in the event that you become aware
that we have claimed from the carrier any goods identified in the
shipping documents required under the Credit and that such goods have
been released to us or to a customs broker or agent acting on our
behalf, to immediately, and without further inquiry and consideration,
charge the amount of the Credit represented by such goods to any
available funds then held by you.
[Paragraph 15 deleted.]
16. In the event of (a) any default hereunder, (b) the death,
failure in business, dissolution or termination of existence of any of
-8-<PAGE>
us, (c) the filing of any petition in bankruptcy by or against any of
us, (d) the commencement of any proceedings in bankruptcy or relating
to the relief of debtors for the relief or readjustment of any
indebtedness of any of us, either through reorganization, composition,
extension or otherwise, (e) an assignment by any of us for the benefit
of creditors or the utilization by any of us of any insolvency law,
(f) the appointment of a receiver of any property of any of us at any
time or (g) any attachment or distrainment of property of any of us
which may be in, or come into, your possession and control or that of
any third party acting for you or the subjection of such property at
any time to any mandatory order of court of other legal process; then,
or at any time after the happening of any such event, the amount of
the Credit, both drawn and undrawn, as well as any and all other
amounts payable hereunder to you (to the extent not theretofore paid
to you hereunder) shall become immediately due and payable without
demand or notice.
17. The rights which you possess hereunder shall continue
unimpaired, and we shall remain obligated in accordance with the terms
and provisions hereof, notwithstanding the release or substitution of
any property which may be held as security hereunder at any time, or
of any right or interest therein. If this Agreement should be
terminated or revoked as to us by operation of law, we will indemnify
and save you harmless from any loss which may be incurred by you in
acting hereunder prior to the receipt by you or your successors,
transferees, or assigns of notice in writing of such termination or
revocation. No delay, extension of time, renewal, compromise or other
indulgence which may occur shall impair your rights or powers
hereunder. You shall not be deemed to have waived any of your rights
hereunder unless you or your authorized agent shall have signed such
waiver in writing. No such waiver, unless expressly stated therein,
shall be effective as to any transaction which occurs subsequent to
the date of such waiver or as to any continuance of a breach after
such waiver.
18. Except as otherwise expressly provided in the Application
and this Agreement or as you and we may otherwise expressly agree with
regard to and prior to your issuance of the Credit, the "Uniform
Customs and Practice for Documentary Credits (1983 Revision),
International Chamber of Commerce, Publication 400", or such
subsequent Uniform Customs and Practice as established by the
International Chamber of Commerce and in effect at the time of
reference thereto (hereinafter referred to as the "UCP"), shall be
deemed a part hereof as fully as if incorporated herein, shall be
binding on the Credit and shall serve, in the absence of proof
expressly to the contrary, as evidence of general banking usage.
19. The word "property" as used herein includes goods and
merchandise (as well as any and all documents related thereto),
securities, funds, monies (whether United States currency or
-9-<PAGE>
otherwise), choses in action, and any and all other forms of property,
whether real, personal or mixed and any right or interest of us, or
any one or more or us, therein.
20. If this Agreement is signed by one party, the terms "we,"
"our," "us," shall be read throughout as "I," "my," "me," as the case
may be. If this Agreement is signed by two or more parties, it shall
constitute the joint and several agreement of such parties. If we are
a corporation, we hereby represent and warrant to you that: (a) we are
duly organized and validly existing and duly authorized to enter into
this Agreement and to perform obligations hereunder; and (b) the
execution and delivery of this Agreement do not, and the performance
of the obligations under this Agreement will not, violate any
provisions of law, of our certificate of incorporation or by-laws or
of any agreement, indenture, note or other instrument which is binding
on us.
21. This Agreement shall become effective upon your receipt
thereof and shall be governed by the laws of the State of Illinois,
United States of America, and shall be binding upon us and our heirs,
successors, assigns and legal representatives. We hereby irrevocably
submit to the non-exclusive jurisdiction of any United States Federal
or state court sitting in Chicago in any action or proceeding related
to the Credit or this Agreement.
Very Truly Yours,
__________________________________________________
Company or Individual Name (Applicant/Obligor)
__________________________________________________
Official Signature and Title
__________________________________________________
Address: Street
__________________________________________________
City State Zip
__________________________________________________
Contact Party Telephone
Commissions will be debited to the Demand Deposit Account of the
Applicant/Obligor unless otherwise agreed,
-10-<PAGE>
______________________________________________________________________
FOR BANK USE ONLY: Liabilities outstanding: Approved by:
Import Contingent _________________ _________________________
Signature of Relationship
Standby Contingent ________________ Manager with authority to
initial notes for this
Acceptances _______________________ Applicant/Obligor
Total ________________________
Credit Responsibility:
MAS No. _________________
Group Name_______________
______________________________________________________________________
IF THE LETTER OF CREDIT IS SECURED BY A SEGREGATED CASH DEPOSIT
TO BE DEBITED TO THE CUSTOMER'S ACCOUNT AT ISSUANCE.
PLEASE CHECK __
______________________________________________________________________
-11-<PAGE>
EXHIBIT D
COMPLIANCE CERTIFICATE
I, ______________________, certify that I am the
_________________ of Scotsman Industries, Inc. (the "Company"), and
that as such I am authorized to execute this Compliance Certificate on
behalf of the Company, and DO HEREBY FURTHER CERTIFY on behalf of the
Company that:
1. I have reviewed the terms of that certain Credit Agreement,
dated as of April 29, 1994, among Scotsman Group Inc. and the other
parties named therein, the financial institutions named therein (the
"Lenders") and The First National Bank of Chicago, as agent (the
"Agent") (as amended, supplemented or modified from time to time, the
"Credit Agreement") and I have made, or have caused to be made by
employees or agents under my supervision, a detailed review of the
transactions and conditions of the Company and its Subsidiaries (as
this and other capitalized terms not defined herein are defined in the
Credit Agreement) during the accounting period covered by the attached
financial statements;
2. The examinations described in paragraph 1 did not disclose,
and I have no knowledge of, the existence of any condition or event
which constitutes a Default or Unmatured Default during or at the end
of the accounting period covered by the attached financial statements
or as of the date of this Compliance Certificate, except as set forth
below; and
3. SCHEDULE I attached hereto sets forth financial data and
computations indicating the calculation of the Applicable Eurocurrency
Margin and evidencing compliance with the covenants set forth in
Sections 6.11, 6.13, 6.15, 6.17, 6.18 and 6.27 of the Credit Agreement
and other provisions thereof relating to Restricted Foreign Transfers,
all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 2
by listing, in detail, the nature of the condition or event, the
period during which it has existed and the action which the Company
has taken, is taking, or proposes to take with respect to each such
condition or event:
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
-1-<PAGE>
The foregoing certifications, together with the computations set
forth in SCHEDULE I hereto and the financial statements delivered with
this Compliance Certificate in support hereof, are made and delivered
this ______ day of ______________, 19__.
SCOTSMAN INDUSTRIES, INC.
By: ___________________________
Title: _________________________
-2-<PAGE>
SCHEDULE I
__________
<TABLE>
<S> <C>
CALCULATION OF APPLICABLE EUROCURRENCY MARGIN
---------------------------------------------
Calculation of Interest Expense Coverage Ratio:
(a) Aggregate EBITA of the Company and its
Subsidiaries for the Fiscal Quarter ending on
the date of determination:
(i) Net Income for the Company and its $________
Subsidiaries on a consolidated basis
from continuing operations for such
period
(ii) Aggregate amounts deducted in $________
determining Net Income for such period
in respect of (A) income, net worth and
franchise taxes, (B) interest expenses,
(C) amortization and (D) write-offs of
goodwill
(iii) sum of (i) and (ii) $________
(b) Aggregate interest expenses deducted in $________
determining Net Income of the Company and its
Subsidiaries on a consolidated basis for such
Fiscal Quarter
(c) Ratio of (a) to (b) ___ to 1.0
CALCULATION OF RESTRICTED FOREIGN TRANSFERS
-------------------------------------------
1. Actual Restricted Foreign Transfers for period from
and including 4/29/94 through date of
determination:
(a) Dividends paid by the Company and its $________
Domestic Subsidiaries to Foreign Subsidiaries
(b) Property dispositions to Foreign Subsidiaries $________
at less than fair market value or by Foreign
Subsidiaries at greater than fair market
value
(c) Investments by the Company and its Domestic $________
Subsidiaries in Foreign Subsidiaries
(d) Purchases by the Company and its Domestic $________
Subsidiaries of Foreign Subsidiary assets or
stock
-1-<PAGE>
(e) sum of (a) through (d) $________
(f) sum of (a), (c) and (d) $________
2. Actual Domestic Transfers for period from and
including 4/29/94 through date of determination:
(a) Dividends paid by Foreign Subsidiaries to the $________
Company and its Domestic Subsidiaries
(b) Property dispositions to Foreign Subsidiaries $________
at greater than fair market value or by
Foreign Subsidiaries at less than fair market
value
(c) Repayments by Foreign Subsidiaries of $________
Investments by Industries or Domestic
Subsidiaries
(d) Sales by the Company and its Domestic $________
Subsidiaries of Foreign Subsidiary assets or
stock
(e) sum of (a) through (d) $________
(f) sum of (a), (c) and (d) $________
3. Foreign Transfer Cap--Overall Limitation
(a) Cap $55,000,000
(b) Calculation of actual level: $________
(i) Outstanding principal amount of $________
Advances to Foreign Subsidiaries
(ii) Amount determined pursuant to 1(e) $________
above
(iii) Amount determined pursuant to 2(e) $________
above
(iv) (i) plus (ii) less (iii) $________
(c) Compliance determination: (a) less (b) $________
4. Foreign Transfer Cap--Sublimit
(a) Cap $35,000,000
-2-<PAGE>
(b) Calculation of actual level:
(i) Outstanding principal amount of $________
Advances to Foreign Subsidiaries
(ii) Amount determined pursuant to 1(f) $________
above
(iii) Amount determined pursuant to 2(f) $________
above
(iv) (i) plus (ii) less (iii) $________
(c) Compliance determination: (a) less (b) $________
SECTION 6.11 -- INDEBTEDNESS
----------------------------
(incurrence tests)
Indebtedness under Section 6.11(e):
(a) Maximum aggregate notional amount referenced $20,000,000
by Rate Hedging Obligations related to other
than interest rate agreements
(b) Actual aggregate notional amount referenced $_______
by Rate Hedging Obligations related to other
than interest rate agreements
Indebtedness under Section 6.11(h):
1. Permitted Indebtedness:
(a) Consolidated Tangible Assets of the Company
and its Subsidiaries as of the last day of
the preceding Fiscal Quarter:
(i) Total assets of such Person as of $_______
such date
(ii) Total Intangible Assets of such $_______
Person as of such date
(iii) (i) less (ii) $_______
(b) 17% of (a) $_______
2. Actual outstanding Indebtedness incurred pursuant $_______
to Section 6.11(h) as of date of determination
-3-<PAGE>
SECTION 6.13 -- SALE OF ASSETS
------------------------------
Asset Dispositions for period from 4/29/94 to date of
determination:
(a) Permitted Asset Dispositions: 20% of $________
consolidated assets of the Company and its
Subsidiaries as of the last day of preceding
Fiscal Quarter
(b) Actual Asset Dispositions for such period $________
*Note: must also demonstrate (to the extent
calculable) that total Asset Dispositions for such
period do not involve Property which is responsible
for more than 20% of the consolidated net sales or
consolidated Net Income of the Company and its
Subsidiaries for the 12-month period ending as of the
last day of the Fiscal Quarter next preceding the date
of determination.
SECTION 6.15 -- INVESTMENTS
---------------------------
Investments under Section 6.15(i):
(a) Permitted outstanding loans to officers and $500,000
employees of Industries and its Subsidiaries
(b) Actual outstanding loans to employees of $________
Industries and its Subsidiaries
Investments under Section 6.15(m):
1. Permitted Investments:
(a) Consolidated Tangible Assets of the Company
and its Subsidiaries as of the last day of
the preceding Fiscal Quarter:
(i) Total assets of such Person as of $_______
such date
(ii) Total Intangible Assets of such $_______
Person as of such date
(iii) (i) less (ii) $_______
(b) 4% of (a) $_______
2. Actual Investments not otherwise permitted under $_______
Section 6.15 (a) - (e)
-4-<PAGE>
SECTION 6.17 -- CAPITAL EXPENDITURES
------------------------------------
1. Permitted aggregate Capital Expenditures for the $________
Company and its Subsidiaries for Fiscal Year to
date
2. Actual incurred and committed Capital Expenditures $________
for the Company and its Subsidiaries for Fiscal
Year to date
SECTION 6.18 -- RENTALS
-----------------------
1. Permitted aggregate Rentals for the Company and its $5,000,000
Subsidiaries for Fiscal Year to date
2. Actual aggregate Rentals for the Company and its $________
Subsidiaries for Fiscal Year to date
SECTION 6.25.1 -- MINIMUM NET WORTH
-----------------------------------
1. Required Adjusted Consolidated Tangible Net Worth:
(a) Greater of (i) Adjusted Consolidated Tangible $_______
Net Worth as of May 1, 1994 and (ii)
$50,000,000
(b) 60% of Net Income of the Company and its $________
Subsidiaries for the period from 5/2/94
through the end of the Fiscal Quarter
immediately preceding the date of
determination
(c) Amount, if any, by which Adjusted $________
Consolidated Tangible Net Worth is increased
as a result of any issuance of Scotsman
Earnout Shares or Scotsman Contingent Common
Stock
(d) 60% of the net cash proceeds received after $________
April 29, 1994 by Industries or any
Subsidiary from the issuance of any equity
security to any Person other than Industries
or any Subsidiary
(e) Sum of (a) through (d) less $2,000,000 $________
2. Actual Adjusted Consolidated Tangible Net Worth:
(a) Consolidated Net Worth of the Company and its $________
Subsidiaries
-5-<PAGE>
(b) Consolidated Intangible Assets of the Company $________
and its Subsidiaries
(c) Intangible Assets acquired by the Company or $________
any Subsidiary in connection with or
resulting from transactions contemplated by
the Merger Agreement and the Purchase
Agreement (less depreciation or amortization
thereof through the date of determination)
(d) Intangible Assets from Purchases:
(i) Intangible Assets acquired in $______
connection with or resulting from
Purchases consummated after 4/29/94
(ii) 60% of aggregate purchase price $______
(including consideration paid and
liabilities assumed) of Purchases
referenced in clause (i)
(iii) least of (i), (ii) and $12,000,000 $________
(e) (a) less (b) plus (c) plus (d) $________
SECTION 6.25.2 -- LEVERAGE RATIO
--------------------------------
1. Required Leverage Ratio ____ to 1.0
2. Actual Leverage Ratio:
(a) Consolidated Funded Debt of the Company and
its Subsidiaries $________
(b) Consolidated Net Worth of the Company and its $________
Subsidiaries
(c) Ratio of (a) to (b) ____ to 1.0
SECTION 6.25.3 -- INTEREST EXPENSE COVERAGE RATIO
-------------------------------------------------
1. Required Interest Expense Coverage Ratio ____ to 1.0
2. Actual Interest Expense Coverage Ratio:
(a) Aggregate EBITA of the Company and its
Subsidiaries for the applicable period:
(i) Net Income for the Company and its $________
Subsidiaries on a consolidated basis
from continuing operations for such
period
-6-<PAGE>
(ii) Aggregate amounts deducted in $________
determining Net Income for such
period in respect of (A) income, net
worth and franchise taxes, (B)
interest expenses, (C) amortization
and (D) write-offs of goodwill
(iii) sum of (i) and (ii) $________
(b) Aggregate interest expenses deducted in $________
determining Net Income of the Company and its
Subsidiaries on a consolidated basis for such
period
(c) Ratio of (a) to (b) ____ to 1.0
SECTION 6.25.4 -- CASH FLOW COVERAGE RATIO
------------------------------------------
1. Required Cash Flow Coverage Ratio ____ to 1.0
2. Actual Cash Flow Coverage Ratio:
(a) Net Income for the Company and its $________
Subsidiaries on a consolidated basis
(excluding extraordinary gains but including
extraordinary losses)
(b) Aggregate amounts deducted in determining Net $________
Income in respect of (i) non-cash interest
charges, (iii) the deferred portion of the
provision for income taxes, (iii)
amortization of debt discount and
intangibles, (iv) depreciation, depletion,
amortization and other similar non-cash
charges, (v) non-cash charges mandated by the
Financial Accounting Standards Board and (vi)
unamortized fees and redemption premiums paid
in connection with the redemption or
repayment of Indebtedness
(c) Sum of (a) and (b) $________
(d) Consolidated Funded Debt of the Company and $________
its Subsidiaries
(e) Ratio of (c) to (d) ____ to 1.0
</TABLE>
-7-<PAGE>
[Letterhead of Arthur Andersen & Co.] Exhibit E
April 29, 1994
Mr. Don Holmes
Vice President - Finance
Scotsman Industries, Inc.
775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Dear Don:
Our firm has been engaged to audit the consolidated financial
statements of Scotsman Industries, Inc. and Subsidiaries (the Company)
as of and for the year ended January 2, 1994 (the "1993 financial
statements"). In this regard, we understand and acknowledge (a) that
the Company plans to provide each of the lenders ("the lenders") named
in that certain Credit Agreement dated as of April 29, 1994 among
Scotsman Group, Inc., and the other parties named therein, the lenders
named therein and The First National Bank of Chicago, as agent (the
"Credit Agreement"), with a copy of the 1993 financial statements and
our report thereon, (b) that the lenders have informed you that they
intend to rely upon our report in connection with the transactions
contemplated by the Credit Agreement, and (c) that you intend for the
lenders to so reply.
Our audit has been conducted in accordance with generally accepted
auditing standards, the objective of which is to form an opinion as to
whether the financial statements, which are the responsibility and
representations of the management of the company, present fairly, in
all material respects, the Company's financial position, results of
operations and cash flows in conformity with generally accepted
accounting principles. Under those standards, we have the
responsibility, within the inherent limitations of the auditing
process, to plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material
misstatement. The concept of selective testing of the data being
audited, which involved judgment both as to the number of transactions
to be audited and as to the areas to be tested, has been generally
accepted as a valid and sufficient basis for an auditor to express an
opinion on financial statements. thus, our audit, based on the
concept of selective testing, was subject to the inherent risk that
material misstatements, if any, were not detected. In addition, our
audit did not address future events or the possibility that material
misstatements may occur in the future.
Also, our use of professional judgment and the assessment of
materiality for the purpose of our work means that matters may have
-1-<PAGE>
existed that would have been assessed differently by others, including
the lenders, in connection the Credit Agreement.
Our audit of the Company's 1993 financial statement was made for the
purpose stated above and, therefore, items of possible interest to the
lenders may not be specifically addressed. Accordingly, our audit
should not be taken to supplant the inquiries and procedures that the
lenders should undertake for the purpose of satisfying themselves as
to the Company's credit worthiness or compliance with the provisions
of the Credit Agreement referred to above. We trust that the lenders
have conducted their own due diligence investigation of the Company
and will continue to do so int he future, including an analysis of the
Company's current business activities, discussions with Company
management, and any other procedures they deem appropriate.
It is management's responsibility to adopt sound accounting policies,
to maintain an adequate and effective system of accounts, and to
devise an internal control structure that will, among other things,
provide reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition, and
that transactions are executed in accordance with management's
authorization and recorded properly to permit the preparation of
financial statements in conformity with generally accepted accounting
principles.
This letter is issued in connection with our report on the Company's
1993 financial statements. our understanding and acknowledgement
referred to above does not extend to other agreements or reports, if
any, that might be rendered in connection with future engagements.
Very truly yours,
ARTHUR ANDERSEN & CO.
/s/ Arthur Endersen & Co.
-------------------------
By /s/ Wayne Peters, Partner
-------------------------
BB/4996M
Copy to:
The First National Bank of Chicago
Continental Bank, N.A.
Comerica Bank, N.A.
The Bank of Nova Scotia
-2-<PAGE>
Caisse Nationale de Credit Agricole
Royal Bank of Scotland
-3-<PAGE>
EXHIBIT F
FORM OF
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
_________________________________ (the "Assignor") and
_______________________________ (the "Assignee") is dated as of
____________________, 19__. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to a Credit
Agreement (which, as it may be amended, supplemented, modified,
renewed or extended from time to time is herein called the "Credit
Agreement") described in Item 1 of SCHEDULE 1 attached hereto.
Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed thereto in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and
assigns to the Assignee, and the Assignee hereby purchases and assumes
from the Assignor, an interest in and to the Assignor's rights and
obligations under the Credit Agreement such that after giving effect
to such assignment the Assignee shall have purchased pursuant to this
Assignment Agreement the percentage interest specified in Item 3 of
SCHEDULE 1 of all outstanding rights and obligations under the Credit
Agreement relating to the Loans and the other Loan Documents. The
aggregate Commitment (or Loans, if the applicable Commitment has been
terminated) purchased by the Assignee hereunder is set forth in Item 4
of SCHEDULE 1. In addition, by its execution hereof, the Assignee
agrees to be bound by the terms and conditions of the Intercreditor
Agreement.
3. EFFECTIVE DATE. The effective date of this Assignment
Agreement (the "Effective Date") shall be the later of the date
specified in Item 5 of SCHEDULE 1 or two Business Days (or such
shorter period agreed to by the Agent) after a Notice of Assignment
substantially in the form of EXHIBIT A attached hereto has been
delivered to the Agent. Such Notice of Assignment must include any
consents required to be delivered to the Agent pursuant to Section
12.3.1 of the Credit Agreement. In no event will the Effective Date
occur if the payments required to be made by the Assignee to the
Assignor on the Effective Date under SECTION 4 hereof are not made on
the proposed Effective Date. The Assignor will notify the Assignee of
the proposed Effective Date no later than the Business Day prior to
the proposed Effective Date. As of the Effective Date, (a) the
Assignee shall have the rights and obligations of a Lender under the
Loan Documents with respect to the rights and obligations assigned to
the Assignee hereunder, and (b) the Assignor shall relinquish its
rights and be released from its corresponding obligations under the
Loan Documents with respect to the rights and obligations assigned to
the Assignee hereunder.<PAGE>
4. PAYMENT OBLIGATIONS. On and after the Effective Date, the
Assignee shall be entitled to receive from the Agent all payments of
principal, interest and fees with respect to the interest assigned
hereby. The Assignee shall advance funds directly to the Agent with
respect to all Loans and reimbursement payments made on or after the
Effective Date with respect to the interest assigned hereby. [In
consideration for the sale and assignment of Loans hereunder, (a) the
Assignee shall pay the Assignor, on the Effective Date, an amount
equal to the principal amount of the portion of all Floating Rate
Advances assigned to the Assignee hereunder, and (b) with respect to
each Eurocurrency Advance made by the Assignor and assigned to the
Assignee hereunder which is outstanding on the Effective Date, (i) on
the last day of the Interest Period therefor, (ii) on such earlier
date agreed to by the Assignor and the Assignee, or (iii) on the date
on which any such Eurocurrency Advance either becomes due (by
acceleration or otherwise) or is prepaid (the date as described in the
foregoing clauses (i), (ii) or (iii) being hereinafter referred to as
the "Payment Date"), the Assignee shall pay the Assignor an amount
equal to the principal amount of the portion of such Eurocurrency
Advance assigned to the Assignee which is outstanding on the Payment
Date. If the Assignor and the Assignee agree that the Payment Date
for such Eurocurrency Advance shall be the Effective Date, they shall
agree to the interest rate applicable to the portion of such Loan
assigned hereunder for the period from the Effective Date to the end
of the existing Interest Period applicable to such Eurocurrency
Advance (the "Agreed Interest Rate") and any interest received by the
Assignee in excess of the Agreed Interest Rate shall be remitted to
the Assignor. In the event interest for the period from the Effective
Date to but not including the Payment Date is not paid by the Borrower
with respect to any Eurocurrency Advance sold by the Assignor to the
Assignee hereunder, the Assignee shall pay to the Assignor interest
for such period on the portion of such Eurocurrency Advance sold by
the Assignor to the Assignee hereunder at the applicable rate provided
by the Credit Agreement. In the event a prepayment of any
Eurocurrency Advance which is existing on the Payment Date and
assigned by the Assignor to the Assignee hereunder occurs after the
Payment Date but before the end of the Interest Period applicable to
such Eurocurrency Advance, the Assignee shall remit to the Assignor
the excess of the prepayment penalty paid with respect to the portion
of such Eurocurrency Advance assigned to the Assignee hereunder over
the amount which would have been paid if such prepayment penalty was
calculated based on the Agreed Interest Rate. The Assignee will also
promptly remit to the Assignor (x) any principal payments received
from the Agent with respect to Eurocurrency Advances prior to the
Payment Date, and (y) any amounts of interest on Loans and fees
received from the Agent which relate to the portion of the Loans
assigned to the Assignee hereunder for periods prior to the Effective
Date, in the case of Floating Rate Loans, or the Payment Date, in the
case of Eurocurrency Loans, and not previously paid by the Assignee to
the Assignor.] In the event that either party hereto receives any
-2-<PAGE>
payment to which the other party hereto is entitled under this
Assignment Agreement, then the party receiving such amount shall
promptly remit it to the other party hereto.
* Each Assignor may insert its standard payment provisions in lieu
of the payment terms included in this Exhibit.
5. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE
ASSIGNOR'S LIABILITY. The Assignor represents and warrants that it is
the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim created by the Assignor. It is understood and agreed that the
assignment and assumption hereunder are made without recourse to the
Assignor and that the Assignor makes no other representation or
warranty of any kind to the Assignee. Neither the Assignor nor any of
its officers, directors, employees, agents or attorneys shall be
responsible for (a) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectibility of any Loan
Document, including, without limitation, documents granting the
Assignor and the other Lenders a security interest in assets of any
Borrower or any guarantor, (b) any representation, warranty or
statement made in or in connection with any of the Loan Documents, (c)
the financial condition or creditworthiness of any Borrower or any
guarantor, (d) the performance of or compliance with any of the terms
or provisions of any of the Loan Documents, (e) inspecting any of the
Property, books or records of any Borrower, (f) the validity,
enforceability, perfection, priority, condition, value or sufficiency
of any collateral securing or purporting to secure the Loans, or (g)
any mistake, error of judgment, or action taken or omitted to be taken
in connection with the Loans or the Loan Documents.
6. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (a) confirms
that it has received a copy of the Credit Agreement, together with
copies of the financial statements requested by the Assignee and such
other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment
Agreement, (b) agrees that it will, independently and without reliance
upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under the Loan Documents, (c) appoints and authorizes the Agent
to take such action as agent on its behalf and to exercise such powers
under the Loan Documents as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental
thereto, (d) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Loan Documents
are required to be performed by it as a Lender, (e) agrees that its
payment instructions and notice instructions are as set forth in the
attachment to SCHEDULE 1, (f) confirms that none of the funds, monies,
assets or other consideration being used to make the purchase and
-3-<PAGE>
assumption hereunder are "plan assets" as defined under ERISA and that
its rights, benefits and interests in and under the Loan Documents
will not be "plan assets" under ERISA, [and (g) attaches the forms
prescribed by the Internal Revenue Service of the United States
certifying that the Assignee is entitled to receive payments under the
Loan Documents without deduction or withholding of any United States
federal income taxes].*
* to be inserted if the Assignee is not incorporated under the laws
of the United States, or a state thereof.
7. INDEMNITY. The Assignee agrees to indemnify and hold the
Assignor harmless against any and all losses, costs and expenses
(including, without limitation, reasonable attorneys' fees) and
liabilities incurred by the Assignor in connection with or arising in
any manner from the Assignee's non-performance of the obligations
assumed under this Assignment Agreement. The obligations of the
Assignee under this SECTION 7 shall survive the payment of all amounts
hereunder and the termination of this Agreement.
8. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the
Assignee shall have the right pursuant to and in accordance with
Section 12.3 of the Credit Agreement to assign the rights which are
assigned to the Assignee hereunder to any entity or person; PROVIDED,
that (a) any such subsequent assignment does not violate any of the
terms and conditions of the Loan Documents or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any
consent required under the terms of the Loan Documents has been
obtained, and (b) unless the prior written consent of the Assignor is
obtained, the Assignee is not thereby released from its obligations to
the Assignor hereunder, if any remain unsatisfied, including, without
limitation, its obligations under SECTIONS 4, 5 and 8 hereof.
9. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment
Agreement and the Effective Date, the percentage interest specified in
Item 3 of SCHEDULE 1 shall remain the same, but the dollar amount
purchased shall be recalculated based on the reduced Aggregate
Commitment.
10. ENTIRE AGREEMENT. This Assignment Agreement and the
attached Notice of Assignment embody the entire agreement and
understanding between the parties hereto and supersede all prior
agreements and understandings between the parties hereto relating to
the subject matter hereof.
11. GOVERNING LAW. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED
BY THE INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS,
OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE
TO NATIONAL BANKS.
-4-<PAGE>
12. NOTICES. Notices shall be given under this Assignment
Agreement in the manner set forth in the Credit Agreement. For the
purpose hereof, the addresses of the parties hereto (until notice of a
change is delivered) shall be the address set forth in the attachment
to SCHEDULE 1.
-5-<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement by their duly authorized officers as of the date
first above written.
[NAME OF ASSIGNOR]
By:________________________________
Title:_____________________________
_____________________________
_____________________________
[NAME OF ASSIGNEE]
By:________________________________
Title:_____________________________
_____________________________
_____________________________
-6-<PAGE>
SCHEDULE 1
TO ASSIGNMENT AGREEMENT
1. Description and Date of Credit Agreement:
That certain Credit Agreement dated as of April
29, 1994 among Scotsman Group Inc. and the other
parties named therein, the financial institutions
named therein and The First National Bank of
Chicago, as agent.
2. Date of Assignment Agreement: _____________, 19__
3. Amounts (As of Date of Item 2 above):
a. Total of Commitments (Loans)*
under Credit Agreement $__________
b. Assignee's percentage of the
(Loans)* Commitments purchased
under the Assignment Agreement** __________%
4. Assignee's aggregate (Loan amount)*
Commitment amount purchased hereunder: $__________
5. Proposed Effective Date: __________
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:____________________________ By:____________________________
Title:_________________________ Title:_________________________
* If a Commitment has been terminated, insert outstanding Loans in
place of Commitment
** Percentage taken to 10 decimal places<PAGE>
ATTACHMENT TO SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address for the Assignor and the Assignee<PAGE>
EXHIBIT A
TO ASSIGNMENT AGREEMENT
NOTICE OF ASSIGNMENT
________ __, 19__
To: Scotsman Group Inc.
775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
The First National Bank of Chicago
One First National Plaza
Chicago, IL 60670
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to the Credit Agreement (the "Credit
Agreement") described in Item 1 of SCHEDULE 1 attached hereto.
Capitalized terms used herein and not otherwise defined herein or in
such consent shall have the meanings attributed to them in the Credit
Agreement.
2. This Notice of Assignment (this "Notice") is given and
delivered to Group and the Agent pursuant to Section 12.3.2 of the
Credit Agreement.
3. The Assignor and the Assignee have entered into an
Assignment Agreement, dated as of ___________, 19__ (the
"Assignment"), pursuant to which, among other things, the Assignor has
sold, assigned, delegated and transferred to the Assignee, and the
Assignee has purchased, accepted and assumed from the Assignor the
percentage interest specified in Item 3 of SCHEDULE 1 of all
outstandings, rights and obligations under the Credit Agreement
relating to the facilities listed in Item 3 of SCHEDULE 1, including,
without limitation, such interest in the Assignor's Commitment (if
applicable) and the Loans owing to the Assignor relating to such
facilities. The effective date of the Assignment (the "Effective
Date") shall be the later of the date specified in Item 5 of
SCHEDULE 1 or two Business Days (or such shorter period as agreed to
by the Agent) after this Notice of Assignment and any consents and
fees required by Sections 12.3.1 and 12.3.2 of the Credit Agreement
have been delivered to the Agent; PROVIDED, that the Effective Date
shall not occur if any condition precedent agreed to by the Assignor
and the Assignee has not been satisfied.
4. The Assignor and the Assignee hereby give to Group and
the Agent notice of the assignment and delegation referred to herein.
The Assignor will confer with the Agent before the date specified in<PAGE>
Item 5 of SCHEDULE 1 to determine if the Assignment Agreement will
become effective on such date pursuant to SECTION 3 hereof and will
confer with the Agent to determine the Effective Date pursuant to
SECTION 3 hereof if it occurs thereafter. The Assignor shall notify
the Agent if the Assignment Agreement does not become effective on any
proposed Effective Date as a result of the failure to satisfy the
conditions precedent agreed to by the Assignor and the Assignee. At
the request of the Agent, the Assignor will give the Agent written
confirmation of the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Agent on
or before the Effective Date the processing fee of $2,500 required by
Section 12.3.2 of the Credit Agreement.
6. If Notes are outstanding on the Effective Date, the
Assignor and the Assignee request and direct that the Agent prepare
and cause the Borrowers to execute and deliver new Notes or, as
appropriate, replacement Notes, to the Assignor and the Assignee. The
Assignor and, if applicable, the Assignee each agree to deliver to the
Agent the original Notes received by it from the Borrowers upon its
receipt of new Notes in the appropriate amount.
7. The Assignee advises the Agent that notice and payment
instructions are set forth in the attachment to SCHEDULE 1.
8. Each party consenting to the Assignment in the space
indicated below hereby releases the Assignor from any obligations to
it which have been assigned to the Assignee. The Assignee hereby
represents and warrants that none of the funds, monies, assets or
other consideration being used to make the purchase pursuant to the
Assignment Agreement are "plan assets" as defined under ERISA and that
its rights, benefits and interests in and under the Loan Documents
will not be "plan assets" under ERISA.
9. The Assignee authorizes the Agent to act as its agent
under the Loan Documents in accordance with the terms thereof. The
Assignee acknowledges that the Agent has no duty to supply information
with respect to the Borrowers or the Loan Documents to the Assignee
until the Assignee becomes a party to the Credit Agreement.
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By:____________________________ By:____________________________
Title:_________________________ Title:_________________________
-2-<PAGE>
ACKNOWLEDGED AND CONSENTED TO ACKNOWLEDGED AND CONSENTED TO
BY THE FIRST NATIONAL BANK OF BY SCOTSMAN GROUP INC.
CHICAGO, as agent
By:____________________________ By:____________________________
Title:_________________________ Title:_________________________
[Attach photocopy of Schedule 1 to Assignment]
-3-<PAGE>
Schedule 2.8
------------
<TABLE>
<S> <C> <C>
Lender Currency Lending Installation
------ -------- --------------------
1. The First National Bank of Chicago US Dollars Chicago, Illinois
Alternative Currencies London, England
2. Continental Bank, N.A. US Dollars Chicago, Illinois
German Deutschemarks Bank of America
Frankfurt, Germany
Pounds Sterling Midland Bank International
London, England
Italian Lira Banca Commerciale Italiana
Milan, Italy
French Francs Banque Paribas
Paris, France
Japanese Yen Sumitomo Bank Ltd.
Canadian Dollars Bank of Montreal
Toronto, Ontario
Dutch Guilders Rabobank
Utrecht, Netherlands
3. Comerica Bank -- Illinois US Dollars Skokie, Illinois
Pounds Sterling Barclays Bank
London, England
Deutschemarks Chemical Bank, AG
Frankfurt, Germany
Italian Lira Banca Commerciale Italiana
Milan, Italy
French Francs Banque Nationale de Paris
Paris, France
Yen Sumitomo Bank Ltd.
Tokyo, Japan
Canadian Dollars The Bank of Nova Scotia
Toronto, Ontario
Dutch Guilders ABN AMRO Bank
Amsterdam, Netherlands
4. The Bank of Nova Scotia US Dollars Atlanta, Georgia
Alternative Currencies London, England
5. Caisse Nationale de Credit Agricole US Dollars Morgan Guaranty
New York, New York
Pounds Sterling Caisse Nationale de Credit Agricole
London, England
Japanese Yen Mitsubishi Bank Ltd.
Tokyo, Japan<PAGE>
French Francs Caisse Nationale de Credit Agricole
Paris, France
German Deutschemarks Bankers Trust Company
Frankfurt, Federal Republic of Germany
Canadian Dollars Royal Bank of Canada
Toronto, Ontario
Swiss Francs Union Bank of Switzerland
Geneva, Switzerland
Italian Lira Creddito Italiano
Milan, Italy
6. Bank of Scotland All Currencies New York, New York
</TABLE>
-2-<PAGE>
SCHEDULE 5.3
Compliance With Laws and Contracts
1. Consents and other actions required to be taken pursuant to the
Merger Agreement and the Purchase Agreement.
(i) Adoption of Merger Agreement by all holders of DFC Common
Stock.
(ii) Approval by the stockholders of Industries of the issuance
of shares in connection with the Merger and the Acquisition.<PAGE>
SCHEDULE 5.4
Governmental Consents
1. Filings required in connection with the Merger and the
Acquisition under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976, as amended.
2. Form S-4 and all related documents required to be filed with the
Securities and Exchange Commission in connection with the Merger
and the Acquisition, as well as all documents filed under
applicable state Blue Sky law requirements.
3. Filings with the New York Stock Exchange in connection with the
Merger and the Acquisition.
4. The identity of Scotsman Drink (once it becomes the owner of all
the capital shares of Whitlenge Acquisition) will need to be
disclosed on the periodic "Annual Return" filing of Whitlenge
Acquisition, required in the United Kingdom, when next filed.
5. Provisions of the Companies Act of 1985, in effect in the United
Kingdom, require that Whitlenge and Scotsman Drink, in connection
with the execution and delivery of their respective Guaranties,
comply with certain formalities including the filing of certain
statutory declarations by members of the Boards of Directors of
such companies.
6. No representation and warranty is made as to any consent or
filing required to be obtained or made in respect of the United
Kingdom Office of Fair Trading, Monopolies and Mergers Commission
and/or the Commission of the European Community in connection
with the transactions contemplated by the Purchase Agreement.<PAGE>
SCHEDULE 5.5
Consolidated Pro Forma
SCOTSMAN INDUSTRIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of January 2, 1994
(In thousands)
<TABLE>
<CAPTION>
Historical (1)
----------------------------------
DFC and
WAL Pro Forma
Scotsman Combined<F9> Subtotal Adjustments Pro Forma
-------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and temporary cash investments $ 8,462 $ 3,889 $ 12,351 $(638)<F3> $ 11,713
Trade accounts and notes receivable, net 28,578 12,887 41,465 0 41,465
Inventories 25,693 17,618 43,311 0 43,311
Deferred income taxes 3,748 119 3,867 0 3,867
Other current assets 1,701 1,053 2,754 0 2,754
-------- -------- -------- -------- --------
Total current assets 68,182 35,566 103,748 (638) 103,110
Properties and equipment, net 19,867 19,078 38,945 0 38,945
Cost of investments in acquired
businesses in excess of net
assets at acquisition, net 11,320 4,874 16,194 69,283<F7> 85,477
Debt issuance costs 0 676 676 (676)<F5> 0
Other noncurrent assets 3,804 528 4,332 0 4,332
-------- -------- -------- -------- --------
Total assets $103,173 $ 60,722 $163,895 $ 67,969 $231,864
======== ======== ======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt and current maturities
of long-term debt and capitalized
lease obligations $ 2,707 $ 5,206 $ 7,913 (2,694)<F8> $ 10,607
Trade accounts payable 11,743 7,115 18,858 0 18,858
Accrued income taxes 2,087 807 2,894 0 2,894
Accrued expenses 15,327 9,403 24,730 1,862<F4> 26,592
-------- -------- -------- ------- --------
Total current liabilities 31,864 22,531 54,395 (4,556) 51,951
Long-term debt and capitalized lease
obligations 29,469 31,471 60,940 27,654<F2> 88,594
Deferred income taxes 435 1,703 2,138 0 2,138
Other noncurrent liabilities 7,411 1,276 8,687 2,000<F7> 10,687
-1-<PAGE>
-------- -------- -------- -------- --------
Total liabilities 69,179 56,981 126,160 34,210 160,370
Redeemable preferred stock 0 3,000 3,000 (3,000)<F6> 0
Shareholders' equity
Common stock 721 1,564 2,285 (1,444)<F6> 841
Preferred stock 0 0 0 22,500<F6> 22,500
Additional paid in capital 20,557 6,381 26,938 8,499<F6> 35,437
Retained earnings (deficit) 20,855 (6,803) 14,052 6,803<F6> 20,855
Deferred compensation and
unrecognized pension cost (54) 0 (54) 0 (54)
Foreign currency translation adjustment (6,741) (401) (7,142) 401<F6> (6,741)
Less: Common stock held in treasury (1,344) 0 (1,344) 0 (1,344)
-------- -------- -------- -------- --------
Total shareholders' equity 33,994 741 34,735 36,759<F6> 71,494
-------- -------- -------- -------- --------
Total liabilities and shareholders' equity $103,173 $ 60,722 $163,895 $ 67,969 $231,864
======== ======== ======== ========= ========
<FN>
NOTES:
<F1>(1) Includes the balance sheets of Scotsman, DFC, and WAL as of
January 2, 1994, December 31, 1993 and September 30, 1993,
respectively.
<F2>(2) Represents new borrowings required to finance the acquisition
($62,523) net of payment of certain amounts of the acquired entities
existing debt ($32,175), net of current portions ($2,894).
<F3>(3) Represents payment of acquired entities accrued interest
balances with existing cash.
<F4>(4) Includes payment of acquired entities accrued interest
balances with existing cash. Also includes the allocation of the
purchase price to the estimated fair value of the net assets acquired.
<F5>(5) Represents write-off of DFC capitalized debt issuance costs
from a previous recapitalization.
<F6>(6) Represents Scotsman common stock issued ($120) net of
acquired entities common stock retired ($1,504); Scotsman convertible
preferred stock issued ($22,500); additional paid in capital on
Scotsman common stock issued ($14,880) net of retirement of acquired
entities additional paid in capital ($6,381); retirement of acquired
entities net retained earnings balance ($6,803); retirement of
acquired entities redeemable preferred stock ($3,000); and retirement
of acquired entities unfavorable foreign currency translation
adjustment ($401).
<F7>(7) Represents the allocation of the purchase price to the
estimated fair value of the net assets acquired.
-2-<PAGE>
<F8>(8) Represents the reclassification of the current portion of
Scotsman's new debt facility net of the current portion of the debt
retired.
<F9>(9) See the Unaudited Pro Forma Condensed Combining Balance Sheet
on page __.
</TABLE>
-3-<PAGE>
SCOTSMAN INDUSTRIES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINING BALANCE SHEET
As of January 2, 1994
(In thousands)
<TABLE><CAPTION>
WAL
-----------------------------------------------------
British Pounds Sterling US Dollars
--------------------------------------- -------------------
Adjust DFC and
to WAL
UK GAAP<F1> US GAAP<F2> US GAAP US GAAP<F3> DFC<F1> Combined
---------- ---------- ---------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current Assets
Cash and temporary cash investments 2,260 0 2,260 $ 3 ,390 $ 499 $ 3,889
Trade accounts and notes receivable, net 1,978 0 1,978 2,967 9,920 12,887
Inventories 2,805 0 2,805 4,208 13,410 17,618
Deferred income taxes 0 79 79 119 0 119
Other current assets 138 0 138 207 846 1,053
------ ------ ------ ------ ------ ------
Total current assets 7,181 79 7,260 10,891 24,675 35,566
Properties and equipment, net 600 0 600 900 18,178 19,078
Cost of investments in acquired
businesses in excess of net
assets at acquisition, net 0 3,249 3,249 4,874 0 4,874
Debt issuance costs 0 0 0 0 676 676
Other noncurrent assets 1 0 1 2 526 528
------ ------ ------ ------ ------ ------
Total assets 7,782 3,328 11,110 $ 16,667 $ 44,055 $ 60,722
====== ====== ====== ====== ====== ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt and current maturities
of long-term debt and capitalized
lease obligations 745 0 745 $ 1,118 $ 4,088 $ 5,206
Trade accounts payable 2,001 0 2,001 3,002 4,113 7,115
Accrued income taxes 539 0 539 807 0 807
Accrued expenses 905 0 905 1,353 8,050 9,403
------ ------ ------ ------ ------ ------
Total current liabilities 4,190 0 4,190 6,280 16,251 22,531
Long-term debt and capitalized lease
obligations 2,781 0 2,781 4,170 27,301 31,471
Deferred income taxes 0 10 10 15 1,688 1,703
Other noncurrent liabilities 1 120 121 182 1,094 1,276
------ ------ ------ ------ ------ ------
-4-<PAGE>
Total liabilities 6,972 130 7,102 10,647 46,334 56,981
Redeemable preferred stock 0 2,000 2,000 3,000 0 3,000
Shareholders' equity
Common stock 1,000 0 1,000 1,500 64 1,564
Preferred stock 2,000 (2,000) 0 0 0 0
Additional paid in capital 0 0 0 0 6,381 6,381
Retained earnings (deficit) (2,190) 3,198 1,008 1,921 (8,724) (6,803)
Deferred compensation and unrecognized
pension cost 0 0 0 0 0 0
Foreign currency translation adjustment 0 0 0 (401) 0 (401)
Less: Common stock held in treasury 0 0 0 0 0 0
------ ------ ------ -------- ------ ------
Total shareholders' equity (deficit) 810 1,198 2,008 3,020 (2,279) 741
------ ------ ------ -------- ------ ------
Total liabilities and shareholders' equity 7,782 3,328 11,110 $ 16,667 $ 44,055 $ 60,722
====== ====== ====== ====== ====== ======
<FN>
<F1> (1) Represents historical balance sheets of WAL and DFC as of September 30, 1993 and December 31, 1993,
respectively, and as presented in the financial statements section on page F-__ and F-__, respectively.
<F2> (2) Represents adjustments from UK GAAP to US GAAP as discussed in footnote 20 to the WAL financial statements
for the year ended September 30, 1993 on pages F-__ to F-__.
<F3> (3) The WAL balance sheet in British pounds sterling is converted to US dollars using exchange rates discussed on
page __.
</TABLE>
-5-<PAGE>
SCOTSMAN INDUSTRIES, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME
For the Year Ended January 2, 1994
(In thousands, except per share data)
<TABLE>
<CAPTION>
Historical <F1>
-----------------------------------
DFC and
WAL Pro Forma
Scotsman Combined<F8> Subtotal Adjustments Pro Forma
-------- ----------- -------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Net sales $163,952 $117,818 $281,770 $ 0 $281,770
Cost of sales 114,472 87,844 202,316 0 202,316
-------- -------- -------- -------- --------
Gross profit 49,480 29,974 79,454 0 79,454
Unusual charge 0 390 390 0 390
Selling and administrative expenses 31,874 17,425 49,299 1,193 <F5> 50,492
-------- -------- -------- -------- --------
Income from operations 17,606 12,159 29,765 (1,193) 28,572
Interest expense, net 4,235 2,868 7,103 1,909 <F6> 9,012
-------- -------- -------- -------- --------
Income before income taxes 13,371 9,291 22,662 (3,102) 19,560
Income taxes 5,989 3,651 9,640 (548)<F7> 9,092
-------- -------- -------- -------- --------
Net income before extraordinary item and
cumulative effect of accounting changes $ 7,382 $ 5,640 $ 13,022 $ (2,554) $ 10,468
======== ======== ======== ======== ========
Net income per share before extraordinary
item and cumulative effect of
accounting changes 1.06 <F2> 1.08 <F4>
Average number of common shares outstanding 7,001 9,726 <F3>
Notes:
<FN>
<F1>(1) Includes the results of operations of Scotsman, DFC and WAL
for the fiscal year ended January 2, 1994, December 31, 1993 and
September 30, 1993, respectively.
<F2>(2) Net income per share (EPS) excludes the dilutive effect of
stock options outstanding as such effect is immaterial.
<F3>(3) Pro forma weighted average number of common shares
outstanding consists of 7,001 Scotsman shares plus 1,200 common shares
issued for the acquisition plus 1,525 common stock equivalents (2,000
shares of preferred stock convertible into 1,525 shares of common
stock).
-6-<PAGE>
<F4>(4) EPS excludes the effect of up to 667 additional shares of
common stock which are contingently issuable as additional purchase
price if the acquired entities achieve certain combined earnings
levels in fiscal year 1994. These earnings levels are based on
earnings before interest, taxes, depreciation and amortization
(EBITDA). The minimum level of EBITDA required in fiscal 1994 that
would require issuance of any of the 667 contingent shares is
approximately 23% higher than combined DFC and WAL EBITDA for the
fiscal years ended December 31,1993 and September 30, 1993,
respectively. If all 667 contingent shares are issued, approximately
$8,340 of additional purchase price and approximately $209 of
additional annual amortization expense will result. If all of these
contingent shares were included in the above EPS calculation, EPS
would have been $.99.
<F5>(5) Represents amortization expense for the period of the
allocation of the purchase price to the estimated fair value of the
net assets acquired using a 40 year amortization period and
elimination of management fees paid by DFC and WAL.
<F6>(6) Represents net additional interest expense for the period.
Consists of additional interest expense on new debt at 7% per annum
($2,124) and reduction of interest expense on refinanced debt ($215).
<F7>(7) Represents the related tax effect of pro forma adjustments.
<F8>(8) See the Unaudited Pro Forma Condensed Combining Statement of
Income for the Year Ended January 2, 1994 on page __.
</TABLE>
-7-<PAGE>
SCOTSMAN INDUSTRIES, INC.
UNAUDITED PRO FORMA CONDENSED COMBINING STATEMENT OF INCOME
For the year ended 1/2/94
(In thousands, except per share data)
<TABLE>
<CAPTION>
WAL
-----------------------------------------------------
British Pounds Sterling US Dollars
---------------------------------------- ----------------------
Adjust DFC and
to WAL
UK GAAP<F1> US GAAP<F3> US GAAP US GAAP<F4> DFC<F2> Combined
---------- ---------- ------- ---------- ------ --------
<S> <C> <C> <C> <C> <C> <C>
Net sales 13,970 0 13,970 $ 24,168 $ 93,650 $117,818
Cost of sales 9,994 0 9,994 17,290 70,554 87,844
-------- -------- -------- -------- -------- --------
Gross profit 3,976 0 3,976 6,878 23,096 29,974
Unusual charge 0 0 0 0 390 390
Selling and administrative expenses 2,360 84 2,444 4,228 13,197 17,425
-------- -------- -------- -------- -------- --------
Income from operations 1,616 (84) 1,532 2,650 9,509 12,159
Interest expense, net 266 0 266 460 2,408 2,868
-------- -------- -------- -------- -------- --------
Income before income taxes 1,350 (84) 1,266 2,190 7,101 9,291
Income taxes 514 (9) 505 874 2,777 3,651
-------- -------- -------- -------- -------- --------
Net income before extraordinary item and
cumulative effect of accounting changes 836 (75) 761 1,316 4,324 5,640
Extraordinary item - recapitalization costs 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
Net income before cumulative effect of
accounting changes 836 (75) 761 1,316 4,324 5,640
Cumulative effect of accounting changes 0 0 0 0 0 0
-------- -------- -------- -------- -------- --------
Net income 836 (75) 761 1,316 4,324 5,640
Preferred stock dividends 120 0 120 208 0 208
-------- -------- -------- -------- -------- --------
Net income attributable to common
shareholders 716 (75) 641 $ 1,108 $ 4,324 $ 5,432
======== ======== ======== ======== ======== ========
<FN>
<F1> (1) Represents the historical income statement of WAL for the
fiscal year ended September 30, 1993 as presented in the financial
statements on page F-__.
-8-<PAGE>
<F2> (2) Represents the historical income statement of DFC for the
year ended December 31, 1993 as presented in the financial statements
on page F-__.
<F3> (3) Represents adjustments from UK GAAP to US GAAP as discussed
in footnote 20 to the WAL financial statements on pages F-__ to F-__.
<F4> (4) Converted from British pounds sterling to US dollars using
exchange rates discussed on page __.
</TABLE>
-9-<PAGE>
<TABLE>
<S> <C>
EBITDA percentage calculation:
EBIT at year end 12,159
D&A--Delfield 1,203
D&A--Whitlenge 453
--------
EBITDA at year end 13,815
========
Minimum Earnings 17,000
========
Maximum Earnings 17,500
========
EBITDA percentage minimum 23%
========
EBITDA percentage maximum 27%
========
EPS if contingent shares are issued
Net income... $10,468
Less: additional amortization 209
--------
Adjusted Net Income $10,259
Shares 10,393
--------
Adjusted EPS 0.99
========
</TABLE>
-10-<PAGE>
SCHEDULE 5.8
I. LITIGATION
A. Delfield
--------
1. On April 8, 1993, Delfield received from a contract
specialist at the General Services Administration (the
"GSA") a request for certain information concerning sales
made to the GSA under Delfield's GSA contract which was in
effect from August, 1990 through September, 1992. The GSA
contract required that the GSA be given the benefit of price
reductions granted by Delfield on comparable sales of
equipment to other customers for the Delfield products
included in the Delfield catalog. As a result of a review
of its records, Delfield has paid a refund of $99,397 to the
GSA. Delfield has received no communication from the GSA
indicating whether this matter is now closed.
2. On or about February 5, 1992, a fire (the "Fire") at the
Indianapolis Athletic Club, Indianapolis, Indiana (the
"Hotel") resulted in the death of three persons and serious
injuries to several persons and property damage estimated in
excess of $9 million. The cause of the Fire has not yet
been determined, but there have been allegations that it may
have been caused by a defective refrigerator in the Hotel
manufactured by Delfield or the Delfield Division of Alco
Standard. The lawsuits and claims set forth below have been
filed or asserted against Delfield in connection with this
matter.
a. INDIANAPOLIS ATHLETIC CLUB, INC., PLAINTIFF V. THE
DELFIELD COMPANY AND G.V. AIKMAN, INC., DEFENDANTS,
denominated as Cause No. 49DO29211 CT1253, filed
against Delfield in the Marion County Superior Court,
Indianapolis, Indiana. The complaint asserts
negligence, strict liability and breach of warranty
claims against Delfield arising out of the Fire, and
the complaint alleges that a Delfield refrigerator
Model 406 caused the Fire. The lawsuit seeks damages
in excess of $9 million. Delfield was served with the
Summons and Complaints on November 25, 1992.
A second amended complaint was filed by the
Indianapolis Athletic Club on June 2, 1993 which joined
Alco Standard as a defendant, in addition to Delfield
and G.V. Aikman Co., Inc. Delfield was served with a
second amended complaint on June 2, 1993. The claim
-1-<PAGE>
against Delfield only was dismissed without prejudice
on January 24, 1994.
b. GREGORY P. MUTZ AS INDEPENDENT EXECUTOR OF THE ESTATE
OF THOMAS R. MUTZ, DECEASED, PLAINTIFF V. DELFIELD
COMPANY AND G.V. AIKMAN CO., INC., DEFENDANTS,
denominated as Cause No. 49DO59211 CT12521, filed
against Delfield in the Marion County Superior Court,
Indianapolis, Indiana. The complaint asserts
negligence, strict liability and breach of warranty
claims against Delfield arising out of the Fire, and
the complaint alleges that a Delfield refrigerator
Model 406 caused the Fire. The lawsuit seeks
unspecified damages for the wrongful death of Thomas R.
Mutz. Delfield was served with the Summons and
Complaints on November 30, 1992. A second amended
complaint in this matter was filed on February 7, 1994.
On March 4, 1994, an Order of Dismissal was signed
dismissing Delfield from this matter.
c. JULIE AND SCOTT SCHULER. Delfield received a demand
letter, dated December 3, 1992, on behalf of Julie
Schuler and her husband Scott Schuler. It is alleged
that Julie Schuler was a guest at the Hotel on the day
of the Fire and that she suffered smoke inhalation and
related emotional injuries. Julie Schuler has demanded
$25,000 and Scott Schuler has demanded $5,500 for loss
of consortium. The demand letter states that if Mr.
and Mrs. Schuler commence litigation, damages asserted
in litigation will exceed those sought in the demand
letter.
d. LARRY E. LUTZ, PLAINTIFF V. INDIANAPOLIS ATHLETIC CLUB,
DEFENDANT, denominated as Cause No. 49F089301 CP0127,
filed January 22, 1993 against the Indianapolis
Athletic Club in the Marion County Municipal Court,
Indianapolis, Indiana. The complaint asserts
negligence claims against the Hotel arising out of the
Fire. The lawsuit seeks unspecified compensatory and
punitive damages.
An amended complaint was filed by Mr. Lutz on April 22,
1993 which joined Delfield as a defendant.
e. UNITED STATES FIDELITY AND GUARANTY COMPANY (USF&G) AS
SUBROGEE OF ROBERT B. HUNT, PLAINTIFF V. DELFIELD
COMPANY AND G.V. AIKMAN CO., INC., DEFENDANTS,
denominated as Cause No. 49F019305 CT0837, filed
against Delfield in the Marion County Municipal Court,
Indianapolis, Indiana. The complaint asserts
-2-<PAGE>
negligence claims against Delfield arising out of the
Fire, and the complaint alleges that a Delfield
refrigerator Model 406 caused the Fire. It is alleged
that Mr. Hunt's property was severely damaged by the
Fire. The lawsuit seeks a judgment of $6,511.43.
Delfield was served with the Summons and Complaints on
May 19, 1993.
f. UNITED STATES FIDELITY AND GUARANTY COMPANY (USF&G) AS
SUBROGEE OF MRS. EUGENE C. PULLIAM, PLAINTIFF V.
DELFIELD COMPANY AND G.V. AIKMAN CO., INC., DEFENDANTS,
denominated as Cause No. 49F019305 CT0837, filed
against Delfield in the Marion County Municipal Court,
Indianapolis, Indiana. The complaint asserts
negligence claims against Delfield arising out of the
Fire, and the complaint alleges that a Delfield
refrigerator Model 406 caused the Fire. It is alleged
that Mrs. Pulliam's property was severely damaged by
the Fire. The lawsuit seeks a judgment of $5,503.96.
Delfield was served with the Summons and Complaints on
May 19, 1993.
g. MICHAEL L. SPALDING AND GAYLE SPALDING, TAMMY ANN
COUGAN, AS THE PERSONAL REPRESENTATIVE OF THE ESTATE OF
ELLWOOD GELENIUS, DECEASED, AND ANN COMPARET,
PLAINTIFFS V. INDIANAPOLIS ATHLETIC CLUB, INC.,
DELFIELD COMPANY, G.V. AIKMAN COMPANY, INC., AND ALCO
STANDARD CORPORATION, DEFENDANTS, denominated as Cause
No. 49D079310 CT1116, filed against Delfield in the
Marion County Superior Court, Indianapolis, Indiana.
The complaint asserts negligence and strict liability
claims against Delfield arising out of the Fire, and
the complaint alleges that a Delfield refrigerator
Model 406 caused the Fire. It is alleged that Michael
L. Spalding, Ellwood Gelenius and Ann Comparet were all
fire fighters engaged in fighting the Fire. It is
further alleged that in the Fire, Ellwood Gelenius was
killed and Michael L. Spalding and Ann Comparet
suffered personal injuries. The lawsuit seeks
unspecified damages for the injuries sustained by the
plaintiffs. The complaint was filed on October 26,
1993.
h. BARBARA A. LORENZANO, PERSONAL REPRESENTATIVE OF THE
ESTATE OF JOHN J. LORENZANO, DECEASED, PLAINTIFF V.
INDIANAPOLIS ATHLETIC CLUB, INC., DELFIELD COMPANY,
G.V. AIKMAN COMPANY, INCORPORATED, AND ALCO STANDARD
CORPORATION, DEFENDANTS, denominated as Cause No.
49C019310 CT3507, filed against Delfield in the Marion
County Superior Court, Indianapolis, Indiana. The
-3-<PAGE>
complaint asserts negligence and strict liability
claims against Delfield arising out of the Fire, and
the complaint alleges that a Delfield refrigerator
Model 406 caused the Fire. It is alleged that
plaintiff's decedent, John J. Lorenzano was a fire
fighter involved in fighting the Fire, and was killed
in the Fire. The lawsuit seeks unspecified damages for
the wrongful death of John J. Lorenzano. The complaint
was filed on October 26, 1993.
The LORENZANO complaint has been consolidated with the
SPALDING complaint for the purpose of pre-trial
discovery and motions. Both complaints are now pending
under Cause No. 49D079310 CT1116.
i. HENRY C. KERSEY, BETTY L. KERSEY, JAMES LESLIE AND MARY
LESLIE, PLAINTIFFS V. INDIANAPOLIS ATHLETIC CLUB, INC.,
THE DELFIELD COMPANY, G.V. AIKMAN COMPANY, INC., ALCO
STANDARD CORPORATION, GPD LIMITED, HEATCRAFT, INC.,
LYALL ASSEMBLIES, INC. D/B/A/ LYALL ELECTRIC AND TEXAS
INSTRUMENTS, INC., DEFENDANTS, denominated as Cause No.
49D019402 CPO125, filed against Delfield in the Marion
County Superior Court, Indianapolis, Indiana. The
Complaint asserts negligence and strict liability
claims against Delfield arising out of the Fire, and
the Complaint alleges that a Delfield refrigerator
Model 406 caused the Fire. It is alleged that the
plaintiffs Henry C. Kersey and James Leslie were guests
at the hotel. Betty L. Kersey and Mary Leslie, as
wives of the above-named individuals, are demanding
compensation for loss of consortium. The lawsuit seeks
unspecified damages for the injuries suffered by the
plaintiffs. The Complaint was filed on February 4,
1994.
j. ROTARY CLUB OF INDIANAPOLIS, INC. AND PRO SHOP,
PLAINTIFFS V. GPD LIMITED, TEXAS INSTRUMENTS, INC.,
HEATCRAFT, INC., LYALL ELECTRIC, DELFIELD DIVISION OF
ALCO STANDARD, THE DELFIELD COMPANY, ALCO STANDARD, AND
WHIRLPOOL, DEFENDANTS, denominated as Cause No.
49D019402 2CTO130, filed in Marion County Superior
Court, Indianapolis, Indiana. The Complaint asserts
negligence and strict liability claims against Delfield
arising out of the Fire, and the Complaint alleges that
a Delfield refrigerator Model 406 caused the Fire. It
is alleged that the plaintiffs occupied space in the
hotel and that the Fire caused damage to the
Plaintiffs' property. The lawsuit seeks unspecified
damages for the injuries suffered by the plaintiffs.
The Complaint was filed on February 4, 1994.
-4-<PAGE>
3. ALEXIS GAWIENOWSKI V. DELFIELD/ALCO STANDARD. Complaint
filed February 27, 1991 alleges a trim strip fell from a
Delfield model 9060 case causing multiple head, memory,
motor and emotional losses to plaintiff. Plaintiff has
assigned her rights over to the State of Washington
Department of Health and Labor which is seeking
$1.5 million.
4. TORY L. PURKEY V. DELFIELD COMPANY AND SCRUGGS, INC. This
complaint, filed October 6, 1992, alleges Mr. Purkey
suffered facial injury when bowls were ejected from a dish
dispenser. He seeks $200,000 damages. On October 9, 1992
Delfield responded to Mr. Purkey's attorney requesting the
serial number or other identification of the alleged faulty
equipment, so as to determine whether the alleged claim is a
liability of Delfield or of Alco Standard. As of December
31, 1993, Delfield has not received a response to its
inquiry. Delfield has forwarded the claim to Alco Standard.
5. COMMONWEALTH V. DELFIELD. This subrogation claim, filed in
October, 1992, alleges a Delfield model 6151 freezer caused
a fire in November, 1990 at a Kentucky Fried Chicken insured
by the plaintiff. Commonwealth seeks to recover $250,000 of
alleged loss. Claim is in discovery. Alco Standard has
assumed liability for this claim under the terms of the
Purchase and Sale of Assets Agreement, dated as of March 20,
1991.
6. YOUNG & YOUNG V. DELFIELD/ALCO STANDARD. A complaint filed
on August 27, 1993, alleged a Delfield model 2472
Refrigerated Equipment Stand tipped over spilling hot oil on
the plaintiff. The claim is for an amount exceeding
$10,000.
7. TERESA DEAK V. STORE ENGINEERING, WELLS MANUFACTURING AND
DELFIELD/ALCO STANDARD. Claim filed November 1, 1990
alleges a Delfield model 24102 Equipment Stand was involved
in the plaintiff sustaining burns about her ankles. The
suit is for an unspecified sum.
8. MICHAEL LARRANAGA V. DELFIELD. Complaint filed May 5, 1993
alleges plaintiff received burns when a Delfield model 2472
Low Profile Equipment Stand supporting three deep fryers
tipped over burning the plaintiff about legs and upper body.
Claim is for an unspecified amount.
9. RYKOFF-SEXTON. On July 23, 1991, Delfield shipped a job
for Southern Connecticut State University via Rykoff-Sexton.
A dispute arose over the fit of Delfield equipment to the
-5-<PAGE>
job site. Rykoff-Sexton refused to pay Delfield and alleges
that the general contractor refused to pay Rykoff-Sexton.
Discovery led to a history of the general contractor, Valley
View Construction, failing to compensate suppliers. On
September 17, 1992, Delfield filed a claim against Fidelity
& Guaranty Insurance Company, bonding agent for Valley View.
On November 25, 1992, Fidelity & Guaranty offered to place a
sum approximating Delfield's claim in escrow pending
resolution of the matter of non-payment to Rykoff-Sexton, if
Delfield would drop its suit against the bonding company.
Delfield's response is pending a more precise definition of
the terms of the proposed escrow account.
10. Delfield has received a letter from James T. Otenbaker
requesting clarification of the term for the payment of
royalties under the Agreement, dated October 26, 1982, as
amended, among Oxford Air Systems, Inc., Oxford Air
Products, Inc., James T. Otenbaker, Frederick L. Fritz and
Ralph Daigle and Delfield (pursuant to an assignment by Alco
Standard). Delfield is currently investigating whether the
term for payment of royalties expires January 1996 or
January 2001. No formal proceeding has been instituted.
B. Whitlenge
---------
1. SEE Schedule 5.17(b)B, item 1.
2. Pepsi-Cola GmbH of Germany is refusing to pay Whitlenge
(pounds) 94,255.20 which Whitlenge considers is due to it in
respect of goods supplied to Pepsi-Cola GmbH. Pepsi Cola
GmbH alleges that the products supplied were defective.
Whitlenge has written off (pounds) 64,000 against the amount
due from the customer. The balance owing has not yet been
paid.
3. Prior to August 1993 Whitlenge undertook a program to
replace certain faulty lighting units previously supplied by
it, at a cost of approximately (pounds) 54,000. However,
the replacement units are also faulty and must themselves be
replaced. The supplier, Kendo Electronics Limited, has
agreed to issue Whitlenge with replacement units free of
charge and also to provide the labor necessary to carry out
the installation of these further replacement units free of
charge. The management take the view that the second
replacement units will be installed at no cost to Whitlenge.
However, Whitlenge believes that the primary liability to
replace these units, in the eyes of the customer, remains
with Whitlenge.
-6-<PAGE>
C. Industries
----------
1. On March 26, 1993, Remcor Products Company ("Remcor") filed
a lawsuit against Group and Booth in the United States
District Court for the Northern District of Illinois. In
its Complaint, Remcor alleged that certain ice/drink
dispensers made and sold by Group and Booth infringe a
patent owned by Remcor relating to a cold plate system. The
Complaint seeks an unspecified amount of compensatory
damages, treble damages for willful infringement,
prejudgment interest and attorneys' fees, and also a
permanent injunction from further alleged acts of
infringement. During the course of discovery, Remcor has
asserted that it has suffered damages attributable to the
alleged infringement of approximately $8.24 million during
the period from 1989 through year-end 1993, exclusive of
treble damages, prejudgment interest and attorneys' fees.
This damages claim consists of claims for lost profits and a
royalty on certain sales.
Each of Group and Booth has denied that any of its products
infringe Remcor's patent and has asserted that the Remcor
patent is invalid and unenforceable. Each also has strongly
disputed Remcor's contention that it is appropriate to apply
a lost profits measure of damages in this case and contended
that, even assuming infringement, validity and
enforceability of the patent, the amount of compensatory
damages for sales occurring through year-end 1993 would be a
royalty of approximately $500,000.
2. On July 1, 1993, Jerome P. Heilweil, the landlord of the
facility which housed Group's former Glenco-Star division,
filed a lawsuit against Group and against Glenco Star
Corporation, the current tenant of the facility, in the
United States District Court for the Eastern District of
Pennsylvania. In the Complaint, the landlord alleged that
the defendants violated the lease by failing to obtain the
landlord's consent to the assignment of the lease to Glenco
Star Corporation in September, 1992, by failing to make
approximately $600,000 in maintenance and repairs to the
facility and by making alterations to the property without
the landlord's consent. The Complaint seeks the recovery of
damages in an amount sufficient to perform the alleged
repair and maintenance obligations, and a declaration that
the landlord may accelerate the rent and regain possession
of the property before the lease expires in August, 1996.
The plaintiff and Group have agreed to submit plaintiff's
claim that Group is responsible for damages in an amount
-7-<PAGE>
equal to the cost of making certain required maintenance and
repairs as a result of Group's alleged breach of certain
lease obligations to binding arbitration before the American
Arbitration Association (the "AAA"). To date, there have
been no proceedings before the AAA and an Arbitrator has not
yet been selected. Glenco Star Corporation filed a Chapter
11 bankruptcy petition on March 22, 1994 and will not,
therefore, be a party to the arbitration proceeding.
Although Group, along with Glenco Star Corporation, remains
obligated to the landlord for the performance of lease
obligations, Group believes that the landlord's consent to
the assignment of the lease was not required, that the
landlord could not have withheld consent to the assignment
even if consent had been required, that the tenant's
obligations to maintain and repair the facility under the
lease have been met, and that the landlord approved any
alterations made by Group which required the landlord's
approval. Group intends to vigorously defend its position
in the lawsuit and arbitration proceeding.
SEE Schedule 5.17(a), item C.2., for other developments
relating to the Glenco-Star lease.
3. Certain Governmental Matters.
----------------------------
a. Group has filed a report with the U.S. Consumer Product
Safety Commission ("CPSC") pursuant to Section 15(b) of
the Consumer Product Safety Act in connection with
certain Scotsman Model DC33 home ice cube machines.
Group has advised the CPSC of its intention to
voluntarily undertake a notice and retrofit program
with respect to these machines. Group does not believe
this matter could reasonably be expected to have a
Material Adverse Effect.
b. The General Services Administration (the "GSA") is
currently engaged in an audit with respect to a
government contract in an amount in excess of $100,000
between the federal government and Group whereby Group
supplied ice machines. The GSA has not notified Group
of any claims arising from this audit. Group does not
believe this matter could reasonably be expected to
have a Material Adverse Effect.
II. MATERIAL CONTINGENT OBLIGATIONS: SEE Guaranties listed on
Schedule 5.18.
-8-<PAGE>
SCHEDULE 5.9
Capitalization
A. Pro forma capitalization as of 4/3/94 (end of Scotsman's first
------------------------------------------------------------
fiscal quarter)<F1>
---------------
<TABLE>
<CAPTION>
<S> <C>
Short-Term Debt (including current $11,280
portion of long-term debt and
capitalized leases)
Long-term debt and non-current portion $84,660
of capitalized lease obligations
Stockholders' equity $73,994<F2>
Total capitalization: $169,934
(Total debt & equity)
</TABLE>
B. Subsidiaries (as of April 29, 1994 and immediately after
--------------------------------------------------------
giving effect to the Merger and Acquisition)<F3>
--------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
Jurisdiction of
Name of Subsidiary Organization Owner (100%)
------------------ ------------ ------------
1. Scotsman Group Inc. Delaware Scotsman Industries,
<F1> Includes the balance sheets of Scotsman Industries, Inc.
and its subsidiaries as of April 3, 1994, and DFC and WAL as of
March 31, 1994.
<F2> 1.2 million shares of common stock estimated to be issued
at $12.50 per share.
<F3> It is presently anticipated that the Subsidiaries will be
restructured within twelve (12) months of the execution of the
Agreement such that (a) DFC Holding Corporation becomes a Subsidiary
of Scotsman Group, Inc., (b) Whitlenge Drink Equipment Limited and
Whitlenge N.V. become Subsidiaries of Scotsman Drink Limited and (c)
Whitlenge Acquisition Limited is liquidated.
-1-<PAGE>
Inc.
2. DFC Holding Delaware Scotsman Industries,
Corporation Inc.
3. The Delfield Delaware DFC Holding Corporation
Company
4. Booth, Inc. Texas Scotsman Group Inc.
5. Frimont S.p.A. Italy Scotsman Group Inc.
6. Castel MAC S.p.A Italy Scotsman Group Inc.
7. Scotsman Drink United Kingdom Scotsman Group Inc.
Limited
8. Whitlenge United Kingdom Scotsman Drink Limited
Acquisition Limited
9. Whitlenge Drink United Kingdom Whitlenge Acquisition
Equipment Limited Limited
10. Whitlenge N.V. Belgium Whitlenge Drink
Equipment Limited
</TABLE>
-2-<PAGE>
SCHEDULE 5.10
ERISA
1. Single Employer Plans:
a. Salaried Pension Plan of Scotsman Group, Inc.
b. Booth, Inc. Hourly-Rated Employees Pension Plan
c. Fairfax Hourly-Rated Employees Pension Plan
d. Delfield Hourly-Rated Employees Pension Plan
2. As of December 31, 1993, to the best knowledge of Industries,
each plan listed in item 1 has Unfunded Liability approximately
equal to the amounts set forth below:
<TABLE>
<CAPTION>
Plan Amount of Unfunded Liability
---- ----------------------------
<S> <C>
a. Salaried Pension Plan of Scotsman Group, Inc. -0-
b. Booth, Inc. Hourly-Rated Employees Pension Plan $ 3,000
c. Fairfax Hourly-Rated Employees Pension Plan $ 31,000
d. Delfield Hourly-Rated Employees Pension Plan $484,000
3. Within the last five years, sponsorship of the Glenco - Star
Hourly-Rated Employees Pension Plan, a plan with an Unfunded
Liability of $ 40,000 at the date of the transfer (September 30,
1992), was transferred out of the Controlled Group.<PAGE>
SCHEDULE 5.17(a)
Owned and Leased Properties
A. Delfield
--------
1. Security interest granted in all right and title to the
lease and certain proceeds under the lease and indenture,
granted pursuant to a Trust Indenture, dated as of August 1,
1981, between The Industrial Development Board of the Town
of Covington and First Tennessee Bank, N.A., relating to The
Industrial Development Board of the Town of Covington
Industrial Revenue Bonds (Litton Industries, Inc. Project)
Series 1981.
2. Security interest granted in all right and title to the
construction fund created pursuant to a Loan Agreement,
dated as of August 1, 1983, between Delfield and The
Economic Development Corporation of the County of Isabella,
relating to The Economic Development Corporation of the
County of Isabella Economic Development Revenue Bonds (The
Delfield Company Project).
3. With respect to the two parcels of property located in Union
Township, Isabella County, Michigan, Delfield's Title
Insurance Policy, dated May 7, 1991, does not insure against
the following:
a. 50% of all oil, gas and other minerals, and all rights
pertinent thereto, as to Parcel 2;
b. An additional possible outstanding mineral interest, as
evidenced of record in Liber 508, page 335, and
subsequent instruments, as to Parcel 2;
c. An encroachment on the premises by structures
purportedly belonging to owners of premises adjoining
on the east; and
d. An unrecorded oil, gas, and mineral lease -- between
Delfield and John T. Stolker, dated March 1987, as to
Parcel 1.
4. Security interest granted in all right and title to certain
equipment and proceeds under the lease and indenture,
granted pursuant to an Indenture and Security Agreement,
dated as of September 1, 1984, between The Industrial
Development Board of the Town of Covington and NCNB National
Bank of North Carolina, relating to The Industrial
Development Board of the Town of Covington Industrial
Revenue Bonds (Alco Standard Foodservice Equipment Company
Project) Series 1984.
-1-<PAGE>
5. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated May 2, 1990, showing Pitney Bowes Credit
Corporation as secured party and The Delfield Company as
debtor, covering certain copier equipment.
6. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated October 4, 1991, showing Machine Tool
Finance Corporation as secured party and The Delfield
Company as debtor, covering certain leased equipment.
7. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated November 13, 1991, showing GTE Leasing
Corp. as secured party and The Delfield Company as debtor,
covering certain leased telephone switch and related
equipment.
8. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated June 15, 1992, showing U.S. Leasing
International as secured party and DFC Holding Co. and The
Delfield Company as debtors, covering certain leased Digital
Computer Equipment.
9. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated August 14, 1992, showing Commercial
Equipment Co. as secured party, Old Kent Bank as assignee,
and The Delfield Company, as debtor, covering certain Lanier
copier equipment.
10. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated May 26, 1993, showing Stiles Machinery,
Inc. as secured party and Delfield Company as debtor,
covering one Heian CNC Router.
11. UCC-1 Financing Statement filed with the Secretary of State
of Tennessee, dated July 18, 1991, showing Murata Wiedemann,
Inc. as secured party, Machine Tool Finance Corporation as
assignee, and The Delfield Company as debtor, covering
certain leased equipment.
12. UCC-1 Financing Statement filed with the Secretary of State
of Tennessee, dated January 7, 1992, showing Machine Tool
Finance Corporation as secured party and The Delfield
Company as debtor, covering certain leased equipment.
B. Whitlenge
---------
1. Some of Whitlenge's suppliers' standard terms of supply
contain retention of title provisions.
-2-<PAGE>
2. Encumbrances and easements contained or referred to in the
documents of title of the real property of Whitlenge.
-3-<PAGE>
UNIT 8, HALESOWEN INDUSTRIAL PARK, CHANCEL WAY,
HALESOWEN, WEST MIDLANDS
</TABLE>
<TABLE>
<CAPTION>
Date Document Parties
---- -------- -------
<C> <C> <C>
23.6.80 Head Lease (with Memorandum endorsed 17th William Whittingham Industrial Development
October 1986) (Halesowen) Limited and Heron Motor Group Limited
10.4.85 License to Sub-let Goodwill Nominees Limited, Heron Motor Group Limited
and Wilmid Industries Limited
20.5.85 Underlease (and copy letter of Heron Motor Group Limited and Wilmid Industries
21/12/1992) Limited
Undated Copy Land Certificate Title No. WM202843
19.9.78 Wayleave Agreement William Whittingham Industrial Development
(Halesowen) Ltd and The Midlands Electricity Board
9.3.1988 Copy Certificate of Incorporation on Wilmid Industries Limited to Wilmid Public Limited
change of name Company
24.7.92 Coal Search Dudley Metropolitan Borough Council
6.22.92 Local Authority Search No. 6298/92 (See
Unit 9)
18.12.92 Land Charges Act Search No. V4112353
Land Charges Act Search No. R9011014
14.1.92
3.2.93 License to Assign Venaglass Limited, Brackhurst Limited, Wilmid Public
Limited Company and Whitlenge Drink Equipment
Limited
3.2.93 Assignment (and Notice of Assignment in Wilmid Public Limited Company (1) Whitlenge Drink
duplicate) dated 17/2/93 Equipment Limited
26.5.93 License for Alterations Venaglass Limited, Brackhurst Limited and Whitlenge
Drink Equipment Limited
20.12.93 Office Copies WM 194248
20.12.93 Office Copies WM 202843
UNIT 9 HALESOWEN INDUSTRIAL PARK, HALESOWEN, WEST MIDLANDS
Date Document Parties
---- -------- -------
-4-<PAGE>
17.7.81 Head Lease Goodwill Nominees Limited, William Whittingham
Industrial Development (Halesowen) Limited and
William Whittingham (Holdings) Limited
2.3.83 Under Lease (with Memorandum endorsed William Whittingham Industrial Development
31.10.91) (Halesowen) Limited and Davies Brook & Co Limited
25.1.82 Copy Land Certificate. Title No.
WM228401
22.11.83 Copy Land Certificate. Title No.
WM281715
2.11.92 Office Copies. Title No. WM281715
6.11.92 Local Authority Search No. 6298/92 Dudley Metropolitan Borough Council
(Applies to Unit 8 as well)
11.1.93 License to Assign Venaglass Limited, Industrial Development
(Halesowen) Limited, Davies Brook & Co Limited and
Whitlenge Drink Equipment Limited
11.1.93 Assignment (and Notice of Assignment in Davies Brook & Co Limited (1) and Whitlenge Drink
duplicate dated 21.1.1993) Equipment Ltd (2)
3.2.93 License for Alterations Venaglass Limited, Industrial Development
(Halesowen) Limited and Whitlenge Drink Equipment
Limited
5.2.93 Land Certificate Title No. WM281715
20.12.93 Office Copies WM 194248
20.12.93 Office Copies WM 228401
UNITS 10,11 AND 12 HALESOWEN INDUSTRIAL PARK, CHANCEL WAY,
HALESOWEN, WEST MIDLANDS
Date Document Parties
---- -------- -------
9.8.79 Lease William Whittingham Industrial Development
(Halesowen) Limited and Gardner Steel Limited
15.10.82 Local Land Charges Search No. 6637/82 Dudley District Council
20.12.82 License Goodwill Nominees Limited and Gardner Steel Limited
12.01.83 Notice of Assignment Gardner Steel Limited and Whitlenge Drink Equipment
Limited
21.03.83 Consent to Dealing Barclays Merchant Bank Limited
17.5.83 Land Certificate Title Number WM273135
18.7.84 Local Land Charges Search No. 4556/84 Dudley Metropolitan Borough Council
-5-<PAGE>
27.11.84 License Goodwill Nominees Limited and Whitlenge Drink
Equipment Limited
22.2.85 Deed Goodwill Nominees Limited Whitlenge Drink Equipment
Limited
16.02.90 Rent Review Memorandum William Whittingham Industrial Development
(Halesowen) Limited and Gardner Steel Limited
21.11.91 License for Alterations Venaglass Limited and Whitlenge Drink Equipment
Limited
3.2.93 License for Alterations Venaglass Limited and Whitlenge Drink Equipment
Limited
20.12.93 Office Copies WM 194248
UNIT 13, HALESOWEN INDUSTRIAL PARK, CHANCEL WAY, HALESOWEN,
WEST MIDLANDS
Date Document Parties
---- -------- -------
Oct 1978 Letting Plan No. 5630.57.A
7.12.78 Replies to Enquiries Before Contract
25.5.79 Copy of Bond William Whittingham Industrial Development
(Halesowen) Limited and Phoenix Assurance Company
Limited
25.5.79 Copy of Duplicate Agreement The Borough Council of Dudley (1) William
Whittingham Industrial Development (Halesowen)
Limited (1)
7.8.79 Local Land Charges Search No. 5034/79
10.10.79 Company Search No. S77990
30.10.79 Lease William Whittingham Industrial Development
(Halesowen) Limited and Whitlenge Drink Equipment
Limited
13.11.79 Office Copy entries to Title Number
WM172860
23.10.75 Office Copy Entry of Agreement and William Whittingham Industrial Development
Consent (Halesowen) Limited and The Midlands Electricity
Board
28.9.78 Office Copy Entry of Agreement and As above
Consent 18.6.84 Local Land Charges Search No. 455/84 Dudley
Metropolitan Borough Council
Undated Site Plan No. 5630/50/A
-6-<PAGE>
22.11.91 License Venaglass Limited and Whitlenge Drink Equipment
Limited
Undated Insurance Policy No. 917F627238 Sun Alliance Insurance Group
18.11.93 Notice of Disrepair (together with copy Venaglass Limited
correspondence referred to in the Notice)
20.12.93 Office Copies WM 194248
</TABLE>
3. The landlord of Unit 13, Chancel Way, Halesowen, has
received a survey report which reveals a small structural
defect which has been caused by subsidence on this part of
the Leased Real Property. If the repair costs are not
covered by the landlord's insurance policy, the landlord has
notified Whitlenge that it will wish to recover from
Whitlenge the repair costs pursuant to the terms of the
lease. Management estimates that the repairs would cost
between (pounds) 10,000 and (pounds) 15,000. This is the
figure which has been estimated by the landlord's surveyors.
4. Rental agreement dated 15th January 1993 relating to
Whitlenge N.V.'s property in the Benelux Businesscenter
Boomes Steenweg 690 2610 Antwerp (in Flemish). Whitlenge
N.V. is continuing to occupy the said property pursuant to
that agreement and the rental of 56,500 Belgian Francs per
month under that agreement has continued to be paid by
Whitlenge N.V. No other documentation is available at this
time in relation to the Antwerp property and therefore the
property is subject to all matters at the date hereof which
are subsisting and capable of taking effect on the property
howsoever created.
-7-<PAGE>
C. Industries
----------
1. UCC-1 Financing Statement filed with the Secretary of State
of Illinois, dated January 28, 1991, showing Hewlett Packard
Company as secured party and Scotsman Industries, Inc. as
debtor, covering certain leased computer equipment.
2. In September, 1992, Group transferred the assets of its
Glenco-Star division to a wholly-owned subsidiary, Glenco
Star Corporation ("Glenco"), and sold the stock of Glenco to
Glenco Holdings, Inc. Glenco assumed Group's obligations
under a lease for a 275,000 square foot facility in
Philadelphia which expires August, 1996. Although Group was
not released from its obligations to the landlord under the
lease, Glenco Holdings, Inc. furnished Group with a letter
of credit in the amount of $ 1.5 million under which the
issuer of the letter of credit is obligated to reimburse
Group for the amount of any rent payments made by Group to
the landlord under the lease after August 1, 1994.
Glenco defaulted in its obligation to make its February,
March and April, 1994 rent payments to the landlord under
the lease and has filed for bankruptcy under Chapter 11 of
the federal Bankruptcy Act. Upon notice of each of the
defaults, Group made a monthly rent payment in the amount of
$ 57,298 due to the landlord under the lease. Group also
remains obligated for certain real estate tax payments and
other payments due under the lease if Glenco should fail to
comply with such payment obligations. In April, 1994, Group
paid approximately $ 68,696 in real estate taxes pursuant to
the terms of the lease after receipt of notice that Glenco
had failed to make such payments. Industries has set up a
reserve to cover the remaining monthly rent payments to be
made until August 1, 1994, when it anticipates that it will
be able to draw upon the letter of credit. SEE ALSO
Schedule 5.8, item C.2. for other developments relating to
the Glenco-Star lease.
3. Industries' Form 10-K filing for the Fiscal Year ended
January 2, 1994 states that Industries has facilities
located in Fairfax, South Carolina, consisting of a 247,000
square foot plant built in 1980 and an 80,000 square foot
separate warehouse which secure Industrial Development
Revenue Bonds ("Bonds") of $ 9.25 million. In addition,
pursuant to the Reimbursement Agreement between Group and
the issuer (the "L/C Bank") of the letter of credit
supporting obligations due under the Bonds, Group has
granted a lien to the L/C Bank in certain Bonds redeemed
-8-<PAGE>
with proceeds from the letter of credit and all proceeds
thereof.
D. Group
-----
1. UCC-1 Financing Statement filed with the Secretary of State
of Illinois, dated May 6, 1991, showing Hewlett Packard
Company, as secured party and Scotsman Group, Inc. as
debtor, covering certain leased computer equipment.
E. Booth
-----
1. UCC-1 Financing Statement filed with the Secretary of State
of Texas, dated December 2, 1993, showing Foam Supplies,
Inc. as secured party and Booth - Crystal Tips Ice Systems
as debtor, covering certain solventless urethane dispensing
units.
2. Booth has entered into a lease dated April 16, 1993,
relating to certain real property located in Dallas, Texas
which includes, to secure sums due under the lease, a grant
to the lessor of a security interest in Booth's property
located at the leased premises and the proceeds and products
thereof. No UCC financing statement with respect to this
security interest has been executed by Booth and filed with
the Texas Secretary of State.
-9-<PAGE>
SCHEDULE 5.17(b)
A. Delfield
--------
1. Agreement, dated October 26, 1982, as amended, among Oxford
Air Systems, Inc., Oxford Air Products, Inc., James T.
Otenbaker, Frederick L. Fritz and Ralph Daigle and Delfield
(pursuant to an assignment by Alco Standard), relating to
the payment of royalties to Messrs. Otenbaker, Fritz and
Daigle. Delfield has received a letter from Mr. Otenbaker
requesting clarification of the term for payment of
royalties under this agreement. Delfield is currently
investigating whether the term for payment of royalties
expires January 1996 or January 2001. No formal proceeding
has been instituted.
B. Whitlenge
---------
1. Whitlenge's application for a patent in respect of its post
mix soft drink dispensing system has recently been granted.
The patent becomes effective following publication in the
Official Journal (Patents) which is scheduled for May 11,
1994. The registered number is 2247848. Whitlenge has
given preliminary instructions to its patent agent yo file
an application for a patent in the United Kingdom relating
to a liquid meter device. No application has been made to
date.
Under section 40 of the UK Patents Act 1977, employees may,
under certain circumstances, be entitled to claim
compensation for patentable inventions discovered or created
by them. Such compensation is usually small. To date no
employees have made a claim for compensation under the
Patents Act.
2. Due to copying of an existing tower design a decision was
made not to pursue registration of the design at that time.
The specific product involved was the "waverley" tower which
was designed for the Coca-Cola bottler in Great Britain.
The bottler took the view that their business would be
better served by copying the Whitlenge design using a local
sub-contracting company. Whitlenge took the view that any
challenge to this decision would be detrimental to
continuing business with this major customer, and therefore
abandoned the registration procedure for this product.
-1-<PAGE>
3. In the normal course of business Whitlenge Acquisition,
Whitlenge or Whitlenge N.V. have procured the creation of
certain works in which copyright may subsist. However, no
formal assignment of any such copyright has been entered
into.
C. Industries:
----------
1. SEE Schedule 5.8, item C.1.
-2-<PAGE>
SCHEDULE 5.18
Indebtedness
------------
<TABLE>
<CAPTION>
Amount of
Principal
Outstanding
as of
Obligor Indebtedness Under 4/29/94
------- ------------------ -----------
<C> <C> <C>
A. Industries: 1. Guaranty under that certain Amended and Restated Note Purchase Agreement N/A
---------- dated as of April 29, 1994 among Industries, Group and certain investors
(the "A&R NPA")
2. Guaranty Agreement dated July 1, 1993 made by Industries in favor of N/A
Comerica Bank-Illinois.
3. Guaranty to the State of Michigan Self-Insurance Authority, dated as of N/A
April 29, 1994, relating to claims arising under Michigan's Workers'
Disability Act of 1969 against Delfield's Self-Insurance Program.
4. Guaranty of Group's obligations in that certain Reimbursement Agreement N/A
dated as of March 1, 1988, as amended, in favor of the issuer of the
standby letter of credit issued to support payment of the Allendale
County, South Carolina, Industrial Revenue Bonds.
B. Group: 1. The A&R NPA. $ 20,000,00
-----
2. Loan Agreement dated as of March 1, 1988 between Allendale County, South $ 9,250,000
Carolina and King-Seeley Thermos Co. (Group's predecessor in interest)
regarding Industrial Revenue Refunding Bonds, Series 1988 (the
"Allendale Bonds")
3. $5,000,000 Line of Credit with Comerica Bank-Illinois -0-
4. Interest Rate Swap Transaction between Group and First National Bank of N/A
Chicago pursuant to an Amended Confirmation, dated March 3, 1994.
5. Computer Equipment Lease $ 270,000
6. Guaranty of payment and performance, dated April 8, 1993, given by Group N/A
to The Western and Southern Life Insurance Company, with respect to the
lease of certain property to Booth.
7. Tax Sharing Indemnification Agreement, between Household International, N/A
Inc. and Group, dated April 14, 1989.
C. Castel MAC 1. Castel MAC maintains various lines of credit with one or more Italian -0-
---------- banks from time to time.
-1-<PAGE>
D. Frimont 1. Frimont maintains various lines of credit with one or more Italian banks $ 4 million
------- from time to time. (approx.)
2. Capitalized leases for certain machinery and equipment $ 38,000
(approx.)
E. Booth 1. Guaranty under A&R NPA N/A
-----
F. Delfield 1. The lease and indenture, granted pursuant to a Trust and Indenture, $ 3,150,000
-------- dated as of August 1, 1981, between The Industrial Development Board of
the Town of Covington and First Tennessee Bank, N.A., relating to The
Industrial Development Board of the Town of Covington Industrial Revenue
Bonds (Litton Industries, Inc. Project) Series 1981.
2. Delfield has assumed all the liabilities and obligations of Alco N/A
Standard Corporation ("Alco") with respect to the Guaranty, Purchase and
Indemnification Agreement, between Alco and NCNB National Bank of North
Carolina, dated November 2, 1984 (relating to the Series 1981 Industrial
Revenue Bonds).
3. Delfield has assumed all the liabilities and obligations of Alco with N/A
respect to the Guaranty, Purchase and Indemnification Agreement, between
Alco and Litton Industries, Inc., dated November 2, 1984 (relating to
the Series 1981 Industrial Revenue Bonds).
4. Loan Agreement, dated as of August 1, 1983, between Delfield and The $ 600,000
Economic Development Corporation of the County of Isabella, relating to
The Economic Development Corporation of the County of Isabella Economic
Development Revenue Bonds (The Delfield Company Project) (the "Isabella
Bonds").
5. Guaranty by Alco, dated as of August 1, 1983 (relating to the Isabella N/A
Bonds).
6. The lease and indenture, granted pursuant to an Indenture and Security N/A
Agreement, dated as of September 1, 1984, between The Industrial
Development Board of the Town of Covington and NCNB National Bank of
North Carolina, relating to The Industrial Revenue Bonds Series 1984
(Alco Standard Foodservice Equipment Company Project) (the "Series 1984
Bonds").
7. Guaranty and Indemnification Agreement, between Alco and NCNB Bank of N/A
North Carolina, dated as of September 1, 1984 (relating to the Series
1984 Bonds).
8. Standby letter of Credit Application and Reimbursement and Security $ 500,000
Agreement dated May 18, 1992 between Delfield and NBD Bank, N.A., (face
relating to a standby letter of credit issued in favor of the State of amount)
Michigan Bureau of Workers' Disability Compensation.
8. Guaranty under A&R NPA. N/A
-2-<PAGE>
9. Machine Tool Finance Corporation Capital Lease re: Centrum 3000 Turret $127,027.89
Punch Press. /yr
10. United States Leasing Corporation Capital Lease re: DEC VAX 4000 $226,618.05
(15 pymts @
$15,107.89
/yr)
G. DFC 1. Guaranty under A&R NPA. N/A
---
H. Whitlenge 1. Letter Agreement dated April 7, 1992 with Bank of Scotland Treasury N/A
--------- Services Plc re: interest rate cap
2. Guarantee for Payment of sums due to the Commissioners of H.M. Customs (pounds)
and Excise Service. 55,000
</TABLE>
-3-<PAGE>
SCHEDULE 5.22
Environmental Matters
---------------------
NONE<PAGE>
SCHEDULE 5.23
Insurance
---------
A. DELFIELD:
1. Policies:
<TABLE>
<CAPTION>
(Thousands of Dollars)
-------------
Effective Termina-
Coverage Broker Carrier Policy No. Limit Deductible Date ion Date
-------- ------ ------- ---------- ----- ---------- --------- --------
<C> <C> <C> <C> <C> <C> <C> <C>
Property MM American Home* MPS ONT 2888 10,000 JJ 04/30/91 10/15/91
MM Reliance Insurance Company* MPS ONT 2888 6,250 04/30/91 10/15/91
MM Simcoe Erie Group* MPS ONT 2888 5,000 04/30/91 10/15/91
MM Gerling Global Insurance Company* MPS ONT 2888 3,750 04/30/91 10/15/91
MM Royal Insurance Company* MPS ONT 2888 37,500 04/30/91 10/15/91
MM Halifax Insurance Company* MPS ONT 2888 15,000 04/30/91 10/15/91
MM Gerling Global Insurance Company* MPS ONT 2888 15,000 04/30/91 10/15/91
MM Simcoe Erie Group* MPS ONT 2888 7,500 04/30/91 10/15/91
-------
MM Total* - (4/30/91 - 10/15/91) 100,000 10 04/30/91 10/15/91
MM American Home* MPS ONT 2888 10,000 10/15/91 10/31/92
MM Reliance Insurance Company* MPS ONT 2888 6,250 10/15/91 10/31/92
MM Gerling Global Insurance Company* MPS ONT 2888 7,500 10/15/91 10/31/92
MM New Hampshire Insurance Company* MPS ONT 2888 1,250 10/15/91 10/31/92
MM Royal Insurance Company* MPS ONT 2888 37,500 10/15/91 10/31/92
MM Gerling Global Insurance Company* MPS ONT 2888 22,500 10/15/91 10/31/92
MM Simcoe Erie Group* MPS ONT 2888 15,000 10/15/91 10/31/92
MM CIGNA Insurance Company* MPS ONT 2888 50,000 10/15/91 10/31/92
-------
MM Total* - (10/15/91-10/31/92) 150,000 10 10/15/91 10/31/92
AA CIGNA Insurance Company 50,000 10/31/92 10/31/93
AA Royal Insurance Company 37,500 10/31/92 10/31/93
AA Gerling Global Insurance Company 18,750 10/31/92 10/31/93
AA Simcoe & Erie 18,750 10/31/92 10/31/93
AA Simcoe & Erie 3,000 10/31/92 10/31/93
-1-<PAGE>
AA Gerling Global Insurance Company 3,750 10/31/92 10/31/93
AA Commonwealth (Reandex) 4,500 10/31/92 10/31/93
AA St. Paul 3,750 10/31/92 10/31/93
AA American Home 4,000 10/31/92 10/31/93
AA Commerce & Industry 2,500 10/31/92 10/31/93
AA Gerling Global Insurance Company 2,500 10/31/92 10/31/93
AA Commonwealth (Reandex) 1,000 10/31/92 10/31/93
-------
AA Total - (10/31/92 - 10/31/93) 150,000 25 10/31/92 10/31/93
AA CIGNA Insurance Company 50,000 10/31/93 10/31/94
AA Royal Insurance Company 37,500 10/31/93 10/31/94
AA Gerling Global General Ins. Co. 18,750 10/31/93 10/31/94
AA Simcoe & Erie General Ins. Co. 18,750 10/31/93 10/31/94
AA Aetna Casualty & Surety 6,250 10/31/93 10/31/94
AA Commerce & Industry/AIG 6,250 10/31/93 10/31/94
AA St. Paul Fire & Marine 5,000 10/31/93 10/31/94
AA Marine Office of America 3,750 10/31/93 10/31/94
AA Allianz Insurance Co. 2,500 10/31/93 10/31/94
AA Gerline Global General Ins. Co.
Aetna Casualty & Surety 1,250 10/31/93 10/31/94
-------
AA Total (10/31/93 - 10/31/94) 150,000 25 10/31/93 10/31/94
Machinery MM Lumbermens Mutual Casualty Company* 3XL119640-02 50,000 25 04/30/91 10/15/91
MM Lumbermens Mutual Casualty Company* 3XL119640-03 50,000 25 10/15/91 11/15/92
AA Federal Insurance Company (Chubb) 100,000 25 11/15/92 10/31/93
AA Federal Insurance Company (Chubb) 100,000 25 10/31/93 10/31/94
Excess
Liability MM Chubb Insurance Co.* 79099721 5,000 04/30/91 10/15/91
MM Chubb Insurance Co.* 79078223 10,000 04/30/91 10/15/91
MM Chubb Insurance Co.* 79078221 10,000 04/30/91 10/15/91
MM Reliance Insurance Company* 7001514 5,000 04/30/91 10/15/91
MM Reliance Insurance Company* 7001236 10,000 04/30/91 10/15/91
MM Royal Insurance Co.* 60191898 5,000 04/30/91 10/15/91
MM Zurich Insurance Co.* 8802994 10,000 04/30/91 10/15/91
MM CIGNA Insurance Co.* XCP007159 25,000 04/30/91 10/15/91
MM New Hampshire Insurance Co.* 5460150 2,000 04/30/91 10/15/91
MM Canadian General Ins. Co.* IE15128 12,000 04/30/91 10/15/91
MM Continental Insurance Co.* CX3593633 10,000 04/30/91 10/15/91
-2-<PAGE>
MM Guardian Insurance Co.* 4300285 10,000 04/30/91 10/15/91
MM Guardian Insurance Co.* 4300277 10,000 04/30/91 10/15/91
MM General Accident* 3335020 5,000 04/30/91 10/15/91
MM The Elite* EX501457 5,000 04/30/91 10/15/91
-------
MM Total* (4/30/91 - 10/15/91) 134,000 10 04/30/91 10/15/91
MM Reliance Insurance Company* 7001828 5,000 10/15/91 10/15/92
MM Guardian Insurance Company* 4300657 5,000 10/15/91 10/15/92
MM New Hampshire Insurance Co.* 5460266 10,000 10/15/91 10/15/92
MM Reliance Insurance Company* 7001829 5,000 10/15/91 10/15/92
MM CIGNA Insurance Company* XCP007159 5,000 10/15/91 10/15/92
MM Guardian Insurance Company* 4300658 10,000 10/15/91 10/15/92
MM Canadian General Insurance* IE15378 10,000 10/15/91 10/15/92
MM CIGNA Insurance Company* XCP007159 20,000 10/15/91 10/15/92
MM Chubb Insurance Company* 79078221 10,000 10/15/91 10/15/92
MM Continental Insurance Company* CX3553867 10,000 10/15/91 10/15/92
MM Zurich Insurance Company* 8815201 10,000 10/15/91 10/15/92
MM Chubb Insurance* 79078223 15,000 10/15/91 10/15/92
MM Royal Insurance Company* 60191898 5,000 10/15/91 10/15/92
MM Reliance Insurance Company* 7001825 10,000 10/15/91 10/15/92
MM General Accident Assurance* 3335020 5,000 10/15/91 10/15/92
MM Elite Insurance Company* EX501457 5,000 10/15/91 10/15/92
MM New Hampshire Insurance Co.* 5460267 3,000 10/15/91 10/15/92
MM Canadian General Insurance Co.* IE15379 7,000 10/15/91 10/15/92
-------
MM Total* (10/15/91 - 10/15/92) 150,000 10 10/15/91 10/15/92
AA Royal Insurance Company* 5,000 10/15/92 10/15/93
AA Simcoe & Erie* 5,000 10/15/92 10/15/93
AA General Accident* 5,000 10/15/92 10/15/93
AA Continental (10/15-11/15), Ian
Elliot* (11/15) 10,000 10/15/92 10/15/93
AA Royal Insurance Company* 10,000 10/15/92 10/15/93
AA Zurich Insurance Company* 10,000 10/15/92 10/15/93
AA Royal Insurance Company* 5,000 10/15/92 10/15/93
AA CIGNA Insurance Company* 25,000 10/15/92 10/15/93
AA Chubb Insurance Company* 25,000 10/15/92 10/15/93
AA AIG* 20,000 10/15/92 10/15/93
AA Reliance Insurance Company* 10,000 10/15/92 10/15/93
AA AIG* 20,000 10/15/92 10/15/93
-------
-3-<PAGE>
AA Total* (10/15/92 - 10/15/93) 150,000 10 10/15/92 10/15/93
AA Royal Insurance Company* 5,000 10/15/93 10/15/94
AA Ian Elliot Ltd.* 10,000 10/15/93 10/15/94
AA Royal Insurance Company* 10,000 10/15/93 10/15/94
AA Zurich Canada* 10,000 10/15/93 10/15/94
AA Royal Insurance Company* 5,000 10/15/93 10/15/94
AA CIGNA Insurance Company* 30,000 10/15/93 10/15/94
AA Chubb Insurance Company* 30,000 10/15/93 10/15/94
AA American International Companies* 20,000 10/15/93 10/15/94
AA Reliance Insurance Company* 10,000 10/15/93 10/15/94
AA American International Companies* 20,000 10/15/93 10/15/94
-------
AA Total* (10/15/93 - 10/15/94) 150,000 10 10/15/93 10/15/94
Directors &
Officers MM Chubb Insurance Company* 81081782A 15,000 250 04/30/91 10/15/91
MM Chubb Insurance Company* 81081742 15,000 250 10/15/91 11/15/92
AA Chubb Insurance Company/ 15,000 250 11/15/92 11/15/94
American Home Assurance Co.* 810817420 15,000 -0- Feb 1993 11/15/94
Crime MM Chubb Insurance Company* 81081743B 5,000 5 04/30/91 10/15/91
MM Chubb Insurance Company* 81081743 5,000 5 10/15/91 11/15/92
AA Chubb Insurance Company* 81081743 5,000 5 11/15/92 11/15/94
Special
Crime MM Chubb Insurance Company* 81081742A 5,000 0 04/30/91 10/15/91
MM Reliance Insurance Company* NFK2393672 15,000 0 10/15/91 11/15/92
AA Chubb Insurance Company* 81339541 15,000 0 11/15/92 11/15/94
Fiduciary MM Chubb Insurance Company* 81081494A 15,000 5 04/30/91 10/15/91
MM Chubb Insurance Company* 81081494 15,000 5 10/15/91 11/15/92
AA Chubb Insurance Company* 81081494C 15,000 5 11/15/92 11/15/94
Fiduciary -
Excess MM Reliance Insurance Company* 7001655 10,000 04/30/91 10/15/91
MM Reliance Insurance Company* 10,000 10/15/91 11/15/92
AA Reliance Insurance Company* 7002798 10,000 11/15/92 11/15/94
Worker's
Compensation
- CA & FL JH Federal Insurance Co. 71628488 0 04/27/91 10/15/92
-4-<PAGE>
JH Federal Insurance Co. 71628488 0 10/15/92 10/15/93
California None State Compensation Ins. Fund (State 10/14/94 10/14/94
Only of Calif.)
Worker's
Compensation
- TN JH Employers Insurance of Wausau 171203063372 0 04/27/91 06/01/92
Hartford Underwriters Insurance,
JH Inc. 77WZCQ9272 06/01/93 06/01/92
Florida
added to Hartford Underwriters Insurance,
this policy JH Inc. 77WZCQ9272 06/01/93 06/01/94
Worker's
Compensation
-MI JH Employers Insurance of Wausau 171203063372 0 04/27/91 06/01/92
JH Employers Reinsurance Corporation C-18219R 300 06/01/92 06/01/93
JH Employers Reinsurance Corporation C-18219R 300 06/01/93 06/01/94
Exporters JH Great Northern Insurance Co. 73181748 1,000 1 04/27/91 10/15/92
JH Great Northern Insurance Co. 73181748 1,000 1 10/15/92 10/15/93
JH Great Northern Insurance Co. 73181748 1,000 1 10/15/93 10/15/94
Liability JH Federal Insurance Company 352582055 2,000 0 04/27/91 10/15/92
JH Federal Insurance Company 352582055 2,000 0 10/15/92 10/15/93
JH Federal Insurance Company 352582055 2,000 0 10/15/93 10/15/94
Automobile JH Federal Insurance Company 73186816 1,000 0 04/27/91 10/15/92
JH Federal Insurance Company 73186816 1,000 0 10/15/92 10/15/93
JH Federal Insurance Company 73186816 1,000 0 10/15/93 10/15/94
Excess
Liability JH Federal Insurance Company 7968-56-91 2,000 0 04/27/91 06/11/91
JH Crum & Forster 2,000 0 06/11/91 10/15/92
JH National Union Fire Insurance Co. BE3088060 2,000 0 10/15/92 10/15/93
JH National Union Fire Insurance Co. BE3088060 2,000 0 10/15/93 10/15/94
B. Whitlenge
---------
1. SEE the attached copies of the following documents:
(a) Register of insurances held by Whitlenge prepared by
Jardine Insurance Brokers Limited in November 1993.
-5-<PAGE>
(b) One page schedule produced by Jardine Insurance Brokers
Limited showing the general claims experience of Whitlenge
for the three years ended 31st October 1993.
(c) One page "motor insurance fleet experience" schedule
produced by Norwich Union on 7th October 1993.
(d) Register of Insurances of Whitlenge N.V. (in Flemish)
produced by De Vaderlandsche.
C. OTHER: SEE the attached exhibit re: Industries' insurance
schedule.
-6-<PAGE>
WHITLENGE DRINK EQUIPMENT
LIMITED
[LOGO] Jardine Insurance Brokers Limited
-7-<PAGE>
Date: November 1993
REGISTER OF INSURANCES
______________________________________________________________________
Insured: Whitlenge Drink Equipment Limited
Class of Combined Liability
Insurance:
Period: 15th October 1993 - 14th October 1994
Both Days Inclusive
Insurers: AXA Insurance Company Ltd
Policy Number: 55 LC 51000967
Premium: (Pounds) 9,192.20
Interest: Legal liability for injury or illness to employees
in the course of their employment and legal
liability injury or illness to members of the
public or damage to their property
Employers Liability Unlimited
Public Liability (Pounds) 1,000,000 each and
every loss/unlimited
Products Liability (Pounds) 1,000,000 each and
every loss/and in all
Situation: Anywhere in the United Kingdom, Channel Islands
and Isle of Man and commercial visits abroad
Worldwide for Products
Conditions: 1. Employee shall mean:
(a) any person under a contract of service or
apprenticeship with the Insured.
(b) any person who is hired to or borrowed by
the Insured,
(c) any self-employed person providing labour
on
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-8-<PAGE>
(d) any person engaged under a work experience
scheme, while working for the Insured in
connection with the Business
2. The business shall include:
(a) the provision and management of canteen,
sports, social or welfare organisations
for the benefit of Employees and fire,
first-aid, medical and ambulance services,
(b) maintenance and minor building work on
premises owned or occupied by the Insured
3. Additional persons insured:
(a) any officer, committee or member of the
Insured's canteen, sports, social or
welfare organizations, fire, first aid,
medical or ambulance services in their
respective capacities,
(b) any director of the Insured or Employee in
respect of liability arising in connection
with the business,
(d) Any principal to the extent required by
contract or agreement entered into by the
Insured
4. Including:
(a) cross liability clause
(b) liability for damage to leasehold premises
(c) liability for accidental obstruction, loss
of amenities, trespass, nuisance or like
cause
(d) liability under Defective Premises Acts
other than damage to premises
5. Excluding:
(a) professional advice or advice given for a
fee
(b) liability arising from the ownership or
possession of aircraft or water craft
other than safety boats or manually
propelled craft
(c) the company shall not be liable for any
bodily injury or disease arising out of
any work in or on railway installations,
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-9-<PAGE>
airports, aerodromes, aircraft,
watercraft, blast furnaces, chimney
shafts, collieries, dams, gas works,
mines, power stations, steeples, towers,
tunnels, viaducts, bridges, quarries,
chemical works, oil refineries, fuel
depots or off-shore structures or
installations
Further, this endorsement shall not apply
in respect of work in office
administration or terminal buildings
and/or cafetaria areas not forming part of
above mentioned areas.
Warranty
--------
It is warranted by the Policyholder that in
respect of the use away from the policyholders own
premises of electric oxy-acetylene or similar
welding or cutting equipment, blow torches or any
other heat producing equipment the undernoted
precautions will be complied with on each
occasion:
1. Whenever possible the Insured shall appoint
a suitable person to be responsible for fire
safety
2. (a) The area in which work is to be carried
out including any area on the other side
of any wall or partition will be
inspected to ensure that no combustible
material is in danger of ignition either
directly or by conduction
(b) In connection with work in or on private
dwellings all combustible material in
the immediate vicinity of the work will
be temporarily sealed off from the
affected area by suitable fire resistant
covers or screens
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-10-<PAGE>
(c) In connection with all other premises
all combustable materials must be
removed to a distance of not Less than
10 metres from the work. Any immovable
combustible material will be temporarily
sealed off from the affected area by
suitable fire resisting covers or
screens
3. Fire extinguishing appliances will be kept
available in full working order immediately
to hand and ready for use
4. (a) Equipment will be lighted as short a
time as possible before use and
extinguished immediately after use
(b) Ignited equipment will not be left
unattended
5. A full examination will be made for at least
30 minutes before leaving the area in the
vicinity of the work including any area on
the other side of any wall or partition to
ensure that there is no incipient risk of
fire
The above Heat Warranty applies to direct
Employees and labour only sub-contractors
General
-------
Estimated wages 1993/94
Clerical (Pounds) 1,400,000
All Others (Pounds) 1,600 000
Estimated Turnover (Pounds) 14,000,000
Excesses/
Deductibles: Property damage excess
(a) All claims (Pounds) 100
(b) Arising in connection with the
application of heat (Pounds) 500
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-11-<PAGE>
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-12-<PAGE>
Date: November 1993
REGISTER OF INSURANCES
_____________________________________________________________________
Insured: Whitlenge Drink Equipment Limited
Class of Money
Insurance:
Period: 15th October 1993 - 14th October 1994
Both Days Inclusive
Insurers: James Hunt Dix (Insurance) Limited
Policy Number: L0014370K001
Premium: (Pounds) 600.00
Interest: Loss by any cause subject to the Policy limits
Limits of Pounds
Liability: ------
1. Crossed cheques and limited
negotiables 250,000
2. Residences of employees 250
3. Out of safe when closed for business 250
4. Unexpired units in franking The sum insured
machines
5. From locked safe overnight:-
(a) any unspecified safe 1,500
6. Any other loss 20,000
Situation: Anywhere in the United Kingdom
Conditions: 1. Discovery clause - 7 days for employee theft
2. Including P.A. assault:- Pounds
------
(a) death/limbs/eyes 10,000
(b) permanent total disablement 10,000
(c) weekly-disablement for 104 weeks 250
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-13-<PAGE>
3. Any other loss limit increased to (Pounds)
60,000 prior to holiday period
4. Including:
(a) personal effects (Pounds) 250
(b) reinstatement basis of settlement for
safes and security containers
5. Excluding:
(a) shortage, due to clerical or accounting
errors
(b) loss from unattended vehicle or
coin-operated machines
(c) any loss where a safe has been opened by a
key or safe combination left on the
premises
6. Warranted that the following escrow/security
arrangements apply in transit:
(a) two persons for carryings in excess of
(Pounds) 2,000
(b) three persons for carryings in excess of
(Pounds) 5,000
(c) A professional security company to be used
for larger sums
(d) outside business hours the safe to be kept
locked and key of the safe not to be left
on the premises
7. The term "Money" shall include:
------------------------------
Cash, bank notes, tokens, currency notes,
cheques, money orders, Giro cheques, bankers
drafts, bills of exchange, unused postage
stamps, holiday with pay stamps, national
savings stamps and certificates, national
insurance stamps, luncheon vouchers, warrants,
premium bonds, trading stamps and vouchers,
*bus and railway travel warrants, *railway
tickets, airline tickets which have been
authenticated and purchased for use,
travellers cheques, credit company sales
vouchers, VAT purchase invoices, embossed
stamps, unexpired franking machine units and
any other security for money
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-14-<PAGE>
General
-------
Estimated annual carryings 1993/94(Pounds) 100,000
Carryings by Group 4
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-15-<PAGE>
Date: November 1993
REGISTER OF INSURANCES
______________________________________________________________________
Insured: Whitlenge Drink Equipment Limited
Class of Engineering - Computers
Insurance:
Period 15th October 1993 - 14th October 1994
Both Days Inclusive
Insurers: Commercial Union Assurance Company Ltd
Policy Number: JX928928669
Premium: (Pounds) 350.00
Interest: Limit
(Pounds)
--------
1. Damage to Computers and ancillary
equipment and data carrying materials 100,000
2. Data reinstatement costs 11,000
3. Additional cost of working,
for 6 months 12,500
4. Data carrying materials anywhere
in the United Kingdom 100
-------
123,600
-------
Situation: The Insured's premises and anywhere in the United
Kingdom for data carrying materials
Conditions: 1. Subject to average
2. Including:
(a) reinstatement, with 85% average, local
authority consultants/accountants fees and
removal of debris
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-16-<PAGE>
(b) accidental failure of public electricity
supply
(c) automatic reinstatement of loss
(d) temporary removal
3. Excluding loss from unattended vehicles unless
locked or in a security locked building
overnight
4. warranted that the computer is
serviced/maintained by supplier or other
competent engineers
Excesses/ (Pounds) 50 each and every loss increasing to
Deductibles: (Pounds) 500 in respect of Theft from premises
unless an NACOSS Approved Security System
installed
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-17-<PAGE>
Date: November 1993
REGISTER OF INSURANCES
______________________________________________________________________
Insured: Whitlenge Drink Equipment Limited
Class of Group Personal Accident (and Travel)
Insurance:
Period: 15th October 1993 - 14th October 1994
Both Days Inclusive
Insurers: Cornhill Insurance Company Ltd
Policy Number: 01/RA/523034609
Premium: (Pounds) 630.00
Interest: In respect of the following Insured Persons
(a) Accidental bodily injury
(b) Medical, travel and cancellation expenses
(c) Loss or damage to Personal Property and Money
Situation: Anywhere outside of the United Kingdom
Conditions:
Insured Persons: Category A: Any Director or Employee of the
Insured or accompanying family members
Effective Time/
Journey: Category A: Any Journey (Holiday or Business) not
exceeding 3 months in duration and
outside the United Kingdom)
Personal Accident Benefits
1. Death (within 24 months of accident)
2. (a) Loss of two or more limbs or both eyes or
one of each
(b) Loss of one limb or eye
3. Permanent Total Disablement
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-18-<PAGE>
4. Total disablement for 104 weeks
5. Partial disablement for 104 weeks
Scale of Under Section 1
Benefits:
Category: 1 (Pounds) 100,000
2(a) (Pounds) 100,000
2(b) (Pounds) 100,000
3 (Pounds) 100,000
4 (Pounds) 100
5 (Pounds) 50
Deferment
Period -
Travel Benefits
Sum
Sections covered: Insured
---------------- -------
Category: (Pounds)
2. Medical/Travel expenses 1,000,000
4. Personal property and money 5,500
5. Replacement expenses
Emergency Rescue Service 1,000,000
Personal Public Liability 1,000,000
Cancellation and Curtailment 3,000
1. Loss of limbs shall include loss of use
2. Disappearance included
3. Injury as a direct result of unavoidable
exposure to the elements shall be deemed
Bodily Injury
4. Conveyance/Aircraft limit (Pound) 300,000
5. Permanent Total Disablement shall mean
disablement which entirely prevents the
Insured Person from attending to his/her usual
business or occupation and which lasts for 12
calendar months and at the expiry of that
period is beyond hope of improvement
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-19-<PAGE>
6. Cover shall not apply to bodily injury
consequent upon
(a) war whether declared or not between any of
the following countries, namely France,
United Kingdom, former constituent parts
of the Union of Soviet Socialist Republic,
Peoples Republic of China and United
States of America or
(b) war in Europe whether declared or not
(other than civil war but including any
enforcement action by or on behalf of the
United Nations) in which any of those
countries or any armed forces thereof are
engaged
but this shall not apply where the bodily injury
occurs in the course of a journey involving travel
outside the Insured Persons country of residence
7. The benefit for loss of one or both eyes shall
also be payable if the Insured Person
(a) has lost the effective use of his or her
eyes and has been added to the Register of
Blind persons on the authority of an
Ophthalmic Specialist
(b) has a vision of only 3/60 or worse
8. Travel section is non adjustable (subject to
annual review of travel pattern)
9. Including:
(a) bank and credit cards, signed travellers
and other cheques, travel tickets and
petrol and other coupons as money
(b) reasonable costs up to (Pounds) 200 to
replace essential articles
(c) pairs and set clause
(d) personal liability for injury or damage to
others - (Pounds) 1,000,000 any one claim
plus expenses and costs incurred
10. Excluding:-
(a) flying except as a passenger
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-20-<PAGE>
(b) any Insured Person over 70 years of age
(c) pregnancy within 2 months of commencement
of trip
(d) journeys taken against medical advice
(e) suicide or intentional self-injury
(f) active service in any armed forces except
as volunteer reservists
(g) sickness under Section 1
11. In respect insurance for loss of baggage and
money, cover excludes:
(a) vehicles and accessories
(b) moth, vermin, wear and tear, atmospheric
or climatic conditions or gradual
deterioration
(c) mechanical and electrical failure
(d) process of cleaning, restoring, repairing
or alteration
(e) loss not reported to the police or
transport carrier within 24 hours of
discovery
(f) money losses due to shortage, error,
omission or depreciation
General
-------
Single article limit (Pounds) 500 applies and
(Pounds) 500 overall in respect of valuables i.e.
Jewellery, Furs, Watches, Radio,
photographic/Video Equipment
Travel Pattern:
European Trips (60) Average Duration 3 days
USA/Canada ( 2) Average Duration 5 days
Elsewhere (16) Average Duration 16 days
Excesses/ (Pounds) 100 each and every loss
Deductibles:
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-21-<PAGE>
Date: November 1993
REGISTER OF INSURANCES
______________________________________________________________________
Insured: Whitlenge Drink Equipment Limited
Class of Commercial Legal Expenses
Insurance:
Period: 15th October 1993 - 14th October 1994
Both Days Inclusive
Insurers: Legal Protection Group Ltd
Policy Number: LN10058217
Premium: (Pounds) 4,597.60
Interest: Legal Expenses which arise from the conduct of the
Insured's business and which relate to any claim
or legal proceedings made by or against the
Insured within the Territorial Limits and notified
to us during the Period of Insurance
Situation: Anywhere in the United Kingdom
Conditions: See Policy Document for full Conditions
SECTION 1 - EMPLOYMENT COVER
----------------------------
The defence of any dispute with an Employee,
ex-Employee or prospective Employee relating to:
(a) the contract of employment with the Insured
(b) breaches or alleged breaches of the
Legislation
which may lead to civil or criminal claims or
legal proceedings against the Insured
provided that:
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-22-<PAGE>
any dismissal complies with the Insured's
Established disciplinary procedures
SECTION 2 - PROSECUTION DEFENCE
-------------------------------
The defence of any act or omission or alleged act
or omission by the Insured which leads to:
(a) the service of an Improvement Notice or
Prohibition Notice under the Health and Safety
at Work etc Act 1974 or the Health and Safety
(Northern Ireland) Order 1978 against which
the Insured wishes to appeal
(b) The Insured's Prosecution in a court of
criminal jurisdiction
SECTION 5 - CONTRACT COVER
--------------------------
The pursuit or defence of any dispute with a
customer or supplier in respect of a contract for
the sale, purchase, hire or supply of goods or
services
provided that
(i) the amount in dispute exceeds the Minimum
Amount in Dispute specified in the
schedule
(ii) where the dispute relates to money owed to
the Insured any claim is made within six
months of the date that the money became
due and payable
SECTION 6 - PROPERTY LEGAL DISPUTES
-----------------------------------
The pursuit or defence of disputes relating to:
(a) the possession of freehold or leasehold
property owned or occupied by the Insured
(b) any negligent act, omission or nuisance
caused by a Third Party relating to property
owned by the Insured or for which the
Insured is legally responsible other than
motor vehicles, aircraft or watercraft
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-23-<PAGE>
Limits of (Pounds) 50,000 per claim and (Pounds) 10,000 for
Indemnity: Attendance Expenses (max. (Pounds) 150 per day per
employee}
Annual Aggregate (Pounds) 1,000,000.
Terms/Conditions/ For full details please refer to policy.
Exclusion:
In particular please note that the insurers will
not be liable for legal costs incurred without
their written consent and where their recommended
procedures have not been followed.
In the event of a potential claim IMMEDIATE
notification must be provided to the insurers.
CONTACT MUST BE MADE PRIOR TO ANY DISMISSAL
Excesses/ 10% Co-Insurance in respect of contract cover
Deductibles: Minimum amount in dispute in respect of contract
cover (Pounds) 1,000
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-24-<PAGE>
Date: November 1993
REGISTER OF INSURANCES
______________________________________________________________________
Insured: Whitlenge Drink Equipment Limited
Class of
Insurance: Intellectual Property
Period: 15th October 1993 - 14th October 1994
Both Days Inclusive
Insurers: Legal Protection Group Ltd
Policy Number: 5000127
Premium: (Pounds) 5,104.00
Interest: As per Conditions
Situation: Territorial Limit - Anywhere in the United Kingdom
Conditions: Legal expenses which arise from any claim or legal
proceeding made brought or commenced by or against
the policyholder during the period of insurance in
respect of:
A. Patents
B. Copyright and Design
C. Brand Names, Trade and Service Marks
D. Breach of Confidentiality
E. Passing Off and Injurious Falsehood
Limit of (Pounds)
Indemnity: 50,000 any one claim and up to
1,000,000 in the aggregate
150 daily for witness attendance allowance
and up to
10,000 in the aggregate
5,000 in the aggregate for customs fees
payable
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-25-<PAGE>
Date: November 1993
REGISTER OF INSURANCES
______________________________________________________________________
Insured: Whitlenge Drink Equipment Limited
Class of Motor Fleet - Commercial Vehicles/Private Cars
Insurance:
Periods: 15th October 1993 - 14th October 1994
Both Days Inclusive
Insurers: Norwich Union Insurance Group Ltd
Policy Number: 92310A90031/32
Premium: (Pounds) 15,500.00
Interest: Comprehensive cover in respect of
(a) any goods carrying vehicle
(b) any private car
owned, hired or used by the Insured driven by any
authorised person for social, domestic and
pleasure purposes and the Insured's business
Situation: Great Britain, Northern Ireland (Republic of
Ireland,) the Isle of Man, the Channel Islands and
by agreement the Continent of Europe
Conditions: 1. The Policy includes manslaughter legal defence
costs without age restriction - Unlimited
2. Third Party section includes third party
property damage for commercial vehicles and
special types - limit (Pounds) 1,000,000
3. The Damage section includes:
(a) windscreen replacement unlimited
(b) malicious damage
(c) rugs and personal effects (private
cars/commercial vehicles (Pounds) 500
4. Excluding:
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-26-<PAGE>
(a) carriage of goods for reward
(b) carriage of passengers for reward
(c) hiring out vehicles or trailers
Schedule of As per attached
Vehicles:
Excesses/ (Pounds) 250 Accidental Damage, Fire, Theft and
Deductibles: Windscreen Excess
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-27-<PAGE>
SCHEDULE
--------
</TABLE>
<TABLE>
<CAPTION>
PRIVATE CARS
------------
MAKE/MODEL C.C./GVW YEAR REG. NO.
---------- -------- ---- --------
<S> <C> <C> <C>
1. Mercedes 320 TE 3200 1993 11 WDE
2. Rover 420 GSi 1994 1993 K149 VNX
3. Ford Orion Ghia 1800 1993 K566 OUY
4. Volvo 740 GLE 2316 1988 E331 MAC
5. VW Passat GL Estate 1998 1992 K601 TUE
6. Austin Montego 2.0 GTi 2000 F365 GFD
Estate
7. Vauxhall Cavalier GSi 1958 1992 J483 YVX
8. Mercedes 280 E 2800 1993 K955 AOV
9. Ford Sierra LX Estate 1800 1991 H680 UAB
10. Volvo 940 GL 2000 1992 J173 NDB
11. Volvo 940 GL 2000 1992 J174 NDB
12. Volvo 940 GLE 2300 1992 J820 SAC
13. Volvo 940 GLT 2000 1992 J819 SAC
14. Renault Savanna "D" 1900 1992 J873 MFK
15. BMW 520i 2000 1992 K2 NCG
COMMERCIAL VEHICLES
-------------------
MAKE/MODEL C.C./GVW YEAR REG. NO.
---------- -------- ---- --------
1. Renault Van 1.5 T 1983 A425 XOV
2. Cargo Lorry 13.5 T 1986 D351 HEA
3. Ford Transit 1.5 T 1988 F831 BUE
4. Leyland Truck 10.0 T F677 EFD
5. Renault Van 1.5 T 1990 H533 AEA
</TABLE>
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-28-<PAGE>
Date: November 1993
REGISTER OF INSURANCES
______________________________________________________________________
Insured: Whitlenge Drink Equipment Limited
Class of Engineering - Inspected Plant
Insurance:
Period: 15th October 1993 - 14th October 1994
Both Days Inclusive
Insurers: Industrial Safety Inspections
Policy Number: 100647
Premium: (Pounds) 807.57
Interest: Inspection only of plant
Situation: Chancel Way, Halesowen Industrial Park, Halesowen,
West Midlands B62 8SE
Conditions: 1. Schedule of plant:
As per detailed lodged with Insurers
Excesses/
Deductibles: None
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-29-<PAGE>
Date: November 1993
REGISTER OF INSURANCES
______________________________________________________________________
Insured: Whitlenge Drink Equipment Limited
Class of Marine
Insurance:
Period: 15th October 1993 - 14th October 1994
Both Days Inclusive
Insurers: Cornhill Insurance Company Ltd
Policy Number: MG05270
Premium: (Pounds) 4,000.00 Minimum and Deposit
Interest: 1. Marine cargo
2. Goods in Transit
Situation:
Voyages: Great Britain to Western Europe/Cyprus/USA/Far
East/Middle East/South Africa/Eastern Europe
and/or vice versa
Other voyages held covered at rates and on
condition to be agreed
Excluding Iran and Iraq
PER: Conveyances and/or steamer(s) and/or Motor
Vessel(s) (subject to Institute Classification
Clause) and/or Air Freight and/or Post and/or Air
Post and/or Conveyances
Conditions: MARINE CARGO
------------
Contract of Marine Insurance always open for the
full amount of (pounds) 100,000 any one Vessel
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-30-<PAGE>
and/or aircraft and/or conveyance irrespective of
declarations and to accept all declarations of
despatches until further notice
Notice Clause: Subject to 30 days notice of cancellation (either
side) for Marine Risks
Subject to 7 days notice of cancellation for War,
Strikes, Riots and Civil Commotions Risks but 48
hours notice of cancellation for strikes, riots
and civil commotions risk on shipments to or from
USA
Insured Interest: Soft and Alcoholic draught drink dispensing
equipment/spares/accessories suitably
packed/protected for transit and/or similar
interest
Limit: 1. (Pounds) 100,000 any on vessel and/or
Aircraft and/or conveyance
2. (Pounds) 250,000 any on location
3. (Pounds) 8,000 any on package
Basis of Goods Inward C.I.F. + 10%
Valuation: Goods Outward Invoice Price to client
Conditions: Subject to Institute Standard Conditions for Cargo
Contracts
Subject to Institute Classification Clause
Subject to Institute Cargo Clause as stated
hereunder:
Institute Cargo Clauses "A" 1st January 1992
Institute Cargo Clauses (Air) 1st January 1992
Subject to Institute War Clauses as applicable
Subject to Institute Strikes, Riots and Civil
Commotions Clause
Machinery subject to Institute Replacement Clause
Including Contingency Conditions for F.O.B. and/or
C.F.R. Sales
Rates: Exports/Imports Exports Imports
--------------- ------- -------
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-31-<PAGE>
From: Great Britain and/or
vice versa Sea/Air/Road
------------
To: Western Europe 0.10% 0.10%
Cyprus/Russia 0.25% -
USA/Canada 0.20% 0.125%
Far East 0.30 0.25%
Eastern Europe 0.15% -
Middle East (excluding
Iran and Iraq) 0.325% 0.20%
South Africa 0.25% -
GOODS IN TRANSIT
----------------
Risks Covered: "All Risks" - whilst in transit within the United
Kingdom
Interest: Goods belonging to the Insured or held in trust or
commission and for which the Insured is
responsible, all pertaining to the business
Basis of Sales: Invoice Price to customer but replacement
Valuation: cost for sending where no invoice issued
Limits: (Pounds)
--------
1. Any one vehicle owned and/or operated
by the Insured and/or Sub-Contractor
and/or Supplier (on Ex-Works Basis) 100,000
2. (a) Any one consignment by unspecified
road carrier 100,000
(b) Any one consignment by rail/post 100,000
3. Any one location 250,000
4. Any one package 8, O00
Warranty: Own Vehicle Theft Exclusion Clause
The Company shall not be liable for any loss or
damage to the insured interest whilst on or
contained in any vehicle and/or trailer and/or
container owned by, hired by or under the control
of the insured as a result of:
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-32-<PAGE>
1. Theft when the vehicle and/or trailer and/or
container is left unattended unless such
vehicle and/or trailer and/or container has
all points of access closed and secured by all
the locks and other protections thereon and
has all keys removed
2. Theft of or from the vehicle and/or trailer
and/or container left unattended between 18.00
hours and 6.00 hours unless:
(i) such vehicle and/or trailer and/or
container is locked and garaged in a
building which is securely closed and
locked, or
(ii) such vehicle and/or trailer and/or
container is locked and parked in a yard
or compound which is fully enclosed and
locked, or is fully enclosed and
security manned 24 hours per day
Warranted that the alarm system and/or immobiliser
fitted to the vehicle and/or trailer and/or
container is in full efficient working order and
set whenever the vehicle and/or trailer and/or
container is left loaded and unattended
Rates: O.015% applicable to declared values
Excesses/ None
Deductibles:
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-33-<PAGE>
WHITLENGE DRINK EQUIPMENT LIMITED
--------------------------------
General Claims Experience (3 years)
<TABLE>
<CAPTION>
Type of Policy Year Interest Amount
-------------- ---- -------- ------
(Pounds)
<S>*Combined Property <C> <C> <C>
1991 Theft
3,573.15
Theft 979.20
1992 Theft 3,500.00
Theft 600.00
Theft 524.00
Theft 356.00
Vandalism 21,200.00
Combined Liability 1993 Employee fell from 15,000.00 O/S
ladder
Money Nil
Engineering - Computers Nil
Personal Accident/Travel Nil
Legal Expenses Nil
Motor Fleet As attached
Marine 1993 Loss of Goods/UK 1,137.00
*Cover now placed within Group Umbrella 1992
A member of JIB Group
Registered Office: Jardine House, 6 Crutched Friars, London EC3N 2HT
Registered Number: 115332 England VAT Reg no 244 2321 96
Member of British Insurance & Investment Brokers' Association
-34-<PAGE>
SCHEDULE 6.15
Investments
A. Group:
1. Note Receivable from Howe Corporation in the amount of $300,000.
2. Group has a 17% equity interest in Booth Limited, a private
company limited by shares registered in England. <PAGE>
</TABLE>
<PAGE>
Exhibit 10.2
SCOTSMAN INDUSTRIES, INC., GUARANTOR
SCOTSMAN GROUP INC.
$20,000,000
11.43 percent Senior Notes due May 1, 1998
_______________________
AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
_______________________
Dated as of April 29, 1994<PAGE>
TABLE OF CONTENTS
Section Page
SECTION 1. NOTES. . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. [Intentionally Omitted.] . . . . . . . . . . . . . . 1
SECTION 3. [Intentionally Omitted.] . . . . . . . . . . . . . . 2
SECTION 4. [Intentionally Omitted.] . . . . . . . . . . . . . . 2
SECTION 5. REPRESENTATIONS AND WARRANTIES, ETC. OF THE GUARANTOR
AND THE COMPANY. . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 6. [Intentionally Omitted] . . . . . . . . . . . . . . . 3
SECTION 7. ACCOUNTING; FINANCIAL STATEMENTS AND OTHER
INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 8. INSPECTION; CONFIDENTIALITY . . . . . . . . . . . . . 6
SECTION 9. PREPAYMENT OF NOTES . . . . . . . . . . . . . . . . . 6
SECTION 10. BUSINESS AND FINANCIAL COVENANTS OF THE COMPANY. . . 8
SECTION 11. EVENTS OF DEFAULT; ACCELERATION . . . . . . . . . . 20
SECTION 12. REMEDIES ON DEFAULT, ETC. . . . . . . . . . . . . . 23
SECTION 13. DEFINITIONS . . . . . . . . . . . . . . . . . . . . 24
SECTION 14. GUARANTEE . . . . . . . . . . . . . . . . . . . . . 38
SECTION 15. REGISTRATION, TRANSFER AND SUBSTITUTION OF NOTES . . 40
SECTION 16. PAYMENTS ON NOTES . . . . . . . . . . . . . . . . . 41
SECTION 17. EXPENSES, ETC. . . . . . . . . . . . . . . . . . . . 41
SECTION 18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . 42
SECTION 19. AMENDMENTS AND WAIVERS . . . . . . . . . . . . . . . 43
SECTION 20. NOTICES, ETC. . . . . . . . . . . . . . . . . . . . 43
SECTION 21. REPRODUCTION OF DOCUMENTS . . . . . . . . . . . . . 44
-i-<PAGE>
SECTION 22. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . 44
SECTION 23. REFERENCES IN OTHER AGREEMENTS . . . . . . . . . . . 45
SCHEDULE OF NOTEHOLDERS -- Information Relating to Holders
SCHEDULE 5.17(a) -- Liens
SCHEDULE 5.18 -- Indebtedness
SCHEDULE 6.15 -- Investments
EXHIBIT A -- Form of Note
EXHIBIT B -- [Intentionally Omitted]
EXHIBIT C -- [Intentionally Omitted]
EXHIBIT D -- [Intentionally Omitted]
EXHIBIT E -- [Intentionally Omitted]
EXHIBIT F -- [Intentionally Omitted]
EXHIBIT G -- [Intentionally Omitted]
EXHIBIT H -- [Intentionally Omitted]
EXHIBIT I -- [Intentionally Omitted]
EXHIBIT J -- Form of Domestic Subsidiary Guaranty
EXHIBIT K -- Representations from Credit Agreement
-ii-<PAGE>
SCOTSMAN GROUP INC.
SCOTSMAN INDUSTRIES, INC., GUARANTOR
755 Corporate Woods Parkway
Vernon Hills, Illinois 60011
11.43 percent Senior Notes due May 1, 1998
as of April 29, 1994
TO EACH OF THE NOTEHOLDERS
LISTED IN THE ATTACHED
SCHEDULE OF NOTEHOLDERS
Dear Sirs:
Scotsman Group Inc. (the "Company"), a Delaware corporation,
and Scotsman Industries, Inc. (the "Guarantor") a Delaware
corporation, have entered into separate Note Purchase Agreements dated
as of April 17, 1989 (as heretofore amended, supplemented or otherwise
modified, the "Original Agreements") among them and each of the
purchasers listed on the Schedule of Purchasers attached thereto (the
"Original Purchasers") pursuant to which the Company issued and sold,
and the Guarantor guarantied, an aggregate principal amount of Twenty
Million Dollars ($20,000,000) of the Company's 11.43 percent Senior
Notes due May 1, 1998 (the "Notes", such term to include any such
Notes issued in substitution therefor). As of the date hereof, the
entire principal amount of the Notes remains outstanding and the Notes
are held by the holders (collectively, the "Holders") and in the
respective amounts indicated on the Schedule of Noteholders hereto.
The Company, the Guarantor and each of the Holders desire hereby to
amend and restate the Original Agreements as set forth herein.
Accordingly, the Company and the Guarantor hereby agree with you as
follows:
SECTION 1. NOTES.
Notes issued after the date hereof shall be substantially in
the form of Exhibit A with such changes therefrom, if any, as may be
approved by the Holders and the Company. Certain capitalized terms
used in this Agreement are defined in Section 13; references to a
"Schedule" or an "Exhibit" are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement.
SECTION 2. [Intentionally Omitted.]<PAGE>
SECTION 3. [Intentionally Omitted.]
SECTION 4. [Intentionally Omitted.]
SECTION 5. REPRESENTATIONS AND WARRANTIES, ETC. OF THE GUARANTOR AND
THE COMPANY.
The Guarantor and the Company each represent and warrant
that:
5.1 Original Agreements. The representations and
warranties set forth in Section 5 of the Original Agreements were true
and correct in all material respects when made (it being acknowledged
and agreed that the foregoing terms of this Section 5.1 speak as of
the Closing Date and the Funding Date only (and only as to the Related
Companies (existing in such capacity on the Closing Date and the
Funding Date) and only as to the facts and circumstances as they
existed on the Closing Date and the Funding Date).
5.2 Credit Agreement Representations. As of the date
hereof, the representations and warranties set forth in Article V (a
copy of which is attached hereto as Exhibit K) of the Credit Agreement
are true and correct in all material respects; provided, however, that
for purposes of this Section 5.2, each reference in such
representations and warranties to "Material Adverse Effect" shall be
deemed to be a reference to Material Adverse Effect as such term is
defined in Section 13 hereof.
5.3 Enforceability. (a) The Guarantor and the Company each
have all necessary power and authority to execute and deliver each
Financing Document to which it is a party and perform its obligations
thereunder; (b) each Subsidiary that is a party to a Subsidiary
Guaranty has all necessary power and authority to execute and deliver
the Subsidiary Guaranty to which it is a party; and (c) each Financing
Document has been duly authorized, executed and delivered by the
Guarantor, the Company and each such Subsidiary (in each case to the
extent such Person is a party thereto), and each Financing Document
constitutes the legal, valid and binding obligation of the Guarantor,
the Company and each Subsidiary (in each case to the extent such
Person is a party thereto) which is enforceable in accordance with the
terms thereof, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally and general principles of equity.
5.4 No Conflicts. Neither the execution and delivery by
any Related Company of the Financing Documents to which it is a party
nor compliance by it with the terms thereof (a) violate any law, rule,
- 2 -<PAGE>
regulation, order, writ, judgment, injunction, decree or award binding
upon such Related Company or its charter, or by-laws, (b) violate the
provisions of or require the approval or consent of any party to any
indenture, instrument or agreement to which such Related Company is a
party or a subject, or by which, or its property, is bound, or
conflict with or constitute a default thereunder, or result in the
creation or imposition of any Lien (other than the Liens contemplated
hereby) in, of or on the property of any Related Company pursuant to
the terms of any such indenture, instrument or agreement, or (c)
require any consent of the stockholders of any Person, except for
approvals or consent which will be obtained on or before the date
hereof and accept for any violation of, or failure to obtain an
approval or consent required under, any such indenture, instrument or
agreement that could not reasonably be expected to have a Material
Adverse Effect.
5.5 Governmental Consents. No order, consent, approval,
qualification, license, authorization, or validation, or filing,
recording or registration with, where exemption by, or other action in
respect of, any court, governmental or public body or authority, or
any subdivision thereof, any securities exchange or other Person is
required in connection with the execution, delivery, consummation or
performance of, or the legality, validity, binding effect or
enforceability of, any of the Financing Documents.
5.6 Disclosure. Neither any Financing Document, nor any
other document, certificate or instrument delivered to the Holders by
or on behalf of the Company or the Guarantor in connection with the
transactions contemplated by the Financing Documents (taken as a
whole) contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements
contained in the Financing Documents and in such other documents,
certificates or instruments not misleading. Without regard to matters
of a general economic nature, there is no fact known to the Guarantor
or the Company which has a Material Adverse Effect or in the future
may (so far as either the Guarantor or the Company can now reasonably
foresee) have a Material Adverse Effect which has not been set forth
in this Agreement, the Credit Agreement, or the other documents,
certificates and instruments delivered to the Holders under or in
connection with the transactions contemplated by this Agreement.
SECTION 6. [Intentionally Omitted]
SECTION 7. ACCOUNTING; FINANCIAL STATEMENTS AND OTHER INFORMATION.
The Guarantor will maintain, for itself and each Subsidiary
of the Guarantor, a system of accounting established and administered
in accordance with generally accepted United States accounting
- 3 -<PAGE>
principles, consistently applied, with appropriate records and books
of account in which complete entries are to be made reflecting its and
their financial transactions, and will furnish to each holder of any
Notes:
(a) As soon as practicable and in any event on or before
the 90th day after the close of each of its Fiscal Years (or if such
90th day is not a business day, the next following business day),
consolidated and consolidating (separated by distinguishing Whitlenge
and its Subsidiaries on a consolidated basis, DFC and its Subsidiaries
on a consolidated basis and the Guarantor and the remaining
Subsidiaries on a consolidated basis) balance sheet of Guarantor and
its Subsidiaries as at the end of such Fiscal Year and the related
consolidated and consolidating (describing information through the
line item indicating operating income) statements of income and
consolidated statement of cash flow for such Fiscal Year, in each case
setting forth in comparative form the figures for the previous Fiscal
Year, together with an audit report certified by Arthur Anderson & Co.
or other independent certified public accountants of nationally
recognized standing indicating that such audit was conducted in
accordance with generally accepted United States auditing standards
and is without qualification with respect to (i) the continuance of
each of the Guarantor and each Subsidiary as a going concern and (ii)
departures from generally accepted United States accounting principles
other than departures which (A) are immaterial, (B) will not cause the
financial statements to fail to meet the requirements of the
Securities and Exchange Commission for financial information to be
contained or incorporated by reference in registration statements and
(C) do not cause the financial statements to fail to accurately
reflect the financial condition of the Guarantor and its Subsidiaries
on a consolidated basis and without qualification as to scope of
examination resulting from the failure of the Guarantor or any
Subsidiary to give access to books, records or other information and
accompanied by a certificate of such accounting firm stating that in
the course of its audit of the financial statements of the Guarantor
and its Subsidiaries, such accounting firm has obtained no knowledge
of any Event of Default or Potential Event of Default, or if, in the
opinion of such accounting firm any Event of Default or Potential
Event of Default shall exist, stating the nature and status thereof.
(b) As soon as practicable and in any event within 45 days
after the close of the first three Fiscal Quarters of each of its
Fiscal Years, for itself and its Subsidiaries, consolidated and
consolidating (separated by distinguishing Whitlenge and its
Subsidiaries on a consolidated basis, DFC and its Subsidiaries on a
consolidated basis and the Guarantor and the remaining Subsidiaries on
a consolidated basis) unaudited balance sheets as at the close of each
such period and consolidated and consolidating (describing information
through the line item indicating operating income) income statements
and a consolidated statement of cash flows for the period from the
- 4 -<PAGE>
beginning of such Fiscal Year to the end of such Fiscal Quarter, all
certified by an Responsible Officer.
(c) Together with the financial statements required by
clauses (a) and (b) above, a compliance certificate signed by a
Responsible Officer showing the calculations necessary to determine
compliance with this Agreement and stating that no Event of Default or
Potential Event of Default exists, or if any Event of Default or
Potential Event of Default exists, stating the nature and status
thereof.
(d) As soon as possible and in any event within 10 days
after receipt by the Guarantor or any of its Subsidiaries, a copy of
(i) any notice, claim, complaint or order to the effect that the
Guarantor or any of its Subsidiaries is or may be liable to any Person
as a result of the release by the Guarantor, any of its Subsidiaries
or any other Person of any Hazardous Materials into the environment or
requiring that action be taken to respond to or clean up a Release of
Hazardous Materials into the environment, and (ii) any notice,
complaint or citation alleging any violation of any Environmental Law
or Environmental Permit by the Guarantor or any of its Subsidiaries,
which in any case references an event described in clause (i) or (ii)
above which would have a Material Adverse Effect. Within ten days of
the Guarantor or any Subsidiary having knowledge of the proposal,
enactment or promulgation of any Environmental Law which would have a
Material Adverse Effect, the Guarantor shall provide each holder of
the Notes with written notice thereof.
(e) Promptly upon the furnishing thereof to the
shareholders of the Guarantor, copies of all financial statements,
reports and proxy statements so furnished.
(f) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other
regular reports which the Guarantor or any of its Subsidiaries files
with the Securities and Exchange Commission.
(g) Promptly and in any event within ten (10) days after
learning thereof, notification of (i) any tax assessment, demand,
notice of proposed deficiency or notice of deficiency received by the
Guarantor or any other Related Company or (ii) the filing of any tax
Lien or commencement of any judicial proceeding by or against any such
Consolidated Person, if any such assessment, demand, notice, Lien or
judicial proceeding relates to tax liabilities in excess of ten
percent (10 percent) of the net worth (determined according to
generally accepted accounting standards and without reduction for any
reserve for such liabilities) of the Guarantor and its Subsidiaries
taken as a whole.
- 5 -<PAGE>
(h) The Guarantor will, and will cause each Subsidiary to,
give prompt notice in writing to each holder of Notes of the
occurrence of any Event of Default or Potential Event of Default and
of any other development, financial or otherwise (other than general
economic conditions), which would have a Material Adverse Effect.
(i) As soon as possible and in any event within 10 days
after the Guarantor or any Subsidiary knows that any Termination Event
has occurred with respect to any Plan, a statement, signed by a
Responsible Officer of the Guarantor, describing said Termination
Event and the action which the Guarantor or such Subsidiary proposes
to take with respect thereto.
(j) Not later than June 30 of each year, a copy of the
management summary of the actuarial valuation report prepared by the
benefits consultant or consultants to the Guarantor and its
Subsidiaries.
(k) Such other information (including non-financial
information) as each holder of the Notes may from time to time
reasonably request.
SECTION 8. INSPECTION; CONFIDENTIALITY.
8.1. Inspection. The Company and the Guarantor will permit
any authorized representatives designated by the holder of any Notes
to visit and inspect any of the properties of any of the Related
Companies, including their respective books of account, and to make
copies and take extracts therefrom, and to discuss their respective
affairs, finances and accounts with their respective officers and, in
the presence of an officer or other representative of the Guarantor or
the Company, their independent public accountants, all at such
reasonable times and as often as may be reasonably requested.
8.2. Confidentiality. Each holder of a Note shall take
reasonable precautions, consistent with its normal policies and
procedures, to maintain the confidentiality of any non-public
information obtained from the Guarantor or the Company, and no holder
of any Note will disclose any such non-public information to any
prospective purchaser prior to its entering into an agreement
containing provisions substantially the same as those of this Section
8.2.
SECTION 9. PREPAYMENT OF NOTES.
9.1. Required Prepayments.
- 6 -<PAGE>
(a) Amortizing Payments. On May 1, 1997 the Company will
prepay $10,000,000 principal amount of the Notes (or such lesser
principal amount as shall then be outstanding), at the principal
amount of the Notes so prepaid, without premium. No partial,
prepayment of the Notes pursuant to Section 9.2 shall relieve the
Company and the Guarantor from its obligation to make the required
prepayments provided for in this Section 9.1.
(b) Change in Control. The Company shall forthwith upon
the occurrence of a Change in Control (and, in any event, not later
than two (2) Business Days after such occurrence) give written notice
by facsimile transmission (confirmed by delivery of a copy thereof by
overnight courier of national reputation, sent on the date that such
facsimile transmission is made) thereof to each holder of Notes, which
notice shall (i) describe in reasonable detail the facts and
circumstances giving rise to such Change in Control, (ii) contain, and
constitute, an irrevocable offer to prepay all, but not less than all,
of the Notes held by such holder on a date specified in such notice
(the "Control Prepayment Date") that is not less than thirty (30) days
and not more than forty-five (45) days after the occurrence of such
Change in control (if the Control Prepayment Date is not specified in
such notice it shall be thirty (30) days after the date of such
occurrence) and (iii) specify the Acceptance Deadline with respect to
such offer. To accept such offered prepayment, a holder of Notes
shall cause a notice of such acceptance to be delivered to the Company
not later than five (5) days prior to the Control Prepayment Date (the
"Acceptance Deadline"). If so accepted, such offered prepayment shall
be due and payable on the Control Prepayment Date. Such offered
prepayment shall be made at one hundred percent (100 percent) of the
principal amount of the Notes to be prepaid, together with an amount
equal to the Make-Whole Premium with respect to such principal amount
and interest on such principal amount accrued to the Control
Prepayment Date. Promptly after each Control Prepayment Date and the
making of all prepayments contemplated on such Control Prepayment Date
under this Section 9.1(b) (and, any event, within thirty (30) days
thereof), the Company shall deliver to each holder of Notes a
certificate signed by a Responsible Officer of the Company containing
a list of the then current holders of Notes and setting forth as to
each such holder the outstanding principal amount of Notes held by
such holder at such time.
9.2. Optional Prepayments with Premium. The Company may, at
its option, upon notice as provided in Section 9.3, prepay at any time
on or after May 1, 1991, all, or from time to time on or after such
date any part (in a minimum amount of at least $100,000 and in an
integral multiple of $1,000), of such Notes at the principal amount of
the Notes so prepaid, plus a premium, which shall be, as to each Note
being prepaid, equal to the Make-Whole Premium determined in respect
of the prepayment date and of the portion of the principal amount of
such Note being prepaid.
- 7 -<PAGE>
9.3. Notice of Optional Prepayments. The Company will give
each holder of any Notes written notice of each optional prepayment of
Notes under Section 9.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment, in each case
specifying such date, the aggregate principal amount of the Notes to
be prepaid, the projected amount of the Make-Whole Premium, if any,
the principal amount of each Note held by such holder to be prepaid
and the Section of this Agreement under which such prepayment is to be
made.
9.4. Allocation of Partial Prepayments. In the case of each
partial prepayment paid or to be prepaid to the holders of Notes, the
principal amount of the Notes to be prepaid shall be allocated (in
integral multiples of $1,000) among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective
unpaid principal amounts thereof not theretofore called for
prepayment, with adjustments, to the extent practicable, to compensate
for any prior prepayments not made exactly in such proportion.
9.5. Maturity; Surrender, etc. In the case of each
prepayment, the principal amount of each Note to be prepaid shall
mature and become due and payable on the date fixed for such
prepayment together with interest on such principal amount accrued to
such date and the applicable premium, if any. From and after such
date, unless the Company shall fail to pay such principal amount when
so due any of its Subsidiaries to, declare or pay any dividend on any
shares of capital stock of the Company or make any payment on account
of the purchase, redemption, retirement or acquisition of any shares
of capital stock of the Company or any option, warrant or other right
to acquire shares of capital stock of the Company.
9.6. Acquisition of Notes. The Company will not, and will
not permit any of the Related Companies or Affiliates to, purchase,
redeem or otherwise acquire any Note except upon the payment or
prepayment thereof in accordance with the terms of this Agreement and
such Note.
SECTION 10. BUSINESS AND FINANCIAL COVENANTS OF THE COMPANY.
The Company and the Guarantor covenant that from the date of
this Agreement and thereafter so long as any of the Notes are
outstanding:
10.1. Limitation on Indebtedness. The Guarantor will
not, nor will it permit any Subsidiary of it to, create, incur or
suffer to exist any Indebtedness, except:
- 8 -<PAGE>
(a) Indebtedness owing with respect to the Credit Agreement
in an outstanding principal amount not to exceed $90,000,000 at any
one time;
(b) Indebtedness (including commitments therefor) existing
on the date hereof and described in Schedule 5.18 hereto;
(c) the Notes and the Subsidiary Guaranties;
(d) Rate Hedging Obligations related to loans under the
Credit Agreement;
(e) Rate Hedging Obligations relating to other than
interest rate agreements referencing an aggregate notional amount not
to exceed $20,000,000 at any one time outstanding;
(f) extensions, renewals, refundings and refinancings of
the Indebtedness described in clauses (a) and (b) above, so long as
the aggregate principal amount of such Indebtedness after giving
effect thereto does not exceed the aggregate principal amount
permitted hereunder to be outstanding as of the date hereof;
(g) Indebtedness owing to the Guarantor or one or more of
its Wholly-Owned Subsidiaries which has been incurred by the Guarantor
or any of its Wholly-Owned Subsidiaries; and
(h) additional Indebtedness (i) which does not constitute a
Restricted Foreign Transfer, (ii) which is not described in clause (e)
above and (iii) with an aggregate principal amount outstanding not to
exceed seventeen percent (17 percent) of the Consolidated Tangible
Assets (as of the last day of the Fiscal Quarter immediately preceding
any date of determination) of the Guarantor and its Subsidiaries.
10.2. Liens, etc. The Guarantor and the Company each
will not, and will not permit any of its Subsidiaries to, create,
assume or suffer to exist any Lien on any asset now owned or hereafter
acquired, except:
(a) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with generally accepted principles of
accounting shall have been set aside on its books;
(b) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more than
90 days past due or which are being contested in good faith by
- 9 -<PAGE>
appropriate proceedings and for which adequate reserves shall have
been set aside on its books;
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
(d) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of the Borrower
or the Subsidiaries;
(e) Liens existing on the date hereof and identified on
Schedule 5.17(a) to this Agreement and Liens arising out of any
transaction contemplated by Section 10.1(f) as long as no additional
Property becomes subject to any such replacement Lien;
(f) Liens arising under the Pledge Agreement; and
(g) additional Liens securing Indebtedness permitted under
Section 10.1(h).
10.3. [Intentionally Omitted]
10.4. Restricted Payments. If an Event of Default or
Potential Event of Default has occurred and is continuing or would
occur after giving effect thereto, the Guarantor will not, nor will it
permit any Subsidiary of it to, (a) declare or pay any dividends on
its capital stock or make any other distribution on account of its
capital stock, other than (i) dividends payable in its own capital
stock, (ii) dividends payable to the Company or to any Wholly-Owned
Domestic Subsidiary of the Company, and (iii) dividends payable by any
Foreign Subsidiary to any Wholly-Owned Foreign Subsidiary or (b)
redeem, repurchase or otherwise acquire or retire any of its capital
stock (or any warrants, rights or options to acquire such capital
stock) at any time outstanding; provided, that in no event shall (x)
the Company pay dividends to the Guarantor in excess of such amount as
may be required by the Guarantor to pay (A) dividends to its
stockholders which have previously been declared in accordance with
all applicable laws and (B) reasonable expenses in accordance with
past practices, except that the Company may pay the Guarantor any
dividend required to consummate the Closing Transactions, or (y) the
Guarantor or any Domestic Subsidiary pay dividends to any Wholly-Owned
Foreign Subsidiary which would result in the Foreign Transfer Cap
being exceeded; provided, further, that notwithstanding clause (a)
above, (1) the Guarantor may pay any dividend to its stockholders
which has previously been declared in accordance with all applicable
laws and with clause (a) above and (2) each Subsidiary of the
- 10 -<PAGE>
Guarantor may pay any dividend which is necessary to allow the payment
of dividends under clause (1).
10.5. Financial Covenants. Subject to normal year-end
and closing audit adjustments for calculations or determinations made
in accordance with Agreement Accounting Principles prior to the end of
its fiscal year, the Guarantor on a consolidated basis with its
Subsidiaries shall:
10.5.1. Minimum Adjusted Consolidated Tangible Net Worth.
At all times on and after May 1, 1994, measured as of the end of
each Fiscal Quarter, maintain an Adjusted Consolidated Tangible
Net Worth equal to or greater than (a) the Adjusted Consolidated
Tangible Net Worth as of May 1, 1994(but in no event less than
$50,000,000), minus (b) $2,000,000, plus (c) 60 percent of the
cumulative Net Income of the Guarantor and its Subsidiaries for
the period beginning on May 2, 1994 and ending on the last day of
the Fiscal Quarter immediately preceding the date of measurement,
plus (d) the amount, if any, by which the Adjusted Consolidated
Tangible Net Worth is increased as a result of any issuance of
Scotsman Earnout Shares (as defined in the Purchase Agreement) or
Scotsman Contingent Common Stock (as defined in the Merger
Agreement), plus (e) 60 percent of the net cash proceeds received
after the date hereof by the Guarantor or any Subsidiary from the
issuance of any equity security to any Person other than the
Guarantor or any Subsidiary; provided, that no effect shall be
given to any losses incurred by the Guarantor and its
Subsidiaries during such period.
10.5.2. Leverage Ratio. At all times after the date
hereof, measured as of the end of each Fiscal Quarter for the
period of four Fiscal Quarters then ended, maintain a Leverage
Ratio of not more than the following during each of the following
periods:
<TABLE>
<CAPTION>
Period Ratio
<S> <C>
Second and Third Fiscal Quarters 1.50:1
of 1994
Fourth Fiscal Quarter of 1994 and 1.30:1
first three Fiscal Quarters of 1995
Fourth Fiscal Quarter of 1995 and first 1.10:1
three Fiscal Quarters of 1996
Fourth Fiscal Quarter of 1996 and 1.00:1
thereafter
</TABLE>
10.5.3. Interest Expense Coverage Ratio. At all times
after the date hereof, measured as of the end of each Fiscal
Quarter, maintain an Interest Expense Coverage Ratio for the
- 11 -<PAGE>
period of four Fiscal Quarters ending as of such date (provided,
that for each Fiscal Quarter in 1994, such ratio shall be
determined for the period beginning on the first day of the
second Fiscal Quarter of 1994 and ending on the last day of such
Fiscal Quarter), of not less than the following:
<TABLE>
<CAPTION>
Period Ratio
<S> <C>
Fiscal Year 1994 and first two 3.75:1
Fiscal Quarters of 1995
Third Fiscal Quarter of 1995 4.00:1
Fourth Fiscal Quarter of 1995 4.25:1
Fiscal Year 1996 4.50:1
Fiscal Year 1997 and thereafter 5.00:1
</TABLE>
10.5.4. Cash Flow Coverage Ratio. At all times after the
date hereof, measured as of the end of each Fiscal Quarter,
maintain a Cash Flow Coverage Ratio for the period of four Fiscal
Quarters ending as of such date (provided, that for each Fiscal
Quarter in 1994, such ratio shall be determined, on an annualized
basis, for the period beginning on the first day of the second
Fiscal Quarter of 1994 and ending on the last day of such Fiscal
Quarter), of not less than the following:
- 12 -<PAGE>
<TABLE>
<CAPTION>
Period Ratio
<S> <C>
Fiscal Year 1994 .17:1
First two Fiscal Quarters of 1995 .18:1
Third Fiscal Quarter of 1995 .20:1
Fourth Fiscal Quarter of 1995 and first .22:1
three Fiscal Quarters of 1996
Fourth Fiscal Quarter of 1996 and .25:1
thereafter
</TABLE>
10.6. Transactions with Affiliates. The Company and the
Guarantor each will not, and will not permit any of its Subsidiaries
to, directly or indirectly, engage in any material transaction with
any Affiliate of the Guarantor or the Company, including, without
limitation, the purchase, sale or exchange of assets or the rendering
of any service, except in the ordinary course of business and pursuant
to the reasonable requirements of the Company's or the Guarantor's or
such Subsidiary's business and upon fair and reasonable terms that are
no less favorable to the Company, the Guarantor or such Subsidiary, as
the case may be, than those which might be obtained in an arm's-length
transaction at the time from Persons which are not such an Affiliate;
provided, that Restricted Payments permitted by Section 10.4 shall not
be limited by this Section 10.6; provided, further that the Guarantor
and each Subsidiary may enter into any such transaction with or make
any such payment or transfer to any Wholly-Owned Subsidiary so long as
any such transaction, payment or transfer which constitutes a
Restricted Foreign Transfer would result in the Foreign Transfer Cap
being exceeded.
10.7. [Intentionally Omitted.]
10.8. Consolidations, Mergers and Sales of Assets.
(a) The Guarantor and the Company each will not (i)
consolidate with or merge with or into any other Person or (ii) sell,
assign, lease, transfer or otherwise dispose of all or substantially
all of its assets to any other Person; provided that each may merge
with another Person so long as (x) it is the surviving corporation and
(y) immediately after giving effect thereto, no Event of Default or
Potential Event of Default shall have occurred and be continuing. The
Guarantor and the Company each will not permit any of its Subsidiaries
to consolidate or merge with or into any Person unless either (A) the
Guarantor or the Company is the surviving corporation, (B) the
corporation surviving such consolidation or merger is a Wholly-Owned
Subsidiary of the Guarantor or the Company or (C) such merger or
consolidation is effected in connection with a disposition permitted
by Section 10.8(b) of the entire Investment in such Subsidiary.
xxx (b) Neither the Guarantor nor the Company nor any of their
respective Subsidiaries will sell, assign, lease, transfer or
- 13 -<PAGE>
otherwise dispose of (a "disposition") any assets other than (i)
dispositions to the Guarantor or the Company or a Wholly-Owned
Subsidiary of either, (ii) dispositions of inventory or used, worn-out
or surplus equipment in the ordinary course of business, (iii) the
Halsey-Taylor Disposition, (iv) the Glenco-Star Disposition, (v)
terminations of the corporate existence of a Subsidiary permitted
under Section 10.9 and (vi) dispositions of assets not otherwise
permitted by the foregoing clauses (i) through (iv) for consideration
not less than the fair market value thereof in transactions which do
not constitute either a Sale and Leaseback Transaction or a
Substantial Asset Sale.
(c) The aggregate value of consideration other than cash
and readily marketable cash equivalents received by the Guarantor, the
Company and their respective Subsidiaries in connection with the
disposition of any one or more assets pursuant to clause (b)(iv) above
(other than any such non-cash consideration received in connection
with the Halsey-Taylor Disposition), determined at the date of receipt
thereof, net of (A) cash or readily marketable cash equivalents
thereafter received in respect thereof and (B) consideration
represented by contingent or conditional rights to receive cash or
other property in the future where receipt thereof is uncertain, will
at no time exceed $5,000,000. If the Board of Directors of the
Guarantor or the Company shall determine in good faith the fair value
of any asset sold and of the consideration received therefor, such
determination shall be conclusive for purposes of this Section, absent
manifest error.
10.9. Corporate Existence, etc.; Business. Each of the
Company and the Guarantor will at all times preserve and keep in full
force and effect its corporate existence, and rights, permits and
franchises deemed material to its business, and those of each of its
Subsidiaries, except as otherwise specifically permitted by Section
10.8 and except that the corporate existence of any Subsidiary may be
terminated if, in the good faith judgment of the Board, such
termination is in the best interest of the Company and is not
disadvantageous to the holders of the Notes. The Company and the
Guarantor will not, and will not permit any of its Subsidiaries to,
engage in any business other than the businesses of the same general
type as conducted by the Related Companies on the date of this
Agreement (including, without limitation, the food-service equipment
business) as described in the Guarantor's Registration Statement on
Form S-4 filed with the Securities and Exchange Commission on January
27, 1994 (as amended and including the documents included therein by
reference) and other activities incidental or related to such
businesses.
10.10. Payment of Taxes and Claims; Tax Consolidation.
(a) The Company and the Guarantor each will, and will cause each of
its Subsidiaries to, pay all taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in
respect of any of its franchises, business, income or profits before
- 14 -<PAGE>
any penalty of interest accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and
supplies) for sums which have become due and payable and which by law
have or might become a Lien upon any of its properties or assets,
provided that no such charge or claim need be paid if being contested
in good faith by appropriate proceedings promptly initiated and
diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required by generally accepted
accounting principles shall have been made therefor.
(b) Except for returns including periods prior to the
Distribution, the Company and the Guarantor will not consent to or
permit the filing of or be a party to any consolidated income tax
return on behalf of itself or any of their Subsidiaries with any
Person, other than a consolidated return of the Company and the
Guarantor and their respective Subsidiaries.
10.11. Compliance with ERISA. With respect to any Plan,
neither the Guarantor nor any Subsidiary shall:
(a) engage in any "prohibited transaction" (as such term is
defined in Section 406 of ERISA or Section 4975 of the Code) for which
a civil penalty pursuant to Section 502(i) of ERISA or a tax pursuant
to Section 4975 of the Code in excess of $1,000,000 could reasonably
be expected to be imposed;
(b) incur any "accumulated funding deficiency" (as such
term is defined in Section 302 of ERISA) in excess of $1,000,000,
whether or not waived, or permit any Unfunded Liability to exceed
$1,000,000;
(c) permit the occurrence of any Termination Event which
could reasonably be expected to result in a liability to the Borrower
or any other member of the Controlled Group in excess of $1,000,000;
(d) fail to make any contribution or payment to any
Multiemployer Plan which the Guarantor or any other member of the
Controlled Group may be required to make under any agreement relating
to such Multiemployer Plan or any law pertaining thereto which results
in or could reasonably be expected to result in a liability in excess
of $1,000,000; or
(e) permit the establishment or amendment of any Plan or
fail to comply with the applicable provisions of ERISA and the Code
with respect to any Plan which could result in liability to the
Guarantor or any other member of the Controlled Group which,
individually or in the aggregate, could reasonably be expected to have
a Material Adverse Effect.
- 15 -<PAGE>
10.12. Compliance with Applicable Laws. The Company and
the Guarantor each will, and will cause each of their respective
Subsidiaries to, comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental body or regulatory
authority, a breach of which could have a Material Adverse Effect on
the business, financial condition or operations of the Related
Companies or materially impair the Company's or the Guarantor's
ability to pay the Notes or to perform or observe the provisions of
this Agreement or the Notes, except where contested in good faith and
by proper proceedings.
10.13. Maintenance of Properties; Insurance. The
Guarantor will, and will cause each Subsidiary of it to, do all things
necessary to maintain, preserve, protect and keep its Property in good
repair, working order and condition in accordance with its customary
practices. The Guarantor will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies
insurance on all their Property in such amounts and covering such
risks as is consistent with sound business practice, and the Guarantor
will furnish to each holder of Notes upon request full information as
to the insurance carried.
10.14. [Intentionally Omitted.]
10.15. [Intentionally Omitted.]
10.16. Fiscal Year. Each of the Related Companies will
maintain a fiscal year ending on the Sunday nearest to December 31;
provided, however, that a business which is newly acquired by any
Related Company as a Subsidiary or a division may continue to maintain
the same fiscal year such business maintained prior to its acquisition
(i) during such period as may be reasonably necessary to complete the
conversion of such fiscal year to a fiscal year ending on the Sunday
nearest to December 31 or (ii) so long as the maintenance of such
fiscal year has no material effect on the information included in any
of the financial statements described in Section 7; provided further
that any Person which becomes a Subsidiary as a result of the Closing
Transactions and which has a fiscal year-end other than that described
in clause(i) above may maintain such fiscal year-end.
10.17. Guaranties. Effective upon any Person becoming a
Domestic Subsidiary of the Guarantor, except, with the prior written
consent of the holders of at least 66 2/3 percent in principal amount
of the Notes at the time outstanding (excluding any Notes directly or
indirectly owned by the Guarantor or the Company or any of their
respective Subsidiaries or Affiliates), such consent not to be
unreasonably withheld (it being agreed that refusal to give such
consent based on the refusal by or on behalf of the "Required Lenders"
under the Credit Agreement to give a similar consent shall not be
deemed to be consent which is unreasonably withheld), for any Domestic
- 16 -<PAGE>
Subsidiary created in connection with a joint venture between the
Guarantor or any Subsidiary of the Guarantor and an unaffiliated third
party, each such new Domestic Subsidiary shall execute a Guaranty
substantially in the form of Exhibit J hereto; provided, that if any
Subsidiary Guarantor shall cease to be a Subsidiary of the Guarantor
as a result of any transaction permitted hereby, then so long as no
Event of Default shall have occurred and be continuing, such Guarantor
shall be released from all of its obligations under the applicable
Guaranty promptly following the request of the Company.
10.18. Investments and Purchases. The Guarantor will
not, nor will it permit any Subsidiary of it to, make or suffer to
exist any Investments (including, without limitation, loans and
advances to the Guarantor or any Subsidiary of it, and other
Investments in Subsidiaries of the Guarantor), or commitments
therefor, or to create any Subsidiary of the Guarantor or to become or
remain a partner in any partnership or joint venture, or to make any
Purchases of any Person, except:
(a) Existing Investments in Subsidiaries of the Guarantor
and other Investments in existence on the date hereof and described in
Schedule 6.15 hereto;
(b) Purchases by the Guarantor or any Subsidiary of the
Guarantor, so long as (i) no Event of Default or Potential Event of
Default has occurred and is continuing or would occur after giving
effect thereto, (ii) the Company has provided the holders of Notes
with pro forma financial statements giving effect thereto which
evidence compliance with Section 10.5, and (iii) the entity being
acquired is in substantially the same or a similar type of business as
the Guarantor and its Subsidiaries;
(c) Additional Investments by the Guarantor or any of its
Subsidiaries in the Guarantor or any Wholly-Owned Subsidiary of the
Guarantor and the creation of new Subsidiaries by the Guarantor or any
Subsidiary of the Guarantor;
(d) Investments in commercial paper maturing in 270 days or
less from the date of issuance which, at the time of acquisition, is
rated at least A-1 by Standard & Poor's Corporation ("S&P") or at
least P-1 by Moody's Investors Service, Inc. ("Moody's"), or the
equivalent thereof;
(e) Investments in direct obligations of the United States
of America or, with respect to the Foreign Subsidiaries, of the
central government of the applicable jurisdiction, or any agency
thereof, maturing in twelve months or less from the date of
acquisition thereof and which are backed by the full faith and credit
of the United States of America or such other applicable jurisdiction,
as aforesaid, provided that such direct obligations of any central
- 17 -<PAGE>
government other than the United States of America or of any agency of
any central government other than the United States of America have
implied ratings of at least A-1 by S&P or P-1 by Moody's, or the
equivalent thereof, at the time of the acquisition of such obligations
by the Guarantor or any Subsidiary of it;
(f) Investments in certificates of deposit maturing within
one year from the date of origin, bankers' acceptances, repurchase
agreements or other similar instruments issued by (i) any lender under
the Credit Agreement or (ii) any other bank or trust company organized
under the laws of the United States or any state thereof with capital,
surplus and undivided profits aggregating at least $100,000,000 and
whose commercial paper (or that of its parent corporation) is rated at
least A-1 by S&P or at least P-1 by Moody's, or the equivalent thereof
at the time of such Investment;
(g) Investments in certificates of deposit maturing within
one year from the date of origin, issued by a bank or trust company
organized under the laws of any jurisdiction other than that of the
United States of America or any state thereof and whose short-term
deposit rating at the time of such Investment is any of the three (3)
highest ratings then accorded by Moody's or another comparable rating
service;
(h) Temporary advances to officers and employees of the
Guarantor or any Subsidiary for travel and other business expenses in
the ordinary course of business;
(i) Loans to officers and employees of the Guarantor or any
Subsidiary of it, including but not limited to loans for relocation
expenses, in an aggregate amount not to exceed $500,000 at any one
time outstanding;
(j) Investments in the ordinary course of business made in
order to hedge the exposure of the Guarantor or any Subsidiary of it
to fluctuations in foreign currencies in which the Guarantor or any
Subsidiary of it has currency exposure in the ordinary course of
business;
(k) Investments in demand deposit accounts maintained in
the ordinary course of business;
(l) Investments in any fund or other pooling arrangement
which holds at least ninety percent (90 percent) of its assets in the
investments itemized in (d) through (g) above; and
(m) Investments not otherwise permitted by subsections (a)
through (l) of this Section 10.18 in an aggregate outstanding amount
not to exceed at any one time four percent (4 percent) of the
Consolidated Tangible Assets of the Guarantor and its Subsidiaries,
- 18 -<PAGE>
determined as of the last day of the Fiscal Quarter immediately
preceding any date of determination;
so long as, in any such case (except as set forth in clause (a)), (x)
no such Investment or Purchase which constitutes a Restricted Foreign
Transfer may be made or permitted to exist if it would result in the
Foreign Transfer Cap being exceeded and (y) no Subsidiary of the
Guarantor shall make any payment to the Guarantor which constitutes an
Investment unless such payment is required (i) to pay any dividend
permitted under clause (1) of the second proviso of Section 10.4 or
(ii) to effect any transaction otherwise expressly permitted
hereunder.
10.19. Capital Expenditures. The Guarantor will not, nor
will it permit any Subsidiary of it to, expend, or be committed to
expend for Capital Expenditures (including, without limitation, for
the acquisition of fixed assets) on a non-cumulative basis in the
aggregate for the Guarantor and its Subsidiaries more than $7,000,000
during either of the 1994 and 1995 Fiscal Years, $8,000,000 during the
1996 Fiscal Year and $10,000,000 during any Fiscal Year thereafter.
10.20. Lease Rentals. The Guarantor will not, nor will
it permit any Subsidiary of it to, create, incur or suffer to exist
obligations for Rentals in excess of $5,000,000 during any one Fiscal
Year on a non-cumulative basis in the aggregate for the Guarantor and
its Subsidiaries.
10.21. Environmental Matters. The Guarantor shall and
shall cause each of its Subsidiaries to (a) at all times comply in all
material respects with all applicable Environmental Laws and (b)
promptly take any and all remedial actions required under applicable
Environmental Laws in response to the presence, storage, use,
disposal, transportation or Release of any Hazardous Materials on,
under or about any real property owned, leased or operated by the
Guarantor or any of its Subsidiaries, except in any case where the
failure to do so could not reasonably be expected to have a Material
Adverse Effect. In the event that the Guarantor or any Subsidiary of
it undertakes any remedial action with respect to any Hazardous
Material on, under or about any real property, the Guarantor or such
Subsidiary shall conduct and complete such remedial action in material
compliance with all applicable Environmental Laws and in accordance
with the applicable policies, orders and directives of all foreign
federal, state and local governmental authorities, except when the
Guarantor's or such Subsidiary's liability for such presence, storage,
use, disposal, transportation or Release of any Hazardous Material is
being contested in good faith by the Guarantor or such Subsidiary and
appropriate reserves therefor have been established. If a holder of
any Note at any time has a reasonable basis to believe that there may
be a material violation of any Environmental Law by the Guarantor or
any of its Subsidiaries, or any material liability arising thereunder
- 19 -<PAGE>
or related to a Release of Hazardous Materials on any real property
owned, leased or operated by the Guarantor or any of its Subsidiaries
or a Release on real property adjacent to such real property, then the
Guarantor shall, upon the reasonable request of such holder, provide
such holder with all such reports, certificates, engineering studies
and other written material or data as such holder may reasonably
request.
10.22. Agreements as to Prohibited Acts. Neither the
Guarantor nor any Subsidiary of it shall agree or in any manner commit
itself to take or fail to take any action which, if taken or not
taken, as applicable, would constitute a breach of this Agreement.
10.23. Inconsistent Agreements. The Guarantor shall not,
nor shall it permit any Subsidiary of it to, enter into any indenture,
agreement, instrument or other arrangement which, directly or
indirectly prohibits or restrains the amending of this Agreement or
the Subsidiary Guaranties.
SECTION 11. EVENTS OF DEFAULT; ACCELERATION.
If any of the following conditions or events ("Events of
Default") shall occur and be continuing:
(a) the Company shall default in the payment of any
principal of or premium, if any, on any Note when the same becomes due
and payable, whether at maturity or at a date fixed for prepayment or
by declaration or otherwise; or
(b) the Company shall default in the payment of any
interest on any Note for two days after the date such interest becomes
due and payable; or
(c) the Company or the Guarantor shall default in the
performance of or compliance with any term contained in Section 7(h)
or Sections 10.1, 10.2, 10.4, 10.5, 10.8, 10.11, and 10.16 through
10.23 (inclusive); or
(d) any Related Company (other than the Company or the
Guarantor) shall fail to observe or perform any covenant contained in
Sections 10.1, 10.2, 10.4, 10.8, 10.11, and 10.16 through 10.23
(inclusive); or
(e) any Related Company shall default in the performance of
or compliance with any term contained in any Financing Document other
than the terms of this Agreement referred to above in this Section 11
and such default shall not have been remedied within 30 days after any
Responsible Officer of the Company knew of such default; or
- 20 -<PAGE>
(f) any representation or warranty made in writing by or on
behalf of the Company or the Guarantor in this Agreement or in any
instrument furnished in compliance with or in connection with this
Agreement otherwise made in writing in connection with the
transactions contemplated by this Agreement shall prove to have been
false or incorrect in any material respect on the date as of which
made; or
(g) any Related Company shall default (as principal or
guarantor or other surety) in the payment of any principal of or
premium or interest on any Material Debt (other than under this
Agreement or the Notes) when due or within any applicable period of
grace, other than the failure to make any payment in respect of Debt
which is identified on Exhibit D to the Original Agreements as being
(i) subject to the MGT Commitment, or (ii) covered by the HI
Indemnity, the maturity of which Debt referred to in clause (i) or
(ii) shall have been accelerated directly as a result of the
consummation of the Transaction (in whole or in part) or any of the
actions contemplated thereby provided that payment pursuant to the MGT
Commitment or the HI Indemnity (as appropriate) shall have been made
within thirty (30) days after demand therefor, but in any event, with
respect to a payment pursuant to the MGT Commitment, prior to the
expiration of the MGT Commitment; or
(h) a "Default" shall occur as such term is defined in the
Note Pledge Agreement or if any event shall occur or condition shall
exist in respect of any Material Debt (other than under this Agreement
or the Notes) or under any evidence of any such Material Debt or of
any mortgage, indenture or other agreement relating thereto the effect
of which is to cause (or to permit one or more Persons to cause) such
Material Debt to become due before its stated maturity or before its
regularly scheduled dates of payment, and such default, event or
condition shall continue for more than the period of grace, if any,
specified therein and shall not have been waived pursuant thereto,
other than the consummation of the Transaction (in whole or in part)
or any of the actions contemplated thereby, to the extent any thereof
results, or with the giving of notice or lapse of time or both, could
result in the acceleration of the maturity of any Debt which is
identified on Exhibit D as being (i) subject to the MGT Commitment or
(ii) covered by the HI Indemnity, provided that the MGT Commitment or
the HI Indemnity, as appropriate, shall be in full force and effect;
or
(i) any Related Company shall (i) be generally not paying
its debts as they become due, (ii) file, or consent by answer or
otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy or insolvency law
of any jurisdiction, (iii) make an assignment for the benefit of its
creditors, (iv) consent to the appointment of a custodian, receiver,
- 21 -<PAGE>
trustee or other officer with similar powers of itself or of any
substantial part of its property, (v) be adjudicated insolvent or (vi)
take corporate action for the purpose of any of the foregoing; or
(j) a court or governmental authority of competent
jurisdiction shall enter an order appointing, without consent by any
Related Company a custodian, receiver, trustee or other officer with
similar powers with respect to it or with respect to any substantial
part of its property, or if an order for relief shall be entered in
any case or proceeding for liquidation or reorganization or otherwise
to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation
of the Related Company, or if any petition for any such relief shall
be filed against any Related Company and such petition shall not be
dismissed within 30 days; or
(k) a final judgment or judgments shall be rendered against
any Related Company for the payment of money in excess of $500,000
with respect to any one judgment and $2,000,000 in the aggregate, and
any one of such judgments shall not be discharged or execution thereon
stayed pending appeal, within 30 days after entry thereof, or, in the
event of such a stay, such judgment shall not be discharged within 30
days after such stay expires; or
(l) the HI Indemnity shall at any time be cancelled or
amended without the prior written consent of the holders of at least
66-2/3 percent in aggregate principal amount of the Notes; or
(m) the Company shall at any time not be a Wholly-Owned
Subsidiary of the Guarantor;
then, (x) upon the occurrence of any Event of Default described in
subdivision (i) or (j) of this Section 11 with respect to the Company
(other than such an Event of Default described in clause (i) of
subdivision (i) or described in clause (vi) of subdivision (i) by
virtue of the reference in such clause (vi) to such (i)), the unpaid
principal amount of and accrued interest on the Notes shall
automatically become due and payable or (y) upon the occurrence of any
other Event of Default, any holder or holders of 51 percent or more in
principal amount of the Notes at the time outstanding (excluding any
Notes directly or indirectly owned by the Related Companies or
Affiliates) may at any time (unless all defaults shall theretofore
have been remedied) at its or their option, by written notice or
notices to the Company, declare all the Notes to be due and payable,
whereupon the same shall forthwith mature and become due and payable,
together with interest accrued thereon and, in either case, there
shall also be due and payable on each Note to the extent permitted by
applicable law a Make-Whole Premium determined in respect of the date
on which the unpaid amount of such Note became due and payable
pursuant to this Section 11 and of the unpaid principal amount of such
- 22 -<PAGE>
Note on such date, all without presentment, demand, protest or further
notice, which are hereby waived, provided that during the existence of
an Event of Default described in subdivision (a) or (b) of this
Section 11, then, irrespective of whether the holder or holders of 51
percent or more in principal amount of Notes then outstanding
(excluding an, Notes directly or indirectly owned by the Related
Companies or Affiliates) shall have declared all the Notes to be due
and payable pursuant to this Section 11, any holder of the Notes
(other than the Related Companies or Affiliates) at the time
outstanding may, at its option, by notice in writing to the Company,
declare the Notes then held by such holder to be due and payable,
whereupon the Notes then held by such holder shall forthwith mature
and become due and payable, together with interest accrued thereon
and, to the extent permitted by applicable law, a Make-Whole Premium
determined in respect of the date on which the unpaid amount of such
Note became due and payable pursuant to this Section 11 and of the
unpaid principal amount of such Note on such date, without
presentment, demand, protest or notice, all of which are hereby
waived.
At any time after the principal of, and interest accrued on,
all the Notes are declared due and payable, the holders of more than
51 percent in aggregate principal amount of the Notes then outstanding
(excluding any Notes directly or indirectly owned by the Related
Companies or Affiliates), by written notice to the Company, may
rescind and annul any such declaration and its consequences (other
than in respect of any Note which has been individually accelerated
pursuant to the proviso contained in the immediately preceding
paragraph) if (x) the Company has paid all overdue interest on the
Notes, the principal of and premium, if any, on any Notes which have
become due otherwise than by reason of such declaration, and interest
on such overdue principal and premium and (to the extent permitted by
applicable law) any overdue interest, in respect of the Notes at the
rate of 12.43 percent per annum, (y) all Events of Default, other than
non-payment of amounts which have become due solely by reason of such
declaration, and all conditions and events which constitute Events of
Default or Potential Events of Default have been cured or waived, and
(z) no judgment or decree has been entered for the payment of any
monies due pursuant to the Notes or this Agreement; but no such
rescission and annulment shall extend to or affect any Subsequent
Event of Default or Potential Event of Default or impair any right
consequent thereon.
SECTION 12. REMEDIES ON DEFAULT, ETC.
In case any one or more Events of Default or Potential
Events of Default shall occur and be continuing, the holder of any
Note at the time outstanding may proceed to protect and enforce the
rights of such holder by an action at law, suit in equity or other
- 23 -<PAGE>
appropriate proceeding, whether for the specific performance of any
agreement contained herein or in such Note, or for an injunction
against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or
otherwise. In case of a default in the payment of any principal of or
premium, if any, or interest on any Note, the Company will pay to the
holder thereof such further amount as shall be sufficient to cover the
cost and expenses of collection, including, without limitation,
reasonable attorneys, fees, expenses and disbursements, and any out-
of-pocket costs and expenses of any such holder incurred in connection
with analyzing, evaluating, protecting, ascertaining, defending or
enforcing any of its rights as set forth in this Agreement and the
Note. No course of dealing and no delay on the part of any holder of
any Note in exercising any right, power or remedy shall operate as a
waiver thereof or otherwise prejudice such holder's rights, powers or
remedies. No right, power or remedy conferred by this Agreement or by
any Note upon any holder thereof shall be exclusive of any other
right, power or remedy referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise.
SECTION 13. DEFINITIONS.
13.1. Definitions. As used herein the following terms
have the following respective meanings:
Accounts: means all present and future rights of a Person
to payment for goods sold or leased or for services rendered, whether
or not they have been earned by performance.
Adjusted Consolidated Tangible Net Worth: means at any date
(a) the Consolidated Net Worth of the Guarantor and its Subsidiaries,
minus (b) the consolidated Intangible Assets of the Guarantor and its
Subsidiaries, plus (c) the Intangible Assets acquired by the Guarantor
or its Subsidiaries in connection with or resulting from the
transactions contemplated by the Merger Agreement and the Purchase
Agreement (less any depreciation or amortization thereof through the
date of determination), plus (d) the Intangible Assets acquired by the
Guarantor or its Subsidiaries in connection with or resulting from any
Purchases consummated after the date hereof which, in the aggregate,
do not exceed the lesser of (i) $12,000,000 and (ii) sixty percent (60
percent) of the aggregate purchase price (including consideration paid
and liabilities assumed) of such Purchases.
Affiliate: as applied to any Person, any Person directly or
indirectly controlling or controlled by or under common control with
such Person or any Subsidiary of such Person, including (without
limitation) any Person beneficially owning or holding 10 percent or
more of any class of voting securities, provided that, for purposes of
this definition, "control" (including, with correlative meanings, the
- 24 -<PAGE>
terms "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership
of voting securities or by contract or otherwise, and provided further
that neither any holder of Notes nor any other Person which is an
institution shall be deemed to be an Affiliate of the Guarantor, the
Company or any of their respective Subsidiaries solely by reason of
ownership of the Notes or other securities issued in exchange for the
Notes or by reason of having the benefits of any agreements or
covenants of the Guarantor and the Company contained in this
Agreement.
Agreement Accounting Principles: means generally accepted
United States accounting principles as in effect from time to time,
applied in a manner consistent with that used in preparing the
financial statements referred to in Section 7; provided, that for
purposes of determining compliance with the financial covenants set
forth in Section 10.5, "Agreement Accounting Principles" shall mean
such accounting principles as in effect on the date of this Agreement,
together with any such other accounting principles which take effect
after the date of this Agreement to the extent agreed to by the
Company and the holders of more than 51 percent in aggregate principal
amount of the Notes then outstanding (excluding any Notes directly or
indirectly owned by the Related Companies or Affiliates).
Amendment Agreement: that certain Amendment Agreement dated
as of April 29, 1994 among the Company, the Guarantor and the Holders.
Board: the Board of Directors of a Person or a committee of
directors of a Person lawfully exercising the relevant powers of the
Board.
Booth: means Booth, Inc., a Texas corporation.
Business Day: any day except a Saturday, Sunday or other
day on which commercial banks in New York, New York, Chicago,
Illinois, or Hartford, Connecticut are authorized or required by law
to close.
Capital Expenditures: without duplication, any expenditures
for any purchase or other acquisition for value of any asset that is
classified on a consolidated balance sheet of the Guarantor and its
Subsidiaries prepared in accordance with Agreement Accounting
Principles as a fixed or capital asset, excluding (a) the cost of
assets acquired under Capitalized Lease Obligations, (b) expenditures
of insurance proceeds to rebuild or replace any asset after a casualty
loss, (c) leasehold improvement expenditures for which the Guarantor
or a Subsidiary of it is reimbursed promptly by the lessor and (d)
- 25 -<PAGE>
assets acquired pursuant to a merger permitted under this Agreement or
a Purchase or Investment permitted under this Agreement.
Capitalized Lease: of a Person means any lease of Property
by such Person as lessee which would be capitalized on a balance sheet
of such Person prepared in accordance with Agreement Accounting
Principles.
Capitalized Lease Obligation: of a Person means the amount
of the obligations of such Person under Capitalized Leases which would
be shown as a liability on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.
Cash Flow Coverage Ratio: means, with respect to the
Guarantor on a consolidated basis with its Subsidiaries, at any time,
the ratio of (a) the sum of (i) Net Income for such period (excluding
extraordinary gains but including extraordinary losses) plus (ii) the
aggregate amounts deducted in determining Net Income for such period
in respect of (A) non-cash interest charges, (B) the deferred portion
of the provision for income taxes, (C) amortization of debt discount
and intangibles, (D) depreciation, depletion, amortization and other
similar non-cash charges, (E) non-cash charges mandated by the
Financial Accounting Standards Board and (F) unamortized fees and
redemption premiums paid in connection with the redemption or
repayment of Indebtedness to (b) the Consolidated Funded Debt of such
Persons.
Change in Control: (a) the acquisition by any Person, or
two or more Persons acting in concert, of beneficial ownership (within
the meaning of Rule 13d-3 of the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 30 percent or more of
the outstanding shares of voting stock of the Guarantor, but excluding
any such acquisition effected in connection with the transactions
contemplated by the Purchase Agreement or the Merger Agreement, or (b)
during any period of 25 consecutive calendar months, commencing on the
date of this Agreement, the ceasing of those individuals (the
"Continuing Directors") who (i) were directors of the Guarantor on the
first day of each such period or (ii) subsequently became directors of
the Guarantor and whose initial election or initial nomination for
election subsequent to that date was approved by a majority of the
Continuing Directors then on the board of directors of the Guarantor,
to constitute a majority of the board of directors of the Guarantor.
Closing Date: shall have the meaning ascribed to such term
in the Original Agreements.
Closing Transactions: the term "Closing Transactions" shall
have the meaning assigned to such term in the Credit Agreement as in
effect on the date hereof.
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Code: the Internal Revenue Code of 1986, as amended from
time to time.
Company: Scotsman Group Inc., a Delaware corporation, and,
to the extent permitted hereby, its successors and assigns.
Consolidated or consolidated: when used in connection with
any calculation, means a calculation to be determined on a
consolidated basis for the Guarantor and its Subsidiaries in
accordance with Agreement Accounting Principles.
Consolidated Net Worth: means at any date the consolidated
stockholders' equity of the Guarantor and its Subsidiaries determined
in accordance with Agreement Accounting Principles, without giving
effect to any changes in the accumulated translation adjustments
account of any such Persons after the last day of the fiscal year of
such Person most recently ended on or prior to the date hereof.
Contingent Obligation: of a Person means any agreement,
undertaking or arrangement by which such Person assumes, guarantees,
endorses, contingently agrees to purchase or provide funds for the
payment of, or otherwise becomes or is contingently liable upon, the
obligation or liability of any other Person, or agrees to maintain the
net worth or working capital or other financial condition of any other
Person, or otherwise assures any creditor of such other Person against
loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or application for a letter of credit,
but excluding any endorsements of other items for collection or
deposit in the ordinary course of business.
Controlled Group: means all members of a controlled group
of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Guarantor
or the Company on and after April 17, 1989, are treated as a single
employer under Section 414 of the Code.
Credit Agreement: the Credit Agreement among the Company,
certain of its Subsidiaries, certain financial institutions and The
First National Bank of Chicago, as agent, as amended, supplemented or
otherwise modified from time to time.
Delfield: The Delfield Company, a Delaware corporation.
DFC: DFC Holding Corporation, a Delaware corporation.
Distribution: the distribution of the common stock of the
Guarantor by HI to the shareholders of HI, as described in the Form
10.
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Dividend: the declaration and payment by the Company to HI
on April 14, 1989 of a dividend in the amount of $10,000,000.
Domestic Subsidiary: means a Subsidiary of the Guarantor
organized under the laws of the United States or any political
subdivision or any agency, department or instrumentality thereof.
Domestic Transfer: any (a) payment of a dividend by any
Foreign Subsidiary to the Guarantor or any Domestic Subsidiary, (b)
sale, lease or other disposition of Property in which (i) assets are
transferred or services are rendered by any Foreign Subsidiary to the
Guarantor or any Domestic Subsidiary for less then fair market value
or (ii) assets are transferred or services are rendered by the
Guarantor or any Domestic Subsidiary to any Foreign Subsidiary for
greater than fair market value, (c) any repayment by any Foreign
Subsidiary to the Guarantor or any Domestic Subsidiary of any
Investment thereby or (d) any sale of assets or stock of any Foreign
Subsidiary by the Guarantor or any Domestic Subsidiary. For the
purposes of clause (b) of this definition: (x) the fair market value
of each sale, lease or other disposition of manufactured products
services shall be equal to the sum of (i) the variable costs of such
manufacturing such product (determined in each case in accordance with
the methods used as of the date hereof by the Foreign Subsidiaries to
determine such variable costs) plus (ii) 10 percent of such variable
costs; and (y) any royalty charged by any Foreign Subsidiary to the
Guarantor or a Domestic Subsidiary for the use of a trademark, trade
name or service mark shall be deemed to have been charged at fair
market value.
EBITA: means, for any applicable computation period, the
Net Income of the Guarantor and its Subsidiaries on a consolidated
basis from continuing operations, plus the aggregate amounts deducted
in determining Net Income for such period in respect of (a) income,
net worth and franchise taxes, (b) interest expenses, (c) amortization
and (d) write-offs of goodwill.
Environmental Laws: as to any Person, the applicable
federal, state and local environmental, health and safety statutes,
regulations, ordinances, codes, rules, orders, decrees, directives and
standards.
ERISA: the Employee Retirement Income Security Act of 1974,
as amended from time to time.
Event of Default: the meaning specified in Section 11.
Financing Documents: this Agreement, the Notes, the
Subsidiary Guaranties, the Amendment Agreement and the Note Pledge
Agreement.
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Fiscal Quarter: means one of the four 13 week (or, with
respect to the fourth such period in each Fiscal Year which has 53
weeks, 14 week) accounting periods in each Fiscal Year.
Fiscal Year: means the accounting period ending on the
Sunday nearest to December 31 of each year.
Foreign Subsidiary: means a Subsidiary of the Guarantor
which is not a Domestic Subsidiary.
Foreign Transfer Cap: (a) with respect to all Restricted
Foreign Transfers, $55,000,000, less (i) the aggregate amount of all
Restricted Foreign Transfers made on or after the date hereof
(including without limitation any Restricted Foreign Transfers made in
connection with the Closing Transactions), plus (ii) the aggregate
amount of the net proceeds received by the Guarantor and its Domestic
Subsidiaries as a result of the Domestic Transfers made on or after
the date hereof and (b) with respect to Restricted Foreign Transfers
described in clauses (a), (c) and (d) of the definition thereof,
$35,000,000, less (i) the aggregate amount of all Restricted Foreign
Transfers described in clauses (a), (c) and (d) of the definition
thereof made on or after the date hereof (including without limitation
any such Restricted Foreign Transfer made in connection with the
Closing Transactions), plus (ii) the aggregate amount of the net
proceeds received by the Guarantor and its Domestic Subsidiaries as a
result of the Domestic Transfers described in clauses (a), (c) and (d)
of the definition thereof made on or after the date hereof.
Form 10: the registration statement on Form 10 for the
registration under the Securities Exchange Act of 1934 of the common
stock of the Parent Guarantor, as filed with the Securities and
Exchange Commission on February 14, 1989 and as amended through April
14, 1989.
Funded Debt: of a Person means the Indebtedness of such
Person (without double counting) other than (a) Rate Hedging
Obligations, (b) repurchase obligations or liabilities of such Person
with respect to Accounts or notes receivable sold by such Person and
(c) all Indemnified Debt.
Funding Date: shall have the meaning ascribed to such term
in the Original Agreements.
Glenco-Star Disposition: the disposition on September 28,
1992 of the business and assets of the Glenco-Star division of the
Company.
Guarantor: means Scotsman Industries, Inc., a Delaware
corporation, and its successors.
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Hazardous Materials: any toxic or hazardous waste,
substance or chemical or any pollutant, contaminant, chemical or other
substance defined or regulated pursuant to any Environmental Law,
including, without limitation, asbestos, petroleum, crude oil or any
fraction thereof.
HI: Household International, Inc., a Delaware corporation.
HI Indemnity: the indemnity agreement dated April 14, 1989
between the Company and HI pursuant to which HI indemnifies the
Company for all liabilities incurred in connection with the Debt
listed on Exhibit D to the Original Agreements which is identified as
being covered by the HI Indemnity.
Holders: is defined in the introductory paragraph hereof.
Indebtedness: of a Person means such Person's (a)
obligations for borrowed money, (b) obligations representing the
deferred purchase price of Property or services (other than accounts
payable arising in the ordinary course of such Person's business
payable on terms customary in the trade), (c) obligations, whether or
not assumed, secured by Liens (other than Liens described under
Section 10.2(a) through (d)) or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such
Person, (d) obligations which are evidenced by notes, acceptances, or
other instruments, (e) Capitalized Lease Obligations, (f) Rate Hedging
Obligations, (g) Contingent Obligations, (h) obligations for which
such Person is obligated pursuant to or in respect of a letter of
credit and (i) repurchase obligations or liabilities of such Person
with respect to Accounts or notes receivable sold by such Person, in
each case other than Indemnified Debt.
Indemnified Debt: means all Indebtedness as to which the
Guarantor and its Subsidiaries are indemnified against pursuant to the
HI Indemnity and as to which any claims for indemnification thereunder
are actually paid to such Persons within one year following the making
of any claim therefor.
Intangible Assets: of a Person means the amount of such
Person's unamortized debt discount and expense (other than deferred
expenses related to the transactions contemplated by the Credit
Agreement), unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, organization or
developmental expenses and other intangible items.
Interest Expense Coverage Ratio: for any applicable
computation period of the Guarantor, the ratio of EBITA to the
interest expenses deducted in determining Net Income of the Guarantor
and its Subsidiaries on a consolidated basis for such period, all as
determined in accordance with Agreement Accounting Principles.
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Investment: of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made
in the ordinary course of business), extension of credit (other than
accounts receivable arising in the ordinary course of business on
terms customary in the trade), deposit account or contribution of
capital by such Person to any other Person or any investment in, or
purchase or other acquisition of, the stock, partnership interests,
notes, debentures or other securities of any other Person made by such
Person.
Leverage Ratio: with respect to the Guarantor on a
consolidated basis with its Subsidiaries, at any time, the ratio of
(a) the Consolidated Funded Debt of such Persons to (b) Consolidated
Net Worth.
Lien: as to any Person, any mortgage, lien, pledge, adverse
claim, charge, security interest or other encumbrance in or on, or any
interest or title of any vendor, lessor, lender or other secured party
to or of such Person under any conditional sale or other title
retention agreement or Capitalized Lease with respect to, any property
or asset owned or held by such Person, or the signing or filing of a
financing statement which names such person as debtor, or the signing
of any security agreement authorizing any other party as the secured
party thereunder to file any financing statement.
Make-Whole Premium: an amount, if any, by which (a) the
present value as of the date in respect of which the Make-Whole
Premium is to be determined of all scheduled principal and interest
payments thereafter due on the portion of the principal amount of the
Note in respect of which the Make-Whole Premium is to be determined
discounted semiannually at a rate equal to the then existing yield to
maturity of U.S. Treasury Securities with an average life to maturity
nearest to the remaining Weighted Average Life to Maturity of such
Note, as determined by reference to the then most recent Federal
Reserve Statistical Release H.15(519) which has become publicly
available (or, if such Statistical Release is no longer published, any
publicly available source of similar market data), exceeds (b) the
portion of the principal amount of the Note in respect to which the
Make-Whole Premium is to be determined.
Material Adverse Effect: with respect to any matter that
such matter (i) could reasonably be expected to materially and
adversely affect the business, properties, condition (financial or
otherwise), or results of operations of the Guarantor and its
Subsidiaries or the Company and its Subsidiaries, in each case
considered as a whole or (ii) by or before any court or arbitrator or
any governmental body, agency or official, draws into question the
validity or enforceability of any material provision of any Financing
Document against any Obligor party thereto.
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Material Debt: Debt of one or more Related Companies,
arising in one or more related or unrelated transactions, in an
aggregate principal amount exceeding $5,000,000.
Merger Agreement: The Agreement and Plan of Merger dated as
of January 11, 1994 among the Guarantor, DFC, Delfield and the other
parties named therein, as the same may be amended, supplemented or
otherwise modified from time to time.
MGT Commitment: either (a) the commitment by Morgan
Guaranty Trust Company of New York dated April 13, 1989, or (b) a
commitment, in form and substance satisfactory to the holders of 51
percent of the aggregate principal amount of the Notes, by one or more
lender or lenders, in each case, to lend to the Company the lesser of
(A) $9,790,000 or (B) the principal amount outstanding under the Debt
identified on Exhibit D to the Original Agreements as being subject to
the MGT Commitment either (x) in the event of the acceleration of any
of the Debt identified on Exhibit D to the Original Agreements as
being subject to the MGT Commitment as a direct result of the
consummation of the Transaction in whole or in part, of any of the
actions contemplated thereby or (y) to refinance such Debt.
Multiemployer Plan: any Plan which is a "multiemployer
plan" (as such term is defined in Section 4001(a)(3) of ERISA).
Net Income: for any computation period, with respect to the
Guarantor on a consolidated basis with its Subsidiaries (other than
any Subsidiary (a) which is either a Domestic Subsidiary restricted
from making payments under its Subsidiary Guaranty or is a Domestic
Subsidiary that is not a party to a Subsidiary Guaranty and (b) which
is subject to a restriction on declaring or paying dividends or
otherwise advancing funds to its parent whether by contract or
otherwise which effectively restricts any such action during such
period (a "Restricted Subsidiary")), cumulative net income earned
during such period in accordance with Agreement Accounting Principles,
but including any dividends actually paid in such period by any
Restricted Subsidiary to the Guarantor or to any Subsidiary of the
Guarantor other than a Restricted Subsidiary.
Notes: the meaning specified in Section 1.1.
Note Pledge Agreement: that certain Note Pledge Agreement
dated as of April 29, 1994 between the Company and The First National
Bank of Chicago, as agent, as the same may be amended, supplemented or
otherwise modified from time to time.
Obligors: the Company and the Guarantor.
Officers' Certificate: a certificate executed on behalf of
the Company or the Guarantor by its Chairman of the Board of Directors
- 32 -<PAGE>
(if an officer) or its President or one of its Vice Presidents and its
Vice President-Finance, Treasurer, Controller or one of its Assistant
Treasurers, or other officer with comparable financial
responsibilities and, as to any partnership, a certificate executed on
behalf of such partnership by its general partner which would qualify
as an Officers' Certificate of such general partner hereunder.
PBGC: the Pension Benefit Guaranty Corporation or any
governmental authority succeeding to any of its functions.
Person: a corporation, an association, a partnership, a
joint venture, an organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.
Plan: an "employee pension benefit plan" (as defined in
Section 3 of ERISA) which is maintained by a member of the Controlled
Group for employees of a member of the Controlled Group.
Pledge Agreement: The Note Pledge Agreement dated as of the
date hereof between the Company and The National Bank of Chicago, as
agent, as amended, supplemented or modified from time to time.
Potential Event of Default: any condition or event which,
with notice or lapse of time or both, would become an Event of
Default.
Property: of a Person means any and all property, whether
real, personal, tangible, intangible, or mixed, of such Person, or
other assets owned, leased or operated by such Person.
Purchase: any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by
which the Guarantor or any of its Subsidiaries (a) acquires any going
business or all or substantially all of the assets of any Person or
division thereof, whether through purchase of assets, merger or
otherwise, or (b) directly or indirectly acquires (in one transaction
or as the most recent transaction in a series of transactions) at
least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of
the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding partnership interests of a partnership.
Purchase Agreement: The Share Acquisition Agreement dated
as of January 11, 1994 among the Guarantor, Whitlenge and certain
other parties therein, as amended, supplemented or otherwise modified
from time to time.
Rate Hedging Obligations: of a Person means any and all net
obligations of such Person, whether absolute or contingent and
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howsoever and whensoever created, arising, evidenced or acquired
(including all renewals, extensions and modifications thereof and
substitutions therefor), under (a) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto
from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection
agreements, forward rate currency or interest rate options, puts and
warrants, and (b) any and all cancellations, buybacks, reversals,
terminations or assignments of any of the foregoing, determined with
respect to interest rate agreements, by multiplying two percent (2
percent) of the notional amount thereof times the number of years
remaining to maturity.
Reimbursement Agreement: Each Application and Reimbursement
Agreement for Standby Letter of Credit and each Application and
Reimbursement Agreement for Commercial Letter of Credit and each other
similar reimbursement agreement, in each case in substantially the
form of either Exhibit C-1 or Exhibit C-2 attached to the Credit
Agreement as in effect on the date hereof.
Related Company: the Guarantor or the Company or a
Subsidiary of either.
Release: is defined in the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, 42 U.S.C. 39601
et seq.
Rentals: of a Person means the aggregate fixed amounts
payable by such Person under any operating lease of Property having an
original term (including any required renewals or any renewals at the
option of the lessor or lessee) of one year or more.
Reportable Event: a reportable event as defined in Section
4043 of ERISA and the regulations issued under such section, with
respect to a Plan, excluding, however, such events as to which the
PBGC has by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such
event; provided, that a failure to meet the minimum funding standard
of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA
or Section 412(d) of the Code.
Responsible Officer: with respect to any matter, any
officer of the Guarantor or any of its Subsidiaries who, as a result
of his level of seniority or the scope of his duties or general
- 34 -<PAGE>
exposure to the business of the Guarantor or any of its Subsidiaries,
has or ought to have knowledge of the matter in question.
Restricted Foreign Transfer: any (a) payment of a dividend
by the Guarantor or any of its Domestic Subsidiaries to any Foreign
Subsidiary, (b) sale, lease or other disposition of Property in which
(i) assets are transferred or services are rendered by the Guarantor
or any Domestic Subsidiary to any Foreign Subsidiary for less than
fair market value or (ii) assets are transferred or services are
rendered by any Foreign Subsidiary to the Guarantor or any Domestic
Subsidiary for greater than fair market value, (c) Investment by the
Guarantor or any Domestic Subsidiary in any Foreign Subsidiary or (d)
Purchase by the Guarantor or any of its Domestic Subsidiaries of the
assets or stock of any Person that would constitute a Foreign
Subsidiary. For the purposes of clause (b) of this definition: (x)
the fair market value of each sale, lease or other disposition of
manufactured products shall be equal to the sum of (i) the variable
costs of manufacturing such product (determined in each case in
accordance with the methods used as of the date hereof by the
Guarantor and its Domestic Subsidiaries to determine such variable
costs) plus (ii) 10 percent of such variable costs; (y) any royalty
charged by the Guarantor or any Domestic Subsidiary to a Foreign
Subsidiary for the use of any trademark, trade name or service mark
shall be deemed to have been charged at fair market value; and (z) any
routine management services rendered in the ordinary course of
business by the Guarantor or any Domestic Subsidiary to any Foreign
Subsidiary shall be deemed to have been rendered at fair market value.
Restricted Payment: (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of
the Guarantor now or hereafter outstanding, except (i) a dividend
payable solely in shares of stock of the Guarantor, (ii) cash payments
made in lieu of dividends of fractional shares that otherwise would be
distributed and (iii) the distribution of common stock purchase rights
as contemplated in the Form 10; and (b) any redemption, retirement,
purchase or other acquisition, direct or indirect, of any shares of
stock of the Guarantor, now or hereafter outstanding, or of any
warrants, rights or options to acquire any such shares, except to the
extent that the consideration therefor consists of shares of stock of
the Guarantor.
Sale and Leaseback Transaction: any arrangement with any
Person providing for the leasing by a Related Company of any property
that, or of any property similar to and used for substantially the
same purposes as any other property that, has been or is to be sold,
assigned, transferred or otherwise disposed of by a Related Company to
such Person with the intention of entering into such a lease.
Single Employer Plan: means a Plan subject to Title IV of
ERISA maintained by the Guarantor or any member of the Controlled
- 35 -<PAGE>
Group for employees of the Guarantor or any member of the Controlled
Group, other than a Multiemployer Plan.
Subsidiary: of a Person means (a) any corporation more than
50 percent of the outstanding securities having ordinary voting power
of which shall at the time be owned or controlled, directly or
indirectly, by such Person or by one or more of its Subsidiaries or by
such Person and one or more of its Subsidiaries, or (b) any
partnership, association, joint venture or similar business
organization more than 50 percent of the ownership interests having
ordinary voting power of which shall at the time be so owned or
controlled. Unless otherwise expressly provided, all references
herein to a "Subsidiary" shall mean a Subsidiary of the Guarantor.
Subsidiary Guaranty: each Guaranty executed and delivered
by a Subsidiary of the Guarantor for the benefit of any holder of any
Note (in its capacity as such a holder).
Substantial Asset Sale: any sale, lease or other
disposition after April 29, 1994 and during the remaining term of this
Agreement (including any transaction effected by way of merger or
consolidation) of assets (including investments in Subsidiaries or
other Persons) (i) representing in the aggregate more than 10 percent
of the consolidated assets of the Guarantor and its Subsidiaries as
reflected in the then most recent consolidated financial statements of
the Guarantor and its Subsidiaries delivered pursuant to Section 7 or
(ii) responsible in the aggregate for more than 10 percent of the
consolidated net sales or of the consolidated Net Income of the
Guarantor and its consolidated Subsidiaries as reflected in the
financial statements referred to in clause (i) above for the 12-month
period ending as of the end of the Fiscal Quarter next preceding the
date of determination.
Tangible Assets: of a Person means the amount of such
Person's total assets, determined in accordance with Agreement
Accounting Principles, less the amount of such Person's Intangible
Assets.
Termination Event: means, with respect to a Plan which is
subject to Title IV of ERISA, (a) a Reportable Event, (b) the
withdrawal of the Guarantor or any other member of the Controlled
Group from such Plan during a plan year in which the Guarantor or any
other member of the Controlled Group was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA or was deemed such under
Section 4068(f) of ERISA, (c) the termination of such Plan, the filing
of a notice of intent to terminate such Plan or the treatment of an
amendment of such Plan as a termination under Section 4041 of ERISA,
(d) the institution by the PBGC of proceedings to terminate such Plan,
(e) any event or condition which might constitute grounds under
Section 4042 of ERISA for the termination of, or appointment of a
- 36 -<PAGE>
trustee to administer, such Plan, (f) the partial or complete
withdrawal by the Guarantor or any other member of the Controlled
Group from a Multiemployer Plan, (g) any event or condition which
results in the reorganization or insolvency of a Multiemployer Plan
under Sections 4241 or 4245 of ERISA or (h) any event or condition
which results in the termination of a Multiemployer Plan under Section
4041A of ERISA or the institution by the PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
Transaction: the Dividend, the Distribution and the related
transfers of assets and assumption of liabilities described in the
Form 10.
Unfunded Liability: means the amount (if any) by which the
present value of all vested and unvested accrued benefits under a
Single Employer Plan exceeds the fair market value of assets allocable
to such benefits, all determined as of the then most recent valuation
date for such Plans using actuarial assumptions used for funding
purposes.
Weighted Average Life to Maturity: as applied to any
Indebtedness at any date, the number of years obtained by dividing (a)
the then outstanding principal amount of such Indebtedness into (b)
the total of the products obtained by multiplying (i) the amount of
each then remaining installment, sinking fund, serial maturity or
other required payment, including payment at final maturity, in
respect thereof, by (ii) the number of years (calculated to the
nearest one-twelfth) which will elapse between such date and the date
on which such payment is to be made.
Whitlenge: means Whitlenge Drink Equipment Limited, a
private company limited by shares registered in England.
Whitlenge N.V.: means Whitlenge Drink Equipment N.V., a
corporation formed under the laws of Belgium.
Wholly-Owned Subsidiary: with respect to any Person, any
Subsidiary all of the shares of capital stock or other ownership
interests of which (except directors' qualifying shares) are at the
time directly or indirectly owned by such Person; "Wholly-Owned
Domestic Subsidiary" means a Domestic Subsidiary that is a Wholly-
Owned Subsidiary of the Guarantor and "Wholly-Owned Foreign
Subsidiary" means a Foreign Subsidiary that is a Wholly-Owned
Subsidiary of the Guarantor.
13.2. Accounting Terms and Determinations.
Each accounting term referenced herein shall be determined
in accordance with Agreement Accounting Principles as in effect as of
the date hereof unless otherwise specified.
- 37 -<PAGE>
SECTION 14. GUARANTEE
14.1. The Guarantee. The Guarantor hereby
unconditionally and irrevocably guarantees to each of the Purchasers
the due and punctual payment of all present and future indebtedness
evidenced by or arising out of this Agreement and the Notes,
including, but not limited to, the due and punctual payment of
principal of and interest on the Notes and the due and punctual
payment of all other sums now or hereafter owed by the Company under
the Financing Documents as and when the same shall become due and
payable, whether at maturity, by declaration or otherwise, according
to the terms hereof and thereof. In case of failure by the Company
punctually to pay the indebtedness guaranteed hereby, the Guarantor
hereby unconditionally agrees to cause such payment to be made
punctually as and when the same shall become due and payable, whether
at maturity or by declaration or otherwise, and as if such payment
were made by the Company.
14.2. Guarantee Unconditional. The obligations of the
Guarantor under this Section 14 shall be unconditional and absolute
and, without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver
or release in respect of any obligation of the Guarantor or
Company under any Financing Document by operation of law or
otherwise (unless with respect to the Guarantor the holders of
all of the Notes shall have consented to such extension, renewal,
settlement, compromise, waiver or release);
(b) any modification or amendment of or supplement to any
Financing Document;
(c) any modification, amendment, waiver, release, non-
perfection or invalidity of any direct or indirect security, or
of any guarantee or other liability of any third party, for any
obligation of the Guarantor or Company under any Financing
Document;
(d) any change in the corporate existence, structure or
ownership of the Guarantor or the Company, or any insolvency,
bankruptcy, reorganization or other similar proceeding affecting
the Guarantor (to the extent that the release of the Guarantor is
not required by law) or the Company or their respective assets,
or any resulting release or discharge of any obligation of the
Company contained in any Financing Document;
(e) the existence of any claim, set-off or other rights
which the Guarantor may have at any time against any other
- 38 -<PAGE>
Related Company, any Purchaser or any other Person, whether or
not arising in connection with this Agreement, provided that
nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim;
(f) any invalidity or unenforceability relating to or
against the Company for any reason of any Financing Document, or
any provision of applicable law or regulation purporting to
prohibit the payment by the Company of the principal of or
interest on any Note or any other amount,payable by it under this
Agreement; or
(g) any other act or omission to act or delay of any kind
by any Related Company, any holder of any Notes or any other
Person or any other circumstance whatsoever that might, but for
the provisions of this paragraph, constitute a legal or equitable
discharge of the obligations of the Guarantor under this Section
14.
14.3. Discharge; Reinstatement. The Guarantor's
obligations under this Section 14 shall remain in full force and
effect until the principal of and interest on the Notes and all other
amounts payable by the Company under the Financing Documents shall
have been paid in full. If at any time any payment of the principal
of or interest on any Note or any other amount payable by the Company
under any Financing Document is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization
of the Company or otherwise, the Guarantor's obligations under this
Section 14 with respect to such payment shall be reinstated at such
time as though such payment had become due but had not been made at
such time.
14.4. Waiver. The Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not
provided for herein, as well as any requirement that at any time any
action be taken by any Person against the Company or any other Person.
14.5. Subrogation. Upon the making by the Guarantor of
any payment hereunder for the account of the Company, the Guarantor
shall be subrogated to the rights of the payee against the other
Obligors with respect to such payment, provided that the Guarantor
shall not enforce any right or receive any payment by way of
subrogation until all amounts of principal of and interest on the
Notes and all other amounts payable by the Company under the Financing
Documents have been paid in full.
14.6. Stay of Acceleration. If acceleration of the time
for payment of any amount payable by the Company under any Financing
Documents is stayed upon the insolvency, bankruptcy or reorganization
of the Company, all such amounts otherwise subject to acceleration
- 39 -<PAGE>
under the terms of this Agreement shall nonetheless be payable by the
Guarantor hereunder forthwith on demand by the holders of at least 66
2/3 percent in principal amount of the Notes at the time outstanding
(excluding any Notes directly or indirectly owned by the Guarantor or
the Company or any of their respective Subsidiaries or Affiliates).
SECTION 15. REGISTRATION, TRANSFER AND SUBSTITUTION OF NOTES.
15.1. Note Register: Ownership of Notes. The Company
will keep at its principal office a register in which the Company will
provide for the registration of Notes and the registration of
transfers of Notes. The Company may treat the Person in whose name
any Note is registered on such register as the owner thereof for the
purpose of receiving payment of the principal of and the premium, if
any, and interest on such Note and for all other purposes, whether or
not such Note shall be overdue, and the Company shall not be affected
by any notice to the contrary. All references in this Agreement or in
a Note to a "holder" of any Note shall mean the Person in whose name
such Note is at the time registered on such register.
15.2. Transfer and Exchange of Notes. Upon surrender of
any Note for registration of transfer or for exchange to the Company
at its principal office, the Company at its expense will execute and
deliver in exchange therefor a new Note or Notes in denominations of
at least $50,000 (except one Note may be issued in a lesser principal
amount if the unpaid principal amount of the surrendered Note is not
evenly divisible by, or is less than, $50,000), as requested by the
holder or transferee, which aggregate the unpaid principal amount of
such surrendered Note. Each such new Note shall be dated so that
there will be no loss of interest on such surrendered Note and
otherwise of like tenor, and shall be registered in the name or names
of such Person as such holder or transferee may request. Any Note in
lieu of which any such new Note has been so executed and delivered
shall not be deemed to be an outstanding Note for any purpose of this
Agreement.
15.3. Replacement of Notes. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Note and, in the case of any such loss, theft or
destruction of any Note, upon delivery of an indemnity bond in such
reasonable amount as the Company may determine (or, in the case of any
Note held by an institutional holder or its nominee, of an indemnity
agreement from such holder), or, in the case of any such mutilation,
upon the surrender of such Note for cancellation to the Company at its
principal office, the Company at its expense will execute and deliver,
in lieu thereof, a new Note in the unpaid principal amount of such
lost, stolen, destroyed or mutilated Note, dated so that there will be
no loss of interest on such Note and otherwise of like tenor. Any
Note in lieu of which any such new Note has been so executed and
- 40 -<PAGE>
delivered by the Company shall not be deemed to be an outstanding Note
for any purpose of this agreement.
SECTION 16. PAYMENTS ON NOTES.
16.1. Place of Payment on Notes. Payments of principal,
premium, if any, and interest becoming due and payable on the Notes
shall be made at the principal office of Morgan Guaranty Trust Company
in the Borough of Manhattan, the City and State of New York, unless
the Company, by written notice to each holder of any Notes, shall
designate the principal office of another bank or trust company in
such Borough as such place of payment, in which case the principal
office of such other bank or trust company shall thereafter be such
place of payment.
16.2. Home Office Payment. So long as any Holder or its
respective nominee shall be the holder of any Note, and
notwithstanding anything contained in Section 16.1 or in such Note to
the contrary, the Company will pay all sums becoming due on such Note
for principal, premium, if any, and interest by crediting before 12:00
noon, New York time, by federal funds bank wire transfer the account
of such Holder designated in the Schedule of Noteholders, or by such
other reasonable method or at such other address as such Holder shall
have from time to time specified to the Company in writing for such
purpose, without the presentation or surrender of such Note or the
making of any notation thereon, except that any Note paid or prepaid
in full shall, after such payment or prepayment in full, be
surrendered to the Company at its principal office or at the place of
payment maintained by the Company pursuant to Section 16.1 for
cancellation. Prior to any sale or other disposition of any Note held
by such Holder or its nominee such Holder will, at its election,
either endorse thereon the amount of principal paid thereon and the
last date to which interest has been paid thereon or surrender such
Note to the Company in exchange for a new Note or Notes pursuant to
Section 16.2. The Company will afford the benefits of this Section
16.2 to any institutional investor which is the direct or indirect
transferee of any Note purchased by an Original Purchaser and which
has made the same agreement relating to such Note as made in this
Section 16.2.
SECTION 17. EXPENSES, ETC.
Whether or not the transactions contemplated by this
Agreement shall be consummated, the Company will pay and will
indemnify and hold each holder of any Notes harmless in respect of all
expenses in connection with such transactions and in connection with
any amendments or waivers (whether or not the same become effective)
- 41 -<PAGE>
under or in respect of the Financing Documents including, without
limitation:
(a) the cost and expenses of preparing and reproducing the
Financing Documents, of furnishing all opinions by counsel for the
Company and all other opinions referred to herein (including any
opinions requested by your in-house counsel or special counsel as to
any legal matter arising hereunder) and all certificates on behalf of
the Company, and of the performance of and compliance with all
agreements and conditions contained herein and on its part, to be
performed or complied with;
(b) the allocated costs, expenses and disbursements of your
in-house counsel and the reasonable fees, expenses and disbursements
of your special counsel, if any, in connection with such transactions
and any such amendments or waivers (whether or not such amendments or
waivers become effective);
(c) the reasonable out-of-pocket expenses incurred by you
in connection with such transactions and any such amendments or
waivers;
(d) all claims in respect of the fees, if any, of brokers
and finders;
(e) any and all liabilities with respect to any and all
taxes including interest and penalties (including, without limitation,
all recording or filing fees and all mortgage, documentary stamp or
similar taxes) which may be payable in respect of the execution,
delivery, filing or recording of any Financing Documents or, the issue
of the Notes and any amendment or waiver under or in respect of the
Financing Documents; and
(f) the cost of obtaining a Private Placement Number from
Standard & Poor's CUSIP Service Bureau with respect to the Notes.
SECTION 18. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained in the
Financing Documents, or otherwise made in writing by or on behalf of
the Company and the Guarantor, in connection with the transactions
contemplated by the Financing Documents, shall survive the execution
and delivery of this Agreement, any investigation at any time made by
any holder of Notes or on its behalf, the purchase of the Notes and
any disposition or payment of the Notes. All statements contained in
any certificate or other instrument delivered by or on behalf of the
Company and the Guarantor, pursuant to the Financing Documents or in
connection with the transactions contemplated by the Financing
- 42 -<PAGE>
Documents, shall be deemed representations and warranties of the
Company and the Guarantor under this Agreement.
SECTION 19. AMENDMENTS AND WAIVERS.
Any term of this Agreement or of the Notes may be amended
and the observance of any term of this Agreement or of the Notes may
be waived (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the
Company and the Guarantor and the holders of at least 66 2/3 percent
in principal amount of the Notes at the time outstanding (excluding
any Notes directly or indirectly owned by the Guarantor or the Company
or any of their respective Subsidiaries or Affiliates), provided that,
without the prior written consent of the holders of all the Notes at
the time outstanding (excluding any Notes directly or indirectly owned
by the Guarantor or the Company or any of their respective
Subsidiaries or Affiliates), no such amendment or waiver shall (a)
change the maturity or the principal amount of, or reduce the rate or
change the time of payment of interest on, or change the amount or the
time of payment of any principal or premium payable on any prepayment
of, any Note, (b) reduce the aforesaid percentages of the principal
amount of the Notes the holders of which are required to consent to
any such amendment or waiver, (c) change the percentage of the
principal amount of the Notes the holders of which may declare the
Notes to be due and payable as provided in Section 11 or (d) decrease
the percentage of the principal amount of the Notes the holders of
which may rescind and annul any such declaration as provided in
Section 11. Any amendment or waiver effected in accordance with this
Section 19 shall be binding upon each holder of any Note at the time
outstanding, each future holder of any Note, the Company and the
Guarantor.
SECTION 20. NOTICES, ETC.
Except as otherwise provided in this Agreement, notices and
other communications under this Agreement shall be in writing and
shall be delivered, or shall be sent by certified or registered mail,
return receipt requested, by first-class mail, postage prepaid and
addressed, (a) if to a Holder, at the address set forth in the
Schedule of Noteholders or at such other address as it shall have
furnished to the Company, except as otherwise provided in Section 16.2
with respect to payments on Notes held by it or its nominee, or (b) if
to any other holder of any Note, at such address as such other holder
shall have furnished to the Company in writing, or, until any such
other holder so furnishes to the Company an address, then to and at
the address of the last holder of such Note who has furnished an
address to the Company or (c) if to the Company, at the address for
the Company set forth in the heading of this Agreement, to the
- 43 -<PAGE>
attention of Vice President Finance, or at such other address, or to
the attention of such other officer, as the Company shall have
furnished each holder in writing, or (d) if to the Guarantor, at the
address for the Guarantor set forth in the heading of this Agreement,
to the attention of Vice President-Finance, or at such other address,
or to the attention of such other officer, as the Guarantor shall have
furnished to each holder in writing. Any notice so addressed and
mailed by first-class mail shall be deemed to be given three business
days after being so mailed.
SECTION 21. REPRODUCTION OF DOCUMENTS.
All Financing Documents, and all documents relating thereto,
including, without limitation, (a) consents, waivers and modifications
which may hereafter be executed, (b) documents received by the
Original Purchasers on the Closing Date or the Funding Date (except
the Notes themselves) and documents received by the Holders on the
date hereof, and (c) financial statements, certificates and other
information previously or hereafter furnished to the Holders, may be
reproduced by the Holders by an photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and the
Holders may destroy any original document so reproduced. The
Guarantor and the Company each agrees and stipulates that, to the
extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or
administrative proceeding (whether or not the original is in existence
and whether or not such reproduction was made by the Holders in the
regular course of business) and any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in
evidence.
SECTION 22. MISCELLANEOUS.
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, whether so expressed or not, and, in
particular, shall inure to the benefit of and be enforceable by any
holder or holders at the time of the Notes or any part thereof.
Except as stated in Section 18, the Financing Documents embody the
entire agreement and understanding between the Holders and the Company
and the Guarantor and supersede all prior agreements and
understandings relating to the subject matter hereof. This Agreement
and the Notes shall be construed and enforced in accordance with and
governed by the law of the State of Illinois. The headings in this
Agreement are for purposes of reference only and shall not limit or
otherwise affect the meaning hereof. This Agreement may be executed
in any number of counterparts, each of which shall be an original, but
all of which together shall constitute one instrument.
- 44 -<PAGE>
SECTION 23. REFERENCES IN OTHER AGREEMENTS.
Each reference to the Original Agreement in any Note shall
hereafter be deemed to be a reference to this Agreement as it may be
amended from time to time.
- 45 -<PAGE>
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterparts of this letter and
return one of the same to the Company, whereupon this letter shall
become a binding agreement among you and the Company and the
Guarantor.
Very truly yours,
SCOTSMAN GROUP INC.
By: /s/ Donald D. Holmes
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
SCOTSMAN INDUSTRIES, INC.
By: /s/ Donald D. Holmes
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
The foregoing Agreement is hereby agreed to as of the date thereof.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY*
By CIGNA Investments, Inc.
By:
-------------------------------
Name:
Title:
* (Such entity is either the registered owner of one or more of the
Notes or is a beneficial owner of one or more of the Notes owned by
and registered in the name of a nominee for such entity.)
- 43 -<PAGE>
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterparts of this letter and
return one of the same to the Company, whereupon this letter shall
become a binding agreement among you and the Company and the
Guarantor.
Very truly yours,
SCOTSMAN GROUP INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
SCOTSMAN INDUSTRIES, INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
The foregoing Agreement is hereby agreed to as of the date thereof.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY*
By CIGNA Investments, Inc.
By: /s/ Deborah B. Wiacek
-------------------------------
Name: Deborah B. Wiacek
Title: Vice President
* (Such entity is either the registered owner of one or more of the
Notes or is a beneficial owner of one or more of the Notes owned by
and registered in the name of a nominee for such entity.)
- 43 -<PAGE>
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterparts of this letter and
return one of the same to the Company, whereupon this letter shall
become a binding agreement among you and the Company and the
Guarantor.
Very truly yours,
SCOTSMAN GROUP INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
SCOTSMAN INDUSTRIES, INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
The foregoing Agreement is hereby agreed to as of the date thereof.
CONNECTICUT GENERAL LIFE INSURANCE COMPANY*,
on behalf of one or more separate accounts
By CIGNA Investments, Inc.
By: /s/ Deborah B. Wiacek
-------------------------------
Name: Deborah B. Wiacek
Title: Vice President
* (Such entity is either the registered owner of one or more of the
Notes or is a beneficial owner of one or more of the Notes owned by
and registered in the name of a nominee for such entity.)
- 43 -<PAGE>
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterparts of this letter and
return one of the same to the Company, whereupon this letter shall
become a binding agreement among you and the Company and the
Guarantor.
Very truly yours,
SCOTSMAN GROUP INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
SCOTSMAN INDUSTRIES, INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
The foregoing Agreement is hereby agreed to as of the date thereof.
CIGNA PROPERTY AND CASUALTY INSURANCE COMPANY*
By CIGNA Investments, Inc.
By: /s/ Deborah B. Wiacek
-------------------------------
Name: Deborah B. Wiacek
Title: Vice President
* (Such entity is either the registered owner of one or more of the
Notes or is a beneficial owner of one or more of the Notes owned by
and registered in the name of a nominee for such entity.)
- 43 -<PAGE>
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterparts of this letter and
return one of the same to the Company, whereupon this letter shall
become a binding agreement among you and the Company and the
Guarantor.
Very truly yours,
SCOTSMAN GROUP INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
SCOTSMAN INDUSTRIES, INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
The foregoing Agreement is hereby agreed to as of the date thereof.
LIFE INSURANCE COMPANY OF NORTH AMERICA*
By CIGNA Investments, Inc.
By: /s/ Deborah B. Wiacek
-------------------------------
Name: Deborah B. Wiacek
Title: Vice President
* (Such entity is either the registered owner of one or more of the
Notes or is a beneficial owner of one or more of the Notes owned by
and registered in the name of a nominee for such entity.)
- 43 -<PAGE>
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterparts of this letter and
return one of the same to the Company, whereupon this letter shall
become a binding agreement among you and the Company and the
Guarantor.
Very truly yours,
SCOTSMAN GROUP INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
SCOTSMAN INDUSTRIES, INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
The foregoing Agreement is hereby agreed to as of the date thereof.
INA LIFE INSURANCE COMPANY OF NEW YORK*
By CIGNA Investments, Inc.
By: /s/ Deborah B. Wiacek
-------------------------------
Name: Deborah B. Wiacek
Title: Vice President
* (Such entity is either the registered owner of one or more of the
Notes or is a beneficial owner of one or more of the Notes owned by
and registered in the name of a nominee for such entity.)
- 43 -<PAGE>
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterparts of this letter and
return one of the same to the Company, whereupon this letter shall
become a binding agreement among you and the Company and the
Guarantor.
Very truly yours,
SCOTSMAN GROUP INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
SCOTSMAN INDUSTRIES, INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
The foregoing Agreement is hereby agreed to as of the date thereof.
OHIO NATIONAL LIFE ASSURANCE CORPORATION
By: /s/ Michael A. Boedeker
-------------------------------
Name: Michael A. Boedeker
Title: Vice President, Fixed Income Securities
- 43 -<PAGE>
If you are in agreement with the foregoing, please sign the
form of agreement on the accompanying counterparts of this letter and
return one of the same to the Company, whereupon this letter shall
become a binding agreement among you and the Company and the
Guarantor.
Very truly yours,
SCOTSMAN GROUP INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
SCOTSMAN INDUSTRIES, INC.
By:
-------------------------------
Name: Donald D. Holmes
Title: Vice President - Finance
The foregoing Agreement is hereby agreed to as of the date thereof.
SOUTHERN FARM BUREAU LIFE INSURANCE COMPANY
By: /s/ Carol Robertson
-------------------------------
Name: Carol Robertson, CFA
Title: Securities Coordinator
- 43 -<PAGE>
SCHEDULE OF NOTEHOLDERS
Purchaser Name CONNECTICUT GENERAL LIFE INSURANCE COMPANY
Name in Which Note is CIG & Co.
to be Registered
Principal Amount $10,700,000
Payment on Account of
Note
Method Federal Funds Wire Transfer
Account Chase NYC/CTR/
Information BNF=CIGNA Private Placements/AC=9009001802
ABA# 021000021
Accompanying OBI=[name of company; description of
Information security; interest rate, maturity date;
PPN; due date and application (as among
principal, premium and interest of the
payment being made; contact name and
phone.]
Address for Notices CIG & Co.
Related to c/o CIGNA Investments, Inc.
Payments Hartford CT 06152*
Attention: Securities Processing S-206
(*For overnight courier, use: 900 Cottage
Grove Road, Bloomfield, Connecticut 06002)
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
FAX: 212-552-3107/1005
Address for All Other CIG & Co.
Notices Hartford, Connecticut 06152*
Attention: Private Securities Division S-
307
(*For overnight courier, use: 900 Cottage
Grove Road, Bloomfield, Connecticut 06002)
FAX: 203-726-7203
- 44 -<PAGE>
SCHEDULE OF NOTEHOLDERS
Purchaser Name CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, on behalf of one or more
separate accounts
Name in Which Note is CIG & Co.
to be Registered
Principal Amount $1,400,000
Payment on Account of
Note
Federal Funds Wire Transfer
Method
Chase NYC/CTR/
Account BNF=CIGNA Private
Information Placements/AC=9009001802
ABA# 021000021
Accompanying OBI=[name of company; description of
Information security; interest rate, maturity date;
PPN; due date and application (as among
principal, premium and interest of the
payment being made; contact name and
phone.]
Address for Notices CIG & Co.
Related to c/o CIGNA Investments, Inc.
Payments Hartford CT 06152*
Attention: Securities Processing S-206
(*For overnight courier, use: 900
Cottage Grove Road, Bloomfield,
Connecticut 06002)
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
FAX: 212-552-3107/1005
Address for All Other CIG & Co.
Notices Hartford, Connecticut 06152*
Attention: Private Securities Division
(*Overnight courier: 900 Cottage Grove
Road, Bloomfield, Connecticut 06002)
FAX: 203-726-7203
- 45 -<PAGE>
SCHEDULE OF NOTEHOLDERS
Purchaser Name CIGNA PROPERTY AND CASUALTY INSURANCE
COMPANY
Name in Which Note is CIG & Co.
to be Registered
Principal Amount $2,400,000
Payment on Account of
Note
Federal Funds Wire Transfer
Method
Chase NYC/CTR/
Account BNF=CIGNA Private
Information Placements/AC=9009001802
ABA# 021000021
Accompanying OBI=[name of company; description of
Information security; interest rate, maturity date;
PPN; due date and application (as among
principal, premium and interest of the
payment being made; contact name and
phone.]
Address for Notices CIG & Co.
Related to c/o CIGNA Investments, Inc.
Payments Hartford CT 06152*
Attention: Securities Processing S-206
(*For overnight courier, use: 900
Cottage Grove Road, Bloomfield,
Connecticut 06002)
with a copy to:
Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 1508
Bowling Green Station
New York, New York 10081
Attention: CIGNA Private Placements
FAX: 212-552-3107/1005
Address for All Other CIG & Co.
Notices Hartford, Connecticut 06152*
Attention: Private Securities Division
(*Overnight courier: 900 Cottage Grove
Road, Bloomfield, Connecticut 06002)
FAX: 203-726-7203
- 46 -<PAGE>
SCHEDULE OF NOTEHOLDERS
Purchaser Name LIFE INSURANCE COMPANY OF NORTH AMERICA
Name in Which Note is ZANDE & Co.
to be Registered
Principal Amount $2,100,000
Payment on Account of
Note
Federal Funds Wire Transfer
Method
Morgan Guaranty Trust Company of New
Account York
Information ABA# 0210-0023-8
BTR/BNF=CUSTZ/AC-99999024/Z
Attn: CUST. SVC. ZANDE & Co. a/c 35001
Accompanying sufficient information to identify the
Information source of the transfer, and the amount
of interest and/or principal, including
the name of company; description of
security; interest rate, maturity date;
PPN; due date and application (as among
principal, premium and interest of the
payment being made; contact name and
phone.
Address for Notices ZANDE & Co.
Related to c/o Life Insurance Company of North
Payments America
c/o CIGNA Investments, Inc.
Hartford CT 06152*
Attention: Securities Processing S-206
(*For overnight courier, use: 900
Cottage Grove Road, Bloomfield,
Connecticut 06002)
Address for All Other ZANDE & Co.
Notices c/o Life Insurance Company of North
America
c/o CIGNA Investments, Inc.
Hartford, Connecticut 06152*
Attention: Private Securities Division
(*Overnight courier: 900 Cottage Grove
Road, Bloomfield, Connecticut 06002)
FAX: 203-726-7203
- 47 -<PAGE>
SCHEDULE OF NOTEHOLDERS
Purchaser Name INA LIFE INSURANCE COMPANY OF NEW YORK
Name in Which Note is TEGGE & Co.
to be Registered
Principal Amount $1,000,000
Payment on Account of
Note
Federal Funds Wire Transfer
Method
Morgan Guaranty Trust Company of New
Account York
Information ABA# 0210-0023-8
BTR/BNF=CUSTZ/AC-99999024/Z
Attn: CUST. SVC. ZANDE & Co. a/c 29099
Accompanying sufficient information to identify the
Information source of the transfer, and the amount
of interest and/or principal, including
the name of company; description of
security; interest rate, maturity date;
PPN; due date and application (as among
principal, premium and interest of the
payment being made; contact name and
phone.
Address for Notices TEGGE & Co.
Related to c/o INA Life Insurance Company of New
Payments York
c/o CIGNA Investments, Inc.
Hartford CT 06152*
Attention: Securities Processing S-206
(*For overnight courier, use: 900
Cottage Grove Road, Bloomfield,
Connecticut 06002)
Address for All Other TEGGE & Co.
Notices c/o INA Life Insurance Company of New
York
c/o CIGNA Investments, Inc.
Hartford, Connecticut 06152*
Attention: Private Securities Division
(*Overnight courier: 900 Cottage Grove
Road, Bloomfield, Connecticut 06002)
FAX: 203-726-7203
- 48 -<PAGE>
SCHEDULE OF NOTEHOLDERS
Purchaser Name OHIO NATIONAL LIFE INSURANCE
CORPORATION
Name in Which Note is OHIO NATIONAL LIFE INSURANCE
to be Registered CORPORATION
Principal Amount $1,200,000
Payment on Account of
Note
Federal Funds Wire Transfer
Method
Star Bank
Account ABA # 042-000013
Information Fifth & Walnut Streets
Cincinnati, OH 45202
Corporate Account # 865-215-8
Accompanying sufficient information to identify the
Information source of the transfer, and the amount
of interest and/or principal, including
the name of company; description of
security; interest rate, maturity date;
PPN; due date and application (as among
principal, premium and interest of the
payment being made; contact name and
phone.
Address for Notices Investment Department
Related to Ohio National Life Assurance
Payments Corporation
237 William Howard Taft Road
Cincinnati, OH 45219
Address for All Other Investment Department
Notices Ohio National Life Assurance
Corporation
237 William Howard Taft Road
Cincinnati, OH 45219
- 49 -<PAGE>
SCHEDULE OF NOTEHOLDERS
Purchaser Name SOUTHERN FARM BUREAU LIFE INSURANCE
COMPANY
Name in Which Note is SOUTHERN FARM BUREAU LIFE INSURANCE
to be Registered COMPANY
Principal Amount $1,200,000
Payment on Account of
Note
Federal Funds Wire Transfer
Method
Chemical Bank
Account New York, NY
Information ABA # 021000128
For the account of:
Southern Farm Bureau Life Insurance
Company
DDA Account # 325016488
Accompanying sufficient information to identify the
Information source of the transfer, and the amount
of interest and/or principal, including
the name of company; description of
security; interest rate, maturity date;
PPN; due date and application (as among
principal, premium and interest of the
payment being made; contact name and
phone.
Address for Notices Southern Farm Bureau Life Insurance
Related to Company
Payments 1401 Livingston Lane
Jackson, MS 39213
Attn: Walter J. Olson III
Investment Department
Address for All Other Southern Farm Bureau Life Insurance
Notices Company
1401 Livingston Lane
Jackson, MS 39213
Attn: Walter J. Olson III
Investment Department
- 50 -<PAGE>
SCHEDULE 5.17(a)
Owned and Leased Properties
A. Delfield
1. Security interest granted in all right and title to the
lease and certain proceeds under the lease and indenture,
granted pursuant to a Trust Indenture, dated as of August 1,
1981, between The Industrial Development Board of the Town
of Covington and First Tennessee Bank, N.A., relating to The
Industrial Development Board of the Town of Covington
Industrial Revenue Bonds (Litton Industries, Inc. Project)
Series 1981.
2. Security interest granted in all right and title to the
construction fund created pursuant to a Loan Agreement,
dated as of August 1, 1983, between Delfield and The
Economic Development Corporation of the County of Isabella,
relating to The Economic Development Corporation of the
County of Isabella Economic Development Revenue Bonds (The
Delfield Company Project).
3. With respect to the two parcels of property located in Union
Township, Isabella County, Michigan, Delfield's Title
Insurance Policy, dated May 7, 1991, does not insure against
the following:
a. 50 percent of all oil, gas and other minerals, and all
rights pertinent thereto, as to Parcel 2;
b. An additional possible outstanding mineral interest, as
evidenced of record in Liber 508, page 335, and
subsequent instruments, as to Parcel 2;
c. An encroachment on the premises by structures
purportedly belonging to owners of premises adjoining
on the east; and
d. An unrecorded oil, gas, and mineral lease -- between
Delfield and John T. Stolker, dated March 1987, as to
Parcel 1.
4. Security interest granted in all right and title to certain
equipment and proceeds under the lease and indenture,
granted pursuant to an Indenture and Security Agreement,
dated as of September 1, 1984, between The Industrial
Development Board of the Town of Covington and NCNB National
Bank of North Carolina, relating to The Industrial
Development Board of the Town of Covington Industrial
Revenue Bonds (Alco Standard Foodservice Equipment Company
Project) Series 1984.
- 51 -<PAGE>
5. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated May 2, 1990, showing Pitney Bowes Credit
Corporation as secured party and The Delfield Company as
debtor, covering certain copier equipment.
6. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated October 4, 1991, showing Machine Tool
Finance Corporation as secured party and The Delfield
Company as debtor, covering certain leased equipment.
7. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated November 13, 1991, showing GTE Leasing
Corp. as secured party and The Delfield Company as debtor,
covering certain leased telephone switch and related
equipment.
8. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated June 15, 1992, showing U.S. Leasing
International as secured party and DFC Holding Co. and The
Delfield Company as debtors, covering certain leased Digital
Computer Equipment.
9. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated August 14, 1992, showing Commercial
Equipment Co. as secured party, Old Kent Bank as assignee,
and The Delfield Company, as debtor, covering certain Lanier
copier equipment.
10. UCC-1 Financing Statement filed with the Secretary of State
of Michigan, dated May 26, 1993, showing Stiles Machinery,
Inc. as secured party and Delfield Company as debtor,
covering one Heian CNC Router.
11. UCC-1 Financing Statement filed with the Secretary of State
of Tennessee, dated July 18, 1991, showing Murata Wiedemann,
Inc. as secured party, Machine Tool Finance Corporation as
assignee, and The Delfield Company as debtor, covering
certain leased equipment.
12. UCC-1 Financing Statement filed with the Secretary of State
of Tennessee, dated January 7, 1992, showing Machine Tool
Finance Corporation as secured party and The Delfield
Company as debtor, covering certain leased equipment.
B. Whitlenge
1. Some of Whitlenge's suppliers' standard terms of supply
contain retention of title provisions.
- 52 -<PAGE>
2. Encumbrances and easements contained or referred to in the
documents of title of the real property of Whitlenge.
- 53 -<PAGE>
<TABLE>
<CAPTION>
Unit 8, Halesowen Industrial Park, Chancel Way,
Halesowen, West Midlands
Date Document Parties
<C> <C> <C>
23.6.80 Head Lease (with Memorandum endorsed William Whittingham Industrial Development
17th October 1986) (Halesowen) Limited and Heron Motor Group
Limited
10.4.85 License to Sub-let Goodwill Nominees Limited, Heron Motor Group
Limited and Wilmid Industries Limited
20.5.85 Underlease (and copy letter of Heron Motor Group Limited and Wilmid
21/12/1992) Industries Limited
Undated Copy Land Certificate Title No.
WM202843
19.9.78 Wayleave Agreement William Whittingham Industrial Development
(Halesowen) Ltd and The Midlands Electricity
Board
9.3.1988 Copy Certificate of Incorporation on Wilmid Industries Limited to Wilmid Public
change of name Limited Company
24.7.92 Coal Search
6.22.92 Local Authority Search No. 6298/92 Dudley Metropolitan Borough Council
(See Unit 9)
18.12.92 Land Charges Act Search No. V4112353
14.1.92 Land Charges Act Search No. R9011014
3.2.93 License to Assign Venaglass Limited, Brackhurst Limited, Wilmid
Public Limited Company and Whitlenge Drink
Equipment Limited
3.2.93 Assignment (and Notice of Assignment Wilmid Public Limited Company (1) Whitlenge
in duplicate) dated 17/2/93 Drink Equipment Limited
26.5.93 License for Alterations Venaglass Limited, Brackhurst Limited and
Whitlenge Drink Equipment Limited
20.12.93 Office Copies WM 194248
20.12.93 Office Copies WM 202843
Unit 9 Halesowen Industrial Park, Halesowen, West Midlands
Date Document Parties
- 54 -<PAGE>
17.7.81 Head Lease Goodwill Nominees Limited, William Whittingham
Industrial Development (Halesowen) Limited and
William Whittingham (Holdings) Limited
2.3.83 Under Lease (with Memorandum William Whittingham Industrial Development
endorsed 31.10.91) (Halesowen) Limited and Davies Brook & Co
Limited
25.l.82 Copy Land Certificate. Title No.
WM228401
22.11.83 Copy Land Certificate. Title No.
WM281715
2.11.92 Office Copies. Title No. WM281715
6.11.92 Local Authority Search No. 6298/92 Dudley Metropolitan Borough Council
(Applies to Unit 8 as well)
11.1.93 License to Assign Venaglass Limited, Industrial Development
(Halesowen) Limited, Davies Brook & Co Limited
and Whitlenge Drink Equipment Limited
11.1.93 Assignment (and Notice of Assignment Davies Brook & Co Limited (1) and Whitlenge
in duplicate dated 21.1.1993) Drink Equipment Ltd (2)
3.2.93 License for Alterations Venaglass Limited, Industrial Development
(Halesowen) Limited and Whitlenge Drink
Equipment Limited
5.2.93 Land Certificate Title No. WM281715
20.12.93 Office Copies WM 194248
20.12.93 Office Copies WM 228401
Units 10, 11 and 12 Halesowen Industrial Park, Chancel Way,
Halesowen, West Midlands
Date Document Parties
9.8.79 Lease William Whittingham Industrial Development
(Halesowen) Limited and Gardner Steel Limited
15.10.82 Local Land Charges Search No. Dudley District Council
6637/82
20.12.82 License Goodwill Nominees Limited and Gardner Steel
Limited
12.01.83 Notice of Assignment Gardner Steel Limited and Whitlenge Drink
Equipment Limited
21.03.83 Consent to Dealing Barclays Merchant Bank Limited
- 55 -<PAGE>
17.5.83 Land Certificate Title Number WM273135
18.7.84 Local Land Charges Search No. Dudley Metropolitan Borough Council
4556/84
27.11.84 License Goodwill Nominees Limited and Whitlenge Drink
Equipment Limited
22.2.85 Deed Goodwill Nominees Limited Whitlenge Drink
Equipment Limited
16.02.90 Rent Review Memorandum William Whittingham Industrial Development
(Halesowen) Limited and Gardner Steel Limited
21.11.91 License for Alterations Venaglass Limited and Whitlenge Drink
Equipment Limited
3.2.93 License for Alterations Venaglass Limited and Whitlenge Drink
Equipment Limited
20.12.93 Office Copies WM 194248
Unit 13, Halesowen Industrial Park, Chancel Way, Halesowen,
West Midlands
Date Document Parties
Oct 1978 Letting Plan No. 5630.57.A
7.12.78 Replies to Enquiries Before Contract
25.5.79 Copy of Bond William Whittingham Industrial Development
(Halesowen) Limited and Phoenix Assurance
Company Limited
25.5.79 Copy of Duplicate Agreement The Borough Council of Dudley (1) William
Whittingham Industrial Development (Halesowen)
Limited (1)
7.8.79 Local Land Charges Search No.
5034/79
10.10.79 Company Search No. S77990
30.10.79 Lease William Whittingham Industrial Development
(Halesowen) Limited and Whitlenge Drink
Equipment Limited
13.11.79 Office Copy entries to Title Number
WM172860
23.10.75 Office Copy Entry of Agreement and William Whittingham Industrial Development
Consent (Halesowen) Limited and The Midlands
Electricity Board
- 56 -<PAGE>
28.9.78 Office Copy Entry of Agreement and As above
Consent
18.6.84 Local Land Charges Search No. 455/84 Dudley Metropolitan Borough Council
Undated Site Plan No. 5630/50/A
22.11.91 License Venaglass Limited and Whitlenge Drink
Equipment Limited
Undated Insurance Policy No. 917F627238 Sun Alliance Insurance Group
18.11.93 Notice of Disrepair (together with Venaglass Limited
copy correspondence referred to in
the Notice)
20.12.93 Office Copies WM 194248
</TABLE>
3. The landlord of Unit 13, Chancel Way, Halesowen, has
received a survey report which reveals a small structural
defect which has been caused by subsidence on this part of
the Leased Real Property. If the repair costs are not
covered by the landlord's insurance policy, the landlord has
notified Whitlenge that it will wish to recover from
Whitlenge the repair costs pursuant to the terms of the
lease. Management estimates that the repairs would cost
between pounds 10,000 and pounds 15,000. This is the figure
which has been estimated by the landlord's surveyors.
4. Rental agreement dated 15th January 1993 relating to
Whitlenge N.V.'s property in the Benelux Businesscenter
Boomes Steenweg 690 2610 Antwerp (in Flemish). Whitlenge
N.V. is continuing to occupy the said property pursuant to
that agreement and the rental of 56,500 Belgian Francs per
month under that agreement has continued to be paid by
Whitlenge N.V. No other documentation is available at this
time in relation to the Antwerp property and therefore the
property is subject to all matters at the date hereof which
are subsisting and capable of taking effect on the property
howsoever created.
C. Industries
1. UCC-1 Financing Statement filed with the Secretary of State
of Illinois, dated January 28, 1991, showing Hewlett Packard
Company as secured party and Scotsman Industries, Inc. as
debtor, covering certain leased computer equipment.
- 57 -<PAGE>
2. In September, 1992, Group transferred the assets of its
Glenco-Star division to a wholly-owned subsidiary, Glenco
Star Corporation ("Glenco"), and sold the stock of Glenco to
Glenco Holdings, Inc. Glenco assumed Group's obligations
under a lease for a 275,000 square foot facility in
Philadelphia which expires August, 1996. Although Group was
not released from its obligations to the landlord under the
lease, Glenco Holdings, Inc. furnished Group with a letter
of credit in the amount of $ 1.5 million under which the
issuer of the letter of credit is obligated to reimburse
Group for the amount of any rent payments made by Group to
the landlord under the lease after August 1, 1994.
Glenco defaulted in its obligation to make its February,
March and April, 1994 rent payments to the landlord under
the lease and has filed for bankruptcy under Chapter 11 of
the federal Bankruptcy Act. Upon notice of each of the
defaults, Group made a monthly rent payment in the amount of
$ 57,298 due to the landlord under the lease. Group also
remains obligated for certain real estate tax payments and
other payments due under the lease if Glenco should fail to
comply with such payment obligations. In April, 1994, Group
paid approximately $ 68,696 in real estate taxes pursuant to
the terms of the lease after receipt of notice that Glenco
had failed to make such payments. Industries has set up a
reserve to cover the remaining monthly rent payments to be
made until August 1, 1994, when it anticipates that it will
be able to draw upon the letter of credit. See also
Schedule 5.8, item C.2. for other developments relating to
the Glenco-Star lease.
3. Industries' Form 10-K filing for the Fiscal Year ended
January 2, 1994 states that Industries has facilities
located in Fairfax, South Carolina, consisting of a 247,000
square foot plant built in 1980 and an 80,000 square foot
separate warehouse which secure Industrial Development
Revenue Bonds ("Bonds") of $ 9.25 million. In addition,
pursuant to the Reimbursement Agreement between Group and
the issuer (the "L/C Bank") of the letter of credit
supporting obligations due under the Bonds, Group has
granted a lien to the L/C Bank in certain Bonds redeemed
with proceeds from the letter of credit and all proceeds
thereof.
- 58 -<PAGE>
D. Group
1. UCC-1 Financing Statement filed with the Secretary of State
of Illinois, dated May 6, 1991, showing Hewlett Packard
Company, as secured party and Scotsman Group, Inc. as
debtor, covering certain leased computer equipment.
E. Booth
1. UCC-1 Financing Statement filed with the Secretary of State
of Texas, dated December 2, 1993, showing Foam Supplies,
Inc. as secured party and Booth - Crystal Tips Ice Systems
as debtor, covering certain solventless urethane dispensing
units.
2. Booth has entered into a lease dated April 16, 1993,
relating to certain real property located in Dallas, Texas
which includes, to secure sums due under the lease, a grant
to the lessor of a security interest in Booth's property
located at the leased premises and the proceeds and products
thereof. No UCC financing statement with respect to this
security interest has been executed by Booth and filed with
the Texas Secretary of State.
- 59 -<PAGE>
SCHEDULE 5.18
<TABLE>
<CAPTION>
Indebtedness
Outstanding as of
Obligor Indebtedness Under 4/29/94
<C> <C> <C>
A. Industries: 1. Guaranty under that certain Amended and Restated N/A
Note Purchase Agreement dated as of April 29, 1994
among Industries, Group and certain investors (the
"A&R NPA")
2. Guaranty Agreement dated July 1, 1993 made by N/A
Industries in favor of Comerica Bank-Illinois.
3. Guaranty to the State of Michigan Self-Insurance N/A
Authority, dated as of April 29, 1994, relating to
claims arising under Michigan's Workers' Disability
Act of 1989 against Delfield's Self-Insurance
Program.
4. Guarantor of Group's obligations under that certain N/A
Reimbursement Agreement dated as of March 1, 1988,
as amended, in favor of the issuer of the letter of
credit supporting payment of the Allendale County,
South Carolina Industrial Revenue Bonds.
5. Guaranty provided pursuant to the Credit Agreement N/A
with respect to the indebtedness relating thereto.
B. Group: 1. The A&R NPA. $ 20,000,000
2. Loan Agreement dated as of March 1, 1988 between $ 9,250,000
Allendale County, South Carolina and King-Seeley
Thermos Co. (Group's predecessor in interest)
regarding Industrial Revenue Refunding Bonds, Series
1988 (the "Allendale Bonds")
3. $5,000,000 Line of Credit with Comerica Bank- -0-
Illinois
4. Interest Rate Swap Transaction between Group and N/A
First National Bank of Chicago pursuant to an
Amended Confirmation, dated March 3, 1994.
5. Computer Equipment Lease $ 270,000
6. Guaranty of payment and performance, dated April 8, N/A
1993, given by Group to The Western and Southern
Life Insurance Company, with respect to the lease of
certain property to Booth.
- 60 -<PAGE>
7. Tax Sharing Indemnification Agreement, between N/A
Household International, Inc. and Group, dated April
14, 1989.
8. Guaranty provided pursuant to the Credit Agreement N/A
with respect to the indebtedness relating thereto.
C. Castel MAC 1. Castel MAC maintains various lines of credit with -0-
one or more Italian banks from time to time.
2. Guaranty provided pursuant to the Credit Agreement N/A
with respect to the indebtedness relating thereto.
D. Frimont 1. Frimont maintains various lines of credit with one $ 4 million
or more Italian banks from time to time. (approx.)
2. Capitalized leases for certain machinery and $ 38,000
equipment. (approx.)
3. Guaranty provided pursuant to the Credit Agreement N/A
with respect to the indebtedness relating thereto.
E. Booth 1. Guaranty under A&R NPA. N/A
2. Guaranty provided pursuant to the Credit Agreement N/A
with respect to the indebtedness relating thereto.
F. Delfield 1. The lease and indenture, granted pursuant to a Trust $ 3,150,000
and Indenture, dated as of August 1, 1981, between
The Industrial Development Board of the Town of
Covington and First Tennessee Bank, N.A., relating
to The Industrial Development Board of the Town of
Covington Industrial Revenue Bonds (Litton
Industries, Inc. Project) Series 1981.
2. Delfield has assumed all the liabilities and N/A
obligations of Alco Standard Corporation ("Alco")
with respect to the Guaranty, Purchase and
Indemnification Agreement, between Alco and NCNB
National Bank of North Carolina, dated November 2,
1984 (relating to the Series 1981 Industrial Revenue
Bonds).
3. Delfield has assumed all the liabilities and N/A
obligations of Alco with respect to the Guaranty,
Purchase and Indemnification Agreement, between Alco
and Litton Industries, Inc., dated November 2, 1984
(relating to the Series 1981 Industrial Revenue
Bonds).
- 61 -<PAGE>
4. Loan Agreement, dated as of August 1, 1983, between $ 600,000
Delfield and The Economic Development Corporation of
the County of Isabella, relating to The Economic
Development Corporation of the County of Isabella
Economic Development Revenue Bonds (The Delfield
Company Project) (the "Isabella Bonds").
5. Guaranty, by Alco dated as of August 1, 1983 N/A
(relating to the Isabella Bonds).
6. The lease and indenture, granted pursuant to an $ 250,000
Indenture and Security Agreement, dated as of
September 1, 1984, between The Industrial
Development Board of the Town of Covington and NCNB
National Bank of North Carolina, relating to The
Industrial Development Board of the Town of
Covington Industrial Revenue Bonds (Alco Standard
Foodservice Equipment Company Project) Series 1984
("Series 1984 Bonds").
7. Guaranty and Indemnification Agreement, between Alco N/A
and NCNB Bank of North Carolina, dated as of
September 1, 1984 (relating to the Series 1984
Bonds).
8. Guaranty under A&R NPA. N/A
9. Machine Tool Finance Corporation Capital Lease re: $ 127,027.89/yr.
Centrum 3000 Turret Punch Press
10. United States Leasing Corp. $226,618.05
Capital Lease re: DEC VAX 4000 (15 pmts at
$ 15,107.87/yr)
11. Standby Letter of Credit Application and $500,000
Reimbursement and Security Agreement dated May 18, (face amount)
1992 between Delfield and NBD Bank N.A. relating to
a Standby Letter of Credit issued in favor of the
State of Michigan Bureau of Workers' Disability
Compensation.
12. Guaranty provided pursuant to the Credit Agreement N/A
with respect to the indebtedness relating thereto.
G. DFC 1. Guaranty under A&R NPA. N/A
2. Guaranty provided pursuant to the Credit Agreement N/A
with respect to the indebtedness relating thereto.
H. Whitlenge 1. Letter Agreement dated April 7, 1992 with Bank of N/A
Scotland Treasury Services Plc re: interest rate cap
2. Guarantee for Payment of sums due to the Pounds 55,000
Commissioners of H.M. Customs and Excise Service.
- 62 -<PAGE>
3. Guaranty provided pursuant to the Credit Agreement N/A
with respect to the indebtedness relating thereto.
</TABLE>
- 63 -<PAGE>
SCHEDULE 6.15
Investments
Scotsman Group Inc.: Amount
1. Note Receivable from Howe Corporation $300,000
2. Group has a 17 percent equity interest
in Booth Limited, a private company
limited by shares registered in England.
- 64 -<PAGE>
EXHIBIT A
SCOTSMAN GROUP INC.
11.43 percent Senior Note due May 1, 1998
No. R________________ Bloomfield, Connecticut
$____________________ _________ __, 19___
Scotsman Group Inc., a Delaware corporation (the "Company"),
for value received, hereby promises to pay to ____________________, or
registered assigns, the principal amount of $__________ on May 1, 1998
with interest (computed on the basis of a 360-day year of twelve 30-
day months) on the unpaid balance of such principal amount at the rate
of 11.43 percent per annum from the date hereof, payable semiannually
on each November 1 and May 1 after the date hereof, commencing on
November 1, 1989, until such unpaid balance shall become due and
payable (whether at maturity or at a date fixed for prepayment or by
declaration or otherwise), and with interest on any overdue principal
(including any overdue prepayment of principal) and premium, if any,
and (to the extent permitted by applicable law) on any overdue
interest, at the rate of 1 percent per annum above the applicable
interest rate until paid, payable semiannually as aforesaid or, at the
option of the holder hereof, on demand. Subject to Section 16.2 of
the Note Purchase Agreements referred to below, payments of principal,
premium, if any, and interest on this Note shall be made in lawful
money of the United States of America at the principal office of
Morgan Guaranty Trust Company, in the Borough of Manhattan, the City
and State of New York, or at such other office or agency in such
Borough as the Company shall have designated by written notice to the
holder of this Note as provided in such Note Purchase Agreements.
This Note is one of the Company's 11.43 percent Senior Notes
due May 1, 1998 (the "Notes"), originally issued in the aggregate
principal amount of $20,000,000 pursuant to Note Purchase Agreements,
dated as of April 17, 1989, among the Company and certain
institutional investors as amended and restated pursuant to the
Amended and Restated Note Purchase Agreements dated as of April 29,
1994 among the Company and certain institutional investors (as amended
from time to time, the "Note Purchase Agreements"). The holder of
this Note is entitled to the benefits of such Note Purchase Agreements
and may enforce the agreements of the Company contained therein and
exercise the remedies provided for thereby or otherwise available in
respect thereof.
This Note is a Note in registered form and is transferable
only upon surrender of this Note for registration of transfer, duly
- 65 -<PAGE>
endorsed, or accompanied by a written instrument of transfer duly
executed, by the registered holder hereof or such holder's attorney
duly authorized in writing. The Company may treat the person in whose
name this Note is registered on the register kept by the Company as
provided in such Note Purchase Agreements as the owner of this Note
for the purpose of receiving payment and for all other purposes, and
the Company shall not be affected by any notice to the contrary.
The Notes are subject to required and optional prepayment,
in whole or in part, in certain cases with a premium and in other
cases without a premium, all as specified in such Note Purchase
Agreements.
In case an Event of Default, as defined in such Note
Purchase Agreements, shall occur and be continuing, the unpaid balance
of the principal of this Note may become due and payable in the manner
and with the effect provided in such Note Purchase Agreements.
This Note shall be governed by the laws of the State of
Illinois.
SCOTSMAN GROUP INC.
By:
Name:
Title:
- 66 -<PAGE>
EXHIBIT B-1
[INTENTIONALLY OMITTED]<PAGE>
EXHIBIT B-2
[INTENTIONALLY OMITTED]<PAGE>
EXHIBIT B-3
[INTENTIONALLY OMITTED]<PAGE>
EXHIBIT C
[INTENTIONALLY OMITTED]<PAGE>
EXHIBIT D
[INTENTIONALLY OMITTED]<PAGE>
EXHIBIT E
[INTENTIONALLY OMITTED]<PAGE>
EXHIBIT F
[INTENTIONALLY OMITTED]<PAGE>
EXHIBIT G
[INTENTIONALLY OMITTED]<PAGE>
EXHIBIT H
[INTENTIONALLY OMITTED]<PAGE>
EXHIBIT I
[INTENTIONALLY OMITTED]<PAGE>
EXHIBIT J
[FORM OF DOMESTIC SUBSIDIARY GUARANTY]
GUARANTY
This Guaranty is made as of the ____ day of ________, 199_ by
________________________, a ________________________ (the
"Guarantor"), in favor of each holder form time to time of the Notes
(the "Noteholders").
RECITALS:
A. Scotsman Group Inc., a Delaware corporation (the "Company"),
and Scotsman Industries, Inc., a Delaware corporation ("Industries"),
entered into separate Note Purchase Agreements, each dated as of April
17, 1989 (collectively, the "Original Note Purchase Agreements"), with
each of the purchasers listed on the Schedule of Purchasers attached
thereto, pursuant to which the Company issued and sold, and Industries
guarantied, an aggregate principal amount of Twenty Million Dollars
($20,000,000) of the Company's 11.43% Senior Notes due May 1, 1998
(collectively, as may be amended from time to time, the "Notes").
B. Pursuant to an Amendment Agreement, dated as of April 29,
1994 (as may be amended from time to time, the "Amendment Agreement"),
the Company, Industries and the holders of the Notes agreed to amend
and restate the Original Note Purchase Agreements in their entirety in
the manner provided in separate Amended and Restated Note Purchase
Agreements, each dated as of April 29, 1994 (collectively, as may be
amended from time to time, the "Amended Note Purchase Agreements"),
among the Company, Industries and each of the Noteholders listed on
Annex 1 thereto. Each term used but not otherwise defined in this
Guaranty shall have the meaning ascribed to such term by the Amended
Note Purchase Agreements.
C. The Guarantor, as a part of the consolidated business entity
of which the Company is a part, has received direct and/or indirect
benefits from the Indebtedness incurred under the Original Note
Purchase Agreements and will continue to receive such benefits under
the Amended Note Purchase Agreements.
D. [As provided in the Amendment Agreement, the execution and
delivery of this Guaranty by the Guarantor and certain other Domestic
Subsidiaries identified therein is a condition precedent to the
effectiveness of the Amended Note Purchase Agreements.]<1> The
<1> Include bracketed language only in Guaranties delivered in
connection with Amendment Agreement.
-1-<PAGE>
Guarantor is providing this Guaranty to each Noteholder pursuant to
Section 10.17 of the Amended Note Purchase Agreements.
NOW THEREFORE, in consideration of the foregoing and other good
and valuable consideration, the receipt of which is hereby
acknowledged, the Guarantor hereby agrees as follows:
1. The Guarantor hereby absolutely, irrevocably and
unconditionally guarantees the prompt, full and complete payment when
due, whether at stated maturity, upon acceleration or otherwise, and
at all times thereafter, of the principal of and interest and
Make-Whole Premium on all of the Notes at any time outstanding and the
due and punctual payment of all other amounts payable, and all other
indebtedness and obligations owing, by the Company to each Noteholder
under or in respect of the Amended Note Purchase Agreements and the
Notes, in each case when and as the same shall become due and payable,
whether at maturity, pursuant to required or optional prepayment, by
acceleration or otherwise, all in accordance with the terms and
provisions thereof (the "Guaranteed Obligations"), it being the intent
of the Guarantor that the guaranty set forth herein shall be a
guaranty of payment and not of collection. This Guaranty is a
secondary and not a primary obligation of the Guarantor in respect of
the Guaranteed Debt and shall in no event be construed as an original
undertaking by the Guarantor to incur primary liability for the
Guaranteed Debt.
2. The Guarantor waives notice of the acceptance of this
Guaranty and of the extension or incurrence of the Guaranteed Debt or
any part thereof. The Guarantor further waives all setoffs and
counterclaims and presentment, protest, notice, filing of claims with
a court in the event of receivership, bankruptcy or reorganization of
the Company, demand or action on delinquency in respect of the
Guaranteed Debt or any part thereof, including any right to require
any of the Noteholders to sue the Company, any other guarantor or any
other Person obligated with respect to the Guaranteed Debt or any part
thereof, or otherwise to enforce payment thereof against any
collateral securing the Guaranteed Debt or any part thereof.
3. The Guarantor hereby agrees that, to the fullest extent
permitted by law, its obligations hereunder shall be continuing,
absolute and unconditional under any and all circumstances and not
subject to any reduction, limitation, impairment, termination, defense
(other than indefeasible payment in full), setoff, counterclaim or
recoupment whatsoever (all of which are hereby expressly waived by it
to the fullest extent permitted by law), whether by reason of any
claim of any character whatsoever, including, without limitation, any
claim of waiver, release, surrender, alteration or compromise. The
validity and enforceability of this Guaranty shall not be impaired or
affected by any of the following: (a) any extension, modification or
renewal of, or indulgence with respect to, or substitution for, the
-2-<PAGE>
Guaranteed Debt or any part thereof or any agreement relating thereto
at any time; (b) any failure or omission to perfect or maintain any
lien on, or preserve rights to, any security or collateral or to
enforce any right, power or remedy with respect to the Guaranteed Debt
or any part thereof or any agreement relating thereto, or any
collateral securing the Guaranteed Debt or any part thereof; (c) any
waiver of any right, power or remedy or of any default with respect to
the Guaranteed Debt or any part thereof or any agreement relating
thereto or with respect to any collateral securing the Guaranteed Debt
or any part thereof; (d) any release, surrender, compromise,
settlement, waiver, subordination or modification, with or without
consideration, of any collateral securing the Guaranteed Debt or any
part thereof, any other guaranties with respect to the Guaranteed Debt
or any part thereof, or any other obligations of any Person with
respect to the Guaranteed Debt or any part thereof; (e) the
enforceability or validity of the Guaranteed Debt or any part thereof
or the genuineness, enforceability or validity of any agreement
relating thereto or with respect to any collateral securing the
Guaranteed Debt or any part thereof; (f) the application of payments
received from any source to the payment of indebtedness other than the
Guaranteed Debt, any part thereof or amounts which are not covered by
this Guaranty even though any of the Noteholders might lawfully have
elected to apply such payments to any part or all of the Guaranteed
Debt or to amounts which are not covered by this Guaranty; (g) any
change of ownership of the Company or the insolvency, bankruptcy or
any other change in the legal status of the Company; (h) any change
in, or the imposition of, any law, decree, regulation or other
governmental act which does or might impair, delay or in any way
affect the validity, enforceability or the payment when due of the
Guaranteed Debt; (i) the failure of the Company to maintain in full
force, validity or effect or to obtain or renew when required all
governmental and other approvals licenses or consents required in
connection with the Guaranteed Debt or this Guaranty, or to take any
other action required in connection with the performance of all
obligations pursuant to the Guaranteed Debt or this Guaranty; (j) the
existence of any claim, setoff or other rights which the Guarantor may
have at any time against the Company or any other guarantor in
connection herewith or with any unrelated transaction; (k) the
election of any Noteholder, in any case or proceeding instituted under
chapter 11 of the United States Bankruptcy Code, of the application of
section 1111 (b)(2) of the United States Bankruptcy Code; (I) any
borrowing, use of cash collateral, or grant of a security interest by
the Company, as debtor in possession under section 363 or 364 of the
United States Bankruptcy Code; (m) the disallowance of all or any
portion of any Noteholder's claims for repayment of the Guaranteed
Debt under section 502 or 506 of the United States Bankruptcy Code; or
(n) any other fact or circumstance which might otherwise constitute
grounds at law or equity for the discharge or release of the Guarantor
from its obligations hereunder, all whether or not the Guarantor shall
have had notice or knowledge of any act or omission referred to in the
-3-<PAGE>
foregoing clauses (a) through (n) of this paragraph. It is agreed that
the Guarantor's liability hereunder is independent of any other
guaranties or other obligations at any time in effect with respect to
the Guaranteed Debt or any part thereof and that the Guarantor's
liability hereunder may be enforced regardless of the existence,
validity, enforcement or non-enforcement of any such other guaranties
or other obligations or any provision of any applicable law or
regulation purporting to prohibit payment by the Company of the
Guaranteed Debt in the manner agreed upon among the Company and each
Noteholder. Notwithstanding the provisions of Section 3(a), (b), (c)
and (e) above, the validity and enforceability of this Guaranty shall
be subject to the express terms of any written amendment, supplement,
modification or waiver of the terms or provisions of this Guaranty
signed and delivered by Noteholders holding at least sixty-six and
two-thirds percent (66-2/3%) in principal amount of the Notes at the
time outstanding (excluding any Notes directly or indirectly owned by
Industries, Group or any of their respective Subsidiaries or
Affiliates) (the "Required Noteholders").
4. Credit may be granted or continued from time to time by each
Noteholder to the Company without notice to or authorization from the
Guarantor regardless of the Company's financial or other condition at
the time of any such grant or continuation. Each Noteholder shall not
have any obligation to disclose or discuss with the Guarantor their
assessment of the financial condition of any other guarantor or the
Company.
5. The Guarantor shall have no right of subrogation with
respect to the Guaranteed Debt and hereby waives any right to enforce
any remedy which any Noteholder now has or may hereafter have against
the Company, any endorser or any other guarantor of all or any part of
the Guaranteed Debt, and the Guarantor hereby waives any benefit of,
and any right to participate in, any security or collateral given to
any Noteholder to secure payment of the Guaranteed Debt or any part
thereof or any other liability of the Company to any Noteholder. The
Guarantor hereby releases the Company from all, and agrees not to
assert or enforce (whether by or in a legal or equitable proceeding or
otherwise) any, "claims" (as defined in section 101(4) of the United
States Bankruptcy Code, as amended), whether arising under any law,
statute, governmental rule or regulation or judicial determination or
otherwise, to which the Guarantor is or would at any time be entitled
by virtue of its obligations hereunder, any payment made pursuant
thereto or the exercise by any Noteholder of its rights with respect
to any collateral for the Guaranteed Debt, including any such claims
to which the Guarantor may be entitled as a result of any right of
subrogation, exoneration or reimbursement.
6. The Guarantor authorizes each Noteholder to take any action
or exercise any remedy with respect to any collateral from time to
time securing the Guaranteed Debt, which such Noteholder in its sole
-4-<PAGE>
discretion shall determine, without notice to the Guarantor.
Notwithstanding any reference herein to any collateral securing any of
the Guaranteed Debt, it is acknowledged that, on the date hereof,
neither the Guarantor nor any of its Subsidiaries has granted, or has
any obligation to grant, any security interest in or other lien on any
of its property as security for the Guaranteed Debt.
7. In the event any Noteholder in its sole discretion elects to
give notice of any action with respect to any collateral securing the
Guaranteed Debt or any part thereof, ten (10) days' written notice
mailed to the Guarantor by ordinary mail at the address shown hereon
shall be deemed reasonable notice of any matters contained in such
notice. The Guarantor consents and agrees that no Noteholder shall be
under any obligation to marshall any assets in favor of the Guarantor
or against or in payment of any or all of the Guaranteed Debt.
8. In the event that acceleration of the time for payment of
any of the Guaranteed Debt is stayed upon the insolvency, bankruptcy
or reorganization of the Company, or otherwise, all such amounts shall
nonetheless be payable by the Guarantor forthwith upon the demand by
any Noteholder. The Guarantor further agrees that, to the extent that
the Company makes a payment or payments to any Noteholder on the
Guaranteed Debt, or any Noteholder receives any proceeds of collateral
securing the Guaranteed Debt, which payment or receipt of proceeds or
any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be returned or
repaid to the Company, its estate, trustee, receiver, debtor in
possession or any other party, including, without limitation, the
Guarantor, under any insolvency or bankruptcy law, state or federal
law, common law or equitable cause, then to the extent of such
payment, return or repayment, the obligation or part thereof which has
been paid, reduced or satisfied by such amount shall be reinstated and
continued in full force and effect as of the date when such initial
payment. reduction or satisfaction occurred.
9. No delay on the part of any Noteholder in the exercise of
any right, power or remedy shall operate as a waiver thereof, and no
single or partial exercise by any Noteholder of any right, power or
remedy shall preclude any further exercise thereof; nor shall any
amendment, supplement, modification or waiver of any of the terms or
provisions of this Guaranty be binding upon any Noteholder, except as
expressly set forth in a writing duly signed and delivered by the
Required Noteholders. The failure by any Noteholder at any time or
times hereafter to require strict performance by the Company or the
Guarantor of any of the provisions, warranties, terms and conditions
contained in any promissory note, security agreement, agreement,
guaranty, instrument or document now or at any time or times hereafter
executed pursuant to the terms of, or in connection with, the Amended
Note Purchase Agreements by the Company or the Guarantor and delivered
to the Noteholders shall not waive, affect or diminish any right of
-5-<PAGE>
any Noteholder at any time or times hereafter to demand strict
performance thereof, and such right shall not be deemed to have been
waived by any act or knowledge of such Noteholder, its agents,
officers or employees, unless such waiver is contained in an
instrument in writing duly signed and delivered by such Noteholder. No
waiver by any Noteholder of any default shall operate as a waiver of
any other default or the same default on a future occasion, and no
action by any Noteholder permitted hereunder shall in any way affect
or impair each Noteholder's rights or powers, or the obligations of
the Guarantor under this Guaranty. Any determination by a court of
competent jurisdiction of the amount of any Guaranteed Debt owing by
the Company to any Noteholder shall be conclusive and binding on the
Guarantor irrespective of whether the Guarantor was a party to the
suit or action in which such determination was made.
10. Subject to the provisions of Section 8, this Guaranty shall
continue in effect until the Amended Note Purchase Agreements have
terminated, the Guaranteed Debt has been paid in full and the other
conditions of this Guaranty have been satisfied.
11. In addition to and without limitation of any rights, powers
or remedies of each Noteholder under applicable law, any time after
maturity of the Guaranteed Debt, whether by acceleration or otherwise,
each Noteholder may, in its discretion, with notice after the fact to
the Guarantor and regardless of the acceptance of any security or
collateral for the payment hereof, appropriate and apply toward the
payment of the Guaranteed Debt (a) any indebtedness due or to become
due from such Noteholder to the Guarantor, and (b) any moneys, credits
or other property belonging to the Guarantor (including all account
balances, whether provisional or final and whether or not collected or
available) at any time held by or coming into the possession of such
Noteholder whether for deposit or otherwise.
12. The Guarantor agrees to pay all costs, fees and expenses
(including reasonable attorneys' fees and time charges, which
attorneys may be employees of any Noteholder) incurred by each
Noteholder in collecting or enforcing the obligations of the Guarantor
under this Guaranty.
13. All of the covenants, promises and agreements contained in
this Guaranty by or on behalf of the Guarantor shall bind the
successors and assigns of the Guarantor and shall inure to the benefit
of each of the Noteholders from time to time whether so expressed or
not and whether or not an assignment of the rights hereunder shall
have been delivered in connection with any assignment or other
transfer of Notes. All references herein to the Company shall be
deemed to include its successors and assigns, including, without
limitation, a receiver, trustee or debtor in possession of or for the
Company.
-6-<PAGE>
14. THIS GUARANTY SHALL BE DEEMED TO HAVE BEEN MADE AT CHICAGO,
ILLINOIS, AND SHALL BE CONSTRUED AND THE RIGHTS AND LIABILITIES OF
EACH NOTEHOLDER AND THE GUARANTOR DETERMINED, IN ACCORDANCE WITH THE
INTERNAL LAWS, WITHOUT REGARD TO CONFLICT OF LAWS PROVISIONS, OF THE
STATE OF ILLINOIS. THE GUARANTOR CONSENTS TO THE JURISDICTION OF ANY
STATE OR FEDERAL COURT LOCATED WITHIN COOK COUNTY, ILLINOIS, WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY MESSENGER OR BY REGISTERED MAIL
DIRECTED TO THE GUARANTOR AT THE ADDRESS INDICATED BELOW, AND SERVICE
SO MADE SHALL BE DEEMED TO BE COMPLETED THREE (3) DAYS AFTER THE SAME
SHALL HAVE BEEN POSTED AS AFORESAID. THE GUARANTOR WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS AND ANY OBJECTION TO VENUE OF
ANY ACTION INSTITUTED HEREUNDER. NOTHING CONTAINED HEREIN SHALL AFFECT
THE RIGHT OF ANY NOTEHOLDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY NOTEHOLDER TO BRING ANY
ACTION OR PROCEEDING AGAINST THE GUARANTOR OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTION.
15. EACH OF THE GUARANTOR AND, BY THEIR ACCEPTANCE HEREOF, EACH
NOTEHOLDER, WAIVES TRIAL BY JURY WITH RESPECT TO DISPUTES ARISING
HEREUNDER.
16. Wherever possible, each provision of this Guaranty shall be
interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be
prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining
provisions of this Guaranty.
17. Except as otherwise expressly provided herein, any notice
required or desired to be served, given or delivered to any party
hereto under this Guaranty shall be in writing by telex, facsimile,
U.S. mail or overnight courier and addressed or delivered to such
party (a) if to a Noteholder, at its respective address set forth in
the Amended Note Purchase Agreements, or (b) if to the Guarantor, at
its address indicated on Exhibit A hereto, or to such other address as
the Guarantor or such Noteholder may designate by notice duly given to
the parties hereto in accordance with this Section 17. All notices by
United States mail shall be sent certified mail, return receipt
requested. All notices hereunder shall be effective upon delivery or
refusal of receipt; provided, that any notice transmitted by telex or
facsimile shall be deemed given when transmitted (answerback confirmed
in the case of telexes).
18. Each Noteholder shall, individually or collectively, have
the right to seek recourse against the Guarantor to the fullest extent
provided for herein for the Guarantor's obligations under this
Guaranty. No election to proceed in one form of action or proceeding,
or against any party, or on any obligation, shall constitute a waiver
-7-<PAGE>
of such Noteholder's right to proceed in any other form of action or
proceeding or against other parties unless such Noteholder has
expressly waived such right in writing. Specifically, but without
limiting the generality of the foregoing, no action or proceeding by
or on behalf of any Noteholder against the Company or any other Person
under any document or instrument evidencing obligations of the Company
or such other Person to or for the benefit of such Noteholder shall
serve to diminish the liability of the Guarantor under this Guaranty
except to the extent that such Noteholder unconditionally shall have
realized payment in full by such action or proceeding.
19. Subject to Section 21 hereof, each of the rights and
remedies granted under this Guaranty to each Noteholder in respect of
the Notes held by such Noteholder may be exercised by such Noteholder
without notice to, or the consent of or any other action by, any other
Noteholder.
20. It is understood that while the amount of the Guaranteed
Debt guaranteed hereby is not limited, if in any action or proceeding
involving any state, federal or foreign bankruptcy, insolvency or
other law affecting the rights of creditors generally, this Guaranty
would be held or determined to be void, invalid or unenforceable on
account of the amount of the aggregate liability under this Guaranty,
then, notwithstanding any other provision of this Guaranty to the
contrary, the aggregate amount of such liability shall, without any
further action of any Noteholder or any other Person, be automatically
limited and reduced to the highest amount which is valid and
enforceable as determined in such action or proceeding.
21. The terms of this Guaranty may be amended, supplemented,
modified or waived only by written instrument executed and delivered
by the Guarantor and the Required Noteholders.
[signature page to follow]
-8-<PAGE>
IN WITNESS WHEREOF, the Guarantor has entered into this Guaranty
as of the date first written above.
[NAME OF GUARANTOR]
By:_________________________
Name:
Title:
-9-<PAGE>
EXHIBIT A TO GUARANTY
[address of Guarantor]<PAGE>
EXHIBIT K
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Lenders that, both
before and after giving effect to the Closing Transactions (except,
with respect to Sections 5.8, 5.9, 5.10, 5.17, 5.18 and 5.23, only
after giving effect thereto):
5.1. Existence and Standing. Each of Industries and each
Domestic Subsidiary which is a corporation is a corporation duly
incorporated, validly existing and in good standing under the laws of
its respective jurisdiction of incorporation and is duly qualified and
in good standing as a foreign corporation and is duly authorized to
conduct its business in each jurisdiction in which its business is
conducted or proposed to be conducted and where the failure to be so
qualified or authorized could reasonably be expected to have a
Material Adverse Effect. Each Foreign Subsidiary and each Domestic
Subsidiary which is a Person other than a corporation is a Person duly
formed, validly existing and in good standing under the laws of its
jurisdiction of formation and is duly qualified and in good standing
and is duly authorized to conduct its business in each United States
jurisdiction in which its business is conducted or proposed to be
conducted and where the failure to be so qualified or authorized could
reasonably be expected to have a Material Adverse Effect.
5.2. Authorization and Validity. Industries and each Subsidiary
have all requisite power and authority (corporate and otherwise) and
legal right to execute and deliver (or file, as the case may be) each
of the Loan Documents and the other Transaction Documents to which it
is a party and to perform its obligations thereunder. The execution
and delivery (or filing, as the case may be) by Industries and each
Subsidiary of the Loan Documents and the other Transaction Documents
to which it is a party and the performance of their respective
obligations thereunder have been duly authorized by proper proceedings
(corporate and otherwise) and the Loan Documents and the other
Transaction Documents constitute legal, valid and binding obligations
of Industries or such Subsidiary, as applicable, enforceable against
Industries or such Subsidiary, as applicable, in accordance with their
terms, except as enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors'
rights generally and general principles of equity.
5.3. Compliance with Laws and Contracts. Industries and its
Subsidiaries have complied in all material respects with all
applicable statutes, rules, regulations, orders and restrictions of
-1-<PAGE>
any domestic or foreign government or any instrumentality or agency
thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective properties, except
where the failure to so comply could not reasonably be expected to
have a Material Adverse Effect. Except as disclosed on Schedule 5.3,
neither the execution and delivery by Industries and each Subsidiary
of the Loan Documents and the other Transaction Documents to which it
is a party, the application of the proceeds of the Loans, the
consummation of the Closing Transactions or any other transaction
contemplated in the Loan Documents or the other Transaction Documents,
nor compliance with the provisions of the Loan Documents or the other
Transaction Documents will, or at the relevant time did, (a) violate
any law, rule, regulation, order, writ, judgment, injunction, decree
or award binding on Industries or any Subsidiary or Industries' or any
Subsidiary's charter, articles or certificate of incorporation or by-
laws, (b) violate the provisions of or require the approval or consent
of any party to any indenture, instrument or agreement to which
Industries or any Subsidiary is a party or is subject, or by which it,
or its property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien (other
than Liens permitted by the Loan Documents) in, of or on the property
of Industries or any Subsidiary pursuant to the terms of any such
indenture, instrument or agreement, or (c) require any consent of the
stockholders of any Person, except for approvals or consents which
will be obtained on or before the initial Advance and are disclosed on
Schedule 5.3, except for any violation of, or failure to obtain an
approval or consent required under, any such indenture, instrument or
agreement that could not reasonably be expected to have a Material
Adverse Effect.
5.4. Governmental Consents. Except as disclosed on Schedule 5.4,
no order, consent, approval, qualification, license, authorization, or
validation of, or filing, recording or registration with, or exemption
by, or other action in respect of, any court, governmental or public
body or authority, or any subdivision thereof, any securities exchange
or other Person is or at the relevant time was required to authorize,
or is or at the relevant time was required in connection with the
execution, delivery, consummation or performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan
Documents or the Transaction Documents, the application of the
proceeds of the Loans or the consummation of the Acquisition, the
Merger or any other transaction contemplated in the Loan Documents or
the Transaction Documents. Neither Industries nor any Subsidiary is
in default under or in violation of any foreign, federal, state or
local law, rule, regulation, order, writ, judgment, injunction, decree
or award binding upon or applicable to Industries or such Subsidiary,
in each case the consequences of which default or violation could
reasonably be expected to have a Material Adverse Effect. The waiting
period with respect to each of the Acquisition and the Merger under
-2-<PAGE>
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
has expired.
5.5. Financial Statements. Industries has heretofore furnished
to each of the Lenders (a) the audited consolidated financial
statements of Industries and its Subsidiaries for the Fiscal Year
ended January 2, 1994 and (b) the audited consolidated financial
statements of DFC for the years ended December 31, 1993 and December
31, 1992 (collectively, the "Financial Statements"), together with the
audited consolidated financial statements of Whitlenge Acquisition for
the year ended September 30, 1993 and for the six-month period ended
September 30, 1992 (the "Whitlenge Financial Statements"). The pro
forma balance sheet and related profit and loss statement (the "Pro
Forma") of Industries and its Subsidiaries on a consolidated basis as
of January 2, 1994 is attached hereto as Schedule 5.5. As of the date
of this Agreement, the Pro Forma fairly presents Industries' and the
Subsidiaries' assets, liabilities, financial condition and results of
operations on a consolidated basis in accordance with Agreement
Accounting Principles, consistently applied, and taking into account
the Closing Transactions and the other transactions and actions
contemplated by this Agreement, the Loan Documents and the Transaction
Documents. Each of the Financial Statements was prepared in
accordance with Agreement Accounting Principles and fairly presents
the consolidated financial condition and operations of Industries and
its Subsidiaries or DFC and its Subsidiaries, as applicable, at such
dates and the consolidated results of their operations for the
respective periods then ended (except, in the case of such unaudited
statements, for normal year-end audit adjustments). Except as
disclosed in the notes thereto, the Whitlenge Financial Statements
have been prepared in accordance with the requirements of all relevant
statutes and with generally accepted accounting principles and
practices in the United Kingdom consistently applied and fairly
present the consolidated financial condition and operation of
Whitlenge Acquisition and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.
5.6. Material Adverse Change. No material adverse change in the
business, Property, condition (financial or otherwise), performance or
results of operations of Industries and its Subsidiaries, taken as a
whole, has occurred since January 2, 1994.
5.7. Taxes. Industries and its Subsidiaries have filed or caused
to be filed on a timely basis and in correct form all United States
federal and applicable foreign, state and local tax returns and all
other tax returns which are required to be filed and have paid all
taxes due pursuant to said returns or pursuant to any assessment
received by Industries or any Subsidiary, except (a) such taxes, if
any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting
Principles and as to which no Lien exists and (b) where the failure to
-3-<PAGE>
do so could not reasonably be expected to have a Material Adverse
Effect. As of the date hereof, (x) the United States income tax
returns of Industries on a consolidated basis have been audited by the
Internal Revenue Service through Fiscal Year 1985 and (y) with respect
to periods after the date on which the shares of common stock of
Industries were distributed to the holders of common stock of
Household International, Inc., there are no material pending audits or
investigations regarding Industries' or its Subsidiaries' federal,
foreign, state or local tax returns. No tax liens have been filed and
no claims are pending or, to the knowledge of Industries or any
Subsidiary, threatened, with respect to any such taxes which could
reasonably be expected to have a Material Adverse Effect. The
charges, accruals and reserves on the books of Industries and its
Subsidiaries in respect of any taxes or other governmental charges are
in accordance with Agreement Accounting Principles.
5.8. Litigation and Contingent Obligations. There is no
litigation, arbitration, proceeding, inquiry or governmental
investigation (including, without limitation, by the Federal Trade
Commission) pending or, to the knowledge of any of their officers,
threatened against or directly affecting Industries or any Subsidiary
or any of their respective properties (a) which could reasonably be
expected to have a Material Adverse Effect or to prevent, enjoin or
unduly delay the making of the Loans or Advances under this Agreement
or (b) which otherwise exists as of the date hereof and which relates
to a dollar amount in question of more than $100,000, except (i) any
such matter involving either (A) workers compensation or personal
injury matters which occur in the ordinary course of business or (B) a
product liability claim, as to which, in each such case, Industries or
the applicable Subsidiary is fully insured (except as to the payment
of any required deductible), and (ii) as set forth on Schedule 5.8.
As of the date hereof, neither Industries nor any Subsidiary has any
Contingent Obligation relating to an amount in excess of $1,000,000
except as set forth on Schedule 5.8.
5.9. Capitalization. Schedule 5.9 hereto contains (a) an
accurate description of Industries' capitalization as of a date which
is on or about March 31, 1994 and (b) an accurate list of all of the
existing Subsidiaries as of the date of this Agreement, setting forth
their respective jurisdictions of incorporation or formation and the
percentage of their capital stock owned by Industries or other
Subsidiaries. All of the issued and outstanding shares of capital
stock of Industries and of each Subsidiary have been duly authorized
and validly issued and are fully paid and non-assessable, and all such
shares of each Domestic Subsidiary are free and clear of all Liens.
As of the date hereof, neither Industries nor any Subsidiary is
subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock or any
convertible securities, rights or options, except as otherwise set
forth on Schedule 5.9.
-4-<PAGE>
5.10. ERISA. As of the date hereof, except as disclosed on
Schedule 5.10, (a) neither Industries nor any other member of the
Controlled Group maintains a Single Employer Plan, (b) no Single
Employer Plan has any Unfunded Liability, and (c) neither Industries
nor any other member of the Controlled Group maintains, or is
obligated to contribute to, any Multiemployer Plan or has incurred, or
is reasonably expected to incur, any withdrawal liability to any
Multiemployer Plan. Each Plan complies with all applicable
requirements of law and regulations, except where the failure to so
comply could not reasonably be expected to have a Material Adverse
Effect. Neither Industries nor any member of the Controlled Group
has, with respect to any Plan, failed to make any contribution or pay
any amount required under Section 412 of the IRC or Section 302 of
ERISA or the terms of such Plan. There are no pending or, to the
knowledge of Industries or any Subsidiary, threatened claims, actions,
investigations or lawsuits against any Plan, any fiduciary thereof, or
Industries or any member of the Controlled Group with respect to a
Plan, except for such which could not reasonably be expected to have a
Material Adverse Effect. As of the date hereof, neither Industries
nor any member of the Controlled Group has engaged in any prohibited
transaction (as defined in Section 4975 of the Code or Section 406 of
ERISA) in connection with any Plan which would subject any such Person
to any liability which could reasonably be expected to have a Material
Adverse Effect. As of the date hereof, except as disclosed on
Schedule 5.10, within the last five years neither Industries nor any
member of the Controlled Group has engaged in a transaction which
resulted in a Single Employer Plan with an Unfunded Liability being
transferred out of the Controlled Group. As of the date hereof, no
Termination Event has occurred or is reasonably expected to occur with
respect to any Plan which is subject to Title IV of ERISA.
5.11. Defaults. No Default or Unmatured Default has occurred and
is continuing.
5.12. Federal Reserve Regulations. Neither Industries nor any
Subsidiary is engaged, directly or indirectly, principally, or as one
of its important activities, in the business of extending, or
arranging for the extension of, credit for the purpose of purchasing
or carrying Margin Stock. No part of the proceeds of any Loan will be
used in a manner which would violate, or result in a violation of,
Regulation G, Regulation U or Regulation X. Neither the making of any
Advance hereunder, the use of the proceeds thereof, nor any other
aspect of the financing of the Acquisition and the Merger will violate
or be inconsistent with the provisions of Regulation G, Regulation U
or Regulation X. Following the application of the proceeds of the
initial Advance, less than 25 percent of the value (as determined by
any reasonable method) of the assets of Industries and its
Subsidiaries which are subject to any limitation on sale, pledge, or
other restriction hereunder taken as a whole have been, and will
continue to be, represented by Margin Stock.
-5-<PAGE>
5.13. Investment Company. Neither Industries nor any Subsidiary
is, or after giving effect to any Advance will be, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
5.14. Certain Fees. Each Borrower hereby agrees to indemnify the
Agent and the Lenders against and agrees that it will hold each of
them harmless from any claim, demand or liability for broker's or
finder's fees or commissions alleged to have been incurred by
Industries or any Subsidiary in connection with any of the
transactions (including, without limitation, the Acquisition and the
Merger) contemplated by this Agreement or the Transaction Documents
and any expenses (including, without limitation, reasonable attorneys'
fees and time charges of attorneys for the Agent or any Lender, which
attorneys may be employees of the Agent or any Lender) arising in
connection with any such claim, demand or liability.
5.15. Representations and Warranties Incorporated From Purchase
Agreement and Merger Agreement. Industries has delivered to the
Lenders complete and correct copies of the Purchase Agreement and the
Merger Agreement and each of the representations and warranties given
by Industries or any Subsidiary in the Purchase Agreement and the
Merger Agreement is true and correct in all material aspects as of the
date hereof.
5.16. Solvency. As of the date hereof, after giving effect to
the consummation of the transactions contemplated by the Loan
Documents and the Transaction Documents and the payment of all fees,
costs and expenses payable by Industries and its Subsidiaries with
respect to the transactions contemplated by the Loan Documents and the
Transaction Documents, each of Industries and each Subsidiary is
Solvent.
5.17. Ownership of Properties. As of the date hereof, except as
set forth on Schedule 5.17(a) hereto, Industries and its Subsidiaries
have a subsisting leasehold interest in, or good and marketable title,
free of all Liens, other than those permitted by Section 6.16 or by
any of the other Loan Documents, to all of the properties and assets
reflected in the Financial Statements as being owned by it, except for
assets sold, transferred or otherwise disposed of in the ordinary
course of business since the date thereof. To the knowledge of
Industries and each Subsidiary, there are no actual, threatened or
alleged defaults with respect to any leases of real property under
which Industries or any Subsidiary is lessee or lessor which could
reasonably be expected to have a Material Adverse Effect. Except as
set forth on Schedule 5.17(b), Industries and its Subsidiaries own or
possess rights to use all material licenses, patents, patent
applications, copyrights, service marks, trademarks and trade names
necessary to continue to conduct their business as heretofore
conducted, and no such license, patent or trademark, the loss of the
-6-<PAGE>
rights to or use of which could reasonably be expected to have a
Material Adverse Effect, has been declared invalid, been limited by
order of any court or by agreement or is the subject of any
infringement, interference or similar proceeding or challenge. As of
the date hereof, (a) Whitlenge Acquisition owns no material assets
other than the stock of Whitlenge and (b) Whitlenge N.V. owns no
assets other than those incidental to its conduct of a trade office in
Belgium.
5.18. Indebtedness. Attached hereto as Schedule 5.18 is a
complete and correct list of all Indebtedness of Industries and its
Subsidiaries outstanding as of the date of this Agreement (other than
Indebtedness in a principal amount not exceeding $100,000 for a single
item of Indebtedness and $500,000 in the aggregate for all such
Indebtedness listed), showing the aggregate principal amount which was
outstanding on such date after giving effect to the making of the
Loans.
5.19. Employee Controversies. There are no strikes, work
stoppages or controversies pending or, to the knowledge of Industries
or any Subsidiary, threatened between Industries or any Subsidiary and
any of its employees, other than employee grievances arising in the
ordinary course of business, which, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
5.20. Material Agreements. Neither Industries nor any Subsidiary
is a party to any agreement or instrument or subject to any charter or
other corporate restriction which could reasonably be expected to have
a Material Adverse Effect. Neither Industries nor any Subsidiary is
in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any agreement to
which it is a party, which default could reasonably be expected to
have a Material Adverse Effect.
5.21. Acquisition and Merger Documents. Industries has delivered
to each of the Lenders true, complete and correct copies of the
Acquisition Documents and the Merger Documents (including all
schedules, exhibits, annexes, amendments, supplements and
modifications thereto). The Acquisition Documents and the Merger
Documents as originally executed and delivered by the parties thereto
have not been amended, supplemented or modified without the consent of
the Required Lenders. As of the date hereof, neither Industries nor
any other party thereto is in default in the performance of or
compliance with any provisions thereof. The Acquisition is being
consummated in accordance with applicable laws and regulations
contemporaneously with the initial Advance. The Merger Documents are
in form and substance satisfactory for effecting the Merger pursuant
to such agreements under the laws of the State of Delaware, all
required Merger Documents have been filed with the Secretary of State
of the State of Delaware, and the Merger is being effected
-7-<PAGE>
contemporaneously with the initial Advance in accordance with the laws
of the State of Delaware.
5.22. Environmental Laws. Except as set forth on Schedule 5.22,
there are no claims, investigations, litigation, administrative
proceedings, notices, requests for information, pending or, to the
knowledge of Industries or any Subsidiary, threatened, or judgments or
orders asserting violations of applicable federal, state and local
environmental, health and safety statutes, regulations, ordinances,
codes, rules, orders, decrees, directives and standards
("Environmental Laws") or relating to any toxic or hazardous waste,
substance or chemical or any pollutant, contaminant, chemical or other
substance defined or regulated pursuant to any Environmental Law,
including, without limitation, asbestos, petroleum, crude oil or any
fraction thereof ("Hazardous Materials") asserted against Industries
or any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect. Neither Industries nor any Subsidiary has
caused or permitted any Hazardous Materials to be released, either on
or under real property, currently or, to the knowledge of Industries
or any Subsidiary, formerly, legally or beneficially owned or operated
by Industries or any Subsidiary or on or under real property to which
Industries or any of its Subsidiaries transported, arranged for the
transport or disposal of, or disposed of Hazardous Materials that in
any such event could reasonably be expected to have a Material Adverse
Effect. Except as disclosed on Schedule 5.22, no real property
currently or, to the knowledge of Industries or any Subsidiary,
formerly owned or operated by Industries or any Subsidiary has ever
been used as a dump or disposal site or as a treatment or storage site
for Hazardous Materials where such use could reasonably be expected to
have a Material Adverse Effect. Except as disclosed on Schedule 5.22,
Industries and each of its Subsidiaries have obtained and are in
compliance with all permits, certificates, licenses, approvals and
other authorizations ("Environmental Permits") required for the
operation of their business and have filed all required notifications
or reports relating to chemical substances, air emissions, effluent
discharges and the storage, treatment, transport and disposal of
Hazardous Materials except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect. No asbestos
containing materials, polychlorinated biphenyls or underground storage
tanks are or have been located in, on or under real property owned or
operated by Industries or any of its Subsidiaries (to the knowledge of
Industries and each Subsidiary with respect to any period prior to
such Person's ownership of such real property) except those which
could not reasonably be expected to have a Material Adverse Effect.
There are no Liens arising under any Environmental Law which have
attached to real property owned or operated by Industries or any of
its Subsidiaries and, to the knowledge of Industries and each
Subsidiary, there is no threat to so attach any such Liens thereto.
Industries and its Subsidiaries do not have liabilities in the
aggregate for all of them with respect to compliance with applicable
-8-<PAGE>
Environmental Laws and Environmental Permits or related to the
generation, treatment, storage, disposal, release, investigation or
cleanup of Hazardous Materials that could reasonably be expected to
have a Material Adverse Effect, and no facts or circumstances exist
which could give rise to such liabilities with respect to compliance
with applicable Environmental Laws and Environmental Permits and the
generation, treatment, storage, disposal, release, investigation or
cleanup of Hazardous Materials. Neither the compliance by any such
Person with applicable Environmental Laws and Environmental Permits
nor the generation, treatment, storage, disposal, release,
investigation or cleanup of Hazardous Materials will affect the
operation and production of Industries and its Subsidiaries in a
manner which could reasonably be expected to have a Material Adverse
Effect.
5.23. Insurance. As of the date hereof, Schedule 5.23 completely
and accurately summarizes the property and casualty insurance in
existence and carried by Industries and its Subsidiaries, and such
insurance is adequate to protect Industries and its Subsidiaries. The
summary on Schedule 5.23 includes the insurer's or insurers' name(s),
policy number(s), expiration date(s), amount(s) of coverage, type(s)
of coverage, exclusion(s), and deductibles. This summary also
includes similar information, and describes any reserves, relating to
any self-insurance program that is in effect.
5.24. Disclosure. None of the (a) information, exhibits or
reports furnished or to be furnished by Industries or any Subsidiary
(other than any Person which became a Subsidiary upon the consummation
of the Closing Transactions) to the Agent or to any Lender in
connection with the negotiation of the Loan Documents, or (b)
representations or warranties of Industries or any such Subsidiary
contained in this Agreement, the other Loan Documents, the Transaction
Documents or any other document, certificate or written statement
furnished to the Agent or the Lenders by or on behalf of Industries or
any such Subsidiary for use in connection with the transactions
contemplated by this Agreement or the Transaction Documents, as the
case may be, contained, contains or will contain any untrue statement
of a material fact or omitted, omits or will omit to state a material
fact necessary in order to make the statements contained herein or
therein not misleading at the time made in light of the circumstances
in which the same were made. The pro forma financial information
contained in such materials and furnished by Industries or any such
Subsidiary is based upon good faith estimates and assumptions believed
by Industries to be reasonable at the time made. There is no fact
known to Industries or any Subsidiary (except, for the purposes of
representations made as of the Closing Date, for any Person which
became a Subsidiary upon the consummation of the Closing
Transactions), other than matters of a general economic nature, that
has had or could reasonably be expected to have a Material Adverse
Effect and that has not been disclosed herein or in such other
-9-<PAGE>
documents, certificates and statements furnished to the Lenders for
use in connection with the transactions contemplated by this
Agreement.
-10-<PAGE>
<PAGE>
Exhibit 10.3
Tax I.D. No. 36-3635935
AMENDED AND RESTATED PROMISSORY NOTE
$5,000,000.00 Franklin Park, Illinois
April 29, 1994
On or before June 30, 1995, FOR VALUE RECEIVED, the undersigned,
SCOTSMAN GROUP INC., (herein called "Maker") promises to pay to the
order of COMERICA BANK-ILLINOIS (herein called "Bank") in lawful
currency of the United States of America at the main office of Bank,
FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00) or so much of said sum
as has been advanced and is then outstanding hereunder together with
interest thereon as hereinafter set forth.
This Note is a note under which advances, repayments and new advances
may be made from time to time, provided that Bank shall not be
obligated to make any advance hereunder. Advances hereunder may be
requested in Maker's discretion by telephonic notice to Bank or by
submission of a request for advance in form annexed hereto as Exhibit
"A". Any advance requested by telephonic notice (i) shall be made
only to Account No. 1076111614 with Bank in the name of Maker or to
such other account as Maker shall subsequently designate by written
notice to Bank, and (ii) shall be confirmed by maker that same day by
submission to Bank by first class mail of the written request for
advance aforementioned. Maker acknowledges that if Bank makes an
advance based on a telephonic request, it shall be for Maker's
convenience and all risks involved in the use of such procedure shall
be borne by Maker, and Maker expressly agrees to indemnify and hold
Bank harmless therefor. Bank shall have no duty to confirm the
authority of anyone requesting an advance by telephone.
Each advance outstanding under this Note from time to time shall bear
interest at a per annum rate equal to Bank's prime rate established by
Bank from time to time or such other rate accepted by Bank with
respect thereto and shall be payable upon the repayment date therefor.
The amount, rate and repayment date of each advance shall be noted on
Bank's records, which records will be prima facie evidence thereof,
absent manifest error. Failure to pay any advance on its repayment
date, without Bank's consent, shall constitute a default and such
advance shall thereafter bear interest at three percent (3%) above
said prime rate as it may vary from time to time until paid. Interest
shall be computed on a daily basis using a year of 360 days and
assessed for the actual number of days elapsed. Interest on each
advance shall be payable monthly on the last day of each month in the
case of a prime based advance, and in all other cases on the
respective repayment date therefore which date shall not be later than
the maturity date of this Note.<PAGE>
This Note amends and restates that certain Promissory Note dated June
17, 1993 in the principal amount of $5,000,000.00 made by Maker in
favor of Bank (the "original note"; the original note was a renewal of
a certain Promissory Note dated November 20, 1992, which note replaced
the Promissory Note dated April 27, 1992, by Maker payable to Bank).
Whenever Bank deems itself insecure, or on default in payment of any
liability hereunder, or upon the occurrence of any Default as defined
under that Scotsman Group Inc. $90,000,000 Credit Agreement dated as
of April 29, 1994, among Maker, The First National Bank of Chicago, as
Agent, Bank as lender, and the various banks and other parties listed
on the signature pages thereof, the representations, warranties,
covenants and default provisions of which are hereby incorporated by
reference into this Note, notwithstanding the earlier termination and
expiration of said Credit Agreement, as said representations,
warranties, covenants and default provisions may be amended from time
to time in writing by and between the parties thereto, or upon any
default in payment of any other liability of Maker to Bank and
continuance thereof beyond any period of grace, if any, provided with
respect thereto, the Bank may declare this Note due forthwith.
Nothing herein shall limit any right granted Bank by other instrument
or by law.
SCOTSMAN GROUP INC.
/s/Donald D. Holmes
-----------------------------
By: Donald D. Holmes
Its: Vice President-Finance<PAGE>
REQUEST FOR ADVANCE
TO: COMERICA BANK-ILLINOIS (the "Bank")
The undersigned hereby requests an advance, or confirms such a
request made by telephone, under the Five Million Dollar
($5,000,000.00) Promissory Note dated ________, 1993, made by the
undersigned to the Bank, pursuant to the following terms:
Advance Amount: $____________
Interest Rate: ____________ % per annum
Advance Date: _______________, 19__
Repayment Date: ________________, 19__.
The proceeds of this advance shall be or have been deposited to
the Account No. _______ of the undersigned with the Bank or as
follows: ________________________.
Undersigned warrant(s) that no condition exists or event has
occurred which constitutes or, with the giving of notice or the
running of time, or both, would constitute a default under said
Promissory Note or any related agreement with the Bank, and the
undersigned further warrants that no condition exists or event has
occurred which constitutes or, with the giving of notice or the
passage of time would constitute a "Default" under that certain
Scotsman Group Inc., Credit Agreement dated as of April 29, 1994,
among the undersigned, The First National Bank of Chicago, as Agent,
and the banks and other parties listed on the signature pages thereof
(as amended from time to time in writing by and between the parties
thereto) notwithstanding the earlier termination and expiration of
said Credit Agreement.
Dated this ________ day of ________________, 19____.
SCOTSMAN GROUP INC.
By:
Its: ______________________________<PAGE>
<PAGE>
EXHIBIT 10.4
AMENDMENT NO. 6 TO
REIMBURSEMENT AGREEMENT
-----------------------
This Amendment No. 6 to Reimbursement Agreement (this
"Amendment") is made effective as of April 29, 1994 and is by and
among Scotsman Group Inc., a Delaware corporation ("Scotsman Group"),
Scotsman Industries, Inc. , a Delaware corporation and the parent of
Scotsman Group ("Scotsman Industries"), and The Bank of Nova Scotia
(the "Bank").
WITNESSETH:
----------
WHEREAS, Scotsman Group, Scotsman Industries and PNC Bank,
National Association ("PNC"), are parties to a Reimbursement Agreement
dated as of March 1, 1988, as amended (the "Reimbursement Agreement"),
pursuant to which Scotsman Group has agreed to reimburse PNC for
certain payments made by PNC in connection with an irrevocable letter
of credit issued by PNC to provide funds for the payment when due of
all principal of, and premium and interest on (or, in certain
circumstances, the purchase price of) $9,250,000 aggregate principal
amount of Industrial Revenue Refunding Bonds Series 1988 (King-Seeley
Thermos Co. Project) (the "Bonds") issued by Allendale County, South
Carolina (the "Issuer"); and
WHEREAS, the Bank will issue a Substitute Letter of Credit
under the Indenture of Trust dated as of March 1, 1988, between the
Issuer and Shawmut Bank Connecticut, National Association, as trustee;
and
WHEREAS, Scotsman Group agrees to reimburse the Bank for
payments made under such Substitute Letter of Credit in accordance
with the terms of the Reimbursement Agreement, as amended by this
Amendment; and
WHEREAS, Scotsman Group, Scotsman Industries and the Bank
desire to amend the Reimbursement Agreement as hereinafter set forth;
NOW THEREFORE, the parties agree as follows:
Section 1. AMENDMENT TO REIMBURSEMENT AGREEMENT. The
Reimbursement Agreement is, as of the effective date of this
Amendment, amended as follows:
(i) (a) The definition of "Bank" is deleted from ARTICLE I of
the Reimbursement Agreement in its entirety and replaced with the
following:
"Bank" means The Bank of Nova Scotia.<PAGE>
(b) The following definition is added to ARTICLE I of the
Reimbursement Agreement:
"Credit Agreement" means that certain Credit Agreement dated
as of April 29, 1994 among Scotsman Group Inc. and certain
affiliates thereof, the financial institutions named
therein, and The First National Bank of Chicago, as Agent,
as amended, supplemented or modified from time to time.
(ii) SECTION 1.2 of the Reimbursement Agreement is deleted in its
entirety.
(iii) Paragraph c of SECTION 2.1 of the Reimbursement Agreement is
deleted in its entirety and there is inserted in its place the
following:
c. EXTENSIONS OF LETTER OF CREDIT. At any time prior
to February 1 of each year, the Borrower may request that
the Bank extend the Stated Expiration Date for an additional
one-year period from the then Stated Expiration Date. If
the Bank, in its sole discretion exercisable no later than
sixty (60) days after receiving such request, agrees to
extend the Stated Expiration Date as requested by the
Borrower, the Bank shall do so by delivering the notice of
extension attached to the letter of Credit to the Borrower
and the Trustee. Upon delivery of the aforesaid notice of
extension, the Stated Expiration Date shall be deemed to
have been automatically extended for a one-year period from
the then Stated Expiration Date. Each such extension shall,
except as otherwise expressly provided in an amendment to
this Agreement, be on the same terms and conditions as those
set forth in this Agreement.
(iv) SECTION 2.2(iii) of the Reimbursement Agreement is deleted
in its entirety and there is inserted in its place the following:
(iii) on the date any payment is made by the Bank under the
Letter of Credit honoring any demand for payment made by the
Trustee thereunder to provide funds for the payment of the
purchase price of Bonds tendered for purchase upon seven
days' prior written notice by the registered owners thereof
pursuant to Section 3.7 of the Indenture, in an amount equal
to such payment, and
(v) SECTION 2.3 of the Reimbursement Agreement is deleted in its
entirety and there is inserted in its place the following:
-2-<PAGE>
Section 2.3 LETTER OF CREDIT FEES. The Borrower agrees to
pay to the Bank:
a. ANNUAL FEE. An annual fee with respect to the Letter of
Credit in an amount equal to .15 percent (.15%) of the
Stated Amount in effect on the first day of each such annual
period, which annual fee shall be payable upon the issuance
and each renewal of the Letter of Credit. Each such annual
fee shall be calculated on the basis of a 360-day year.
b. DRAWING FEE. Drawing fees for each drawing made by the
Trustee on the Letter of Credit in the amount of (i) $50 for
payment of principal of the Bonds or the purchase price of
the Bonds tendered for purchase by the registered owners
thereof pursuant to Section 3.7 of the Indenture and (ii)
$50 for payment of interest on the Bonds, which drawing fees
shall be paid on the date each such drawing is honored by
the Bank.
(vi) SECTION 2.4 of the Reimbursement Agreement is deleted in its
entirety and there is inserted in its place the following:
Section 2.4 INCREASED COSTS. The Borrower, the
Guarantor and the Bank hereby agree that Sections 3.1, 3.2
and 3.3 of the Credit Agreement shall apply to the
obligations under the Agreement, which sections, together
with all related definitions, are incorporated herein by
reference.
(vii) SECTION 2.6 of the Reimbursement Agreement is deleted in its
entirety and there is inserted in its place the following:
Section 2.6 INTEREST ON OVERDUE AMOUNTS. The Borrower
agrees to pay, on demand, interest on any Obligation
(including, without limitation, any reimbursement obligation
set forth in SECTION 2.2, any Letter of Credit fee payment
obligation set forth in SECTION 2.3, any payment obligation
under the circumstances described in SECTION 2.4 or any
indemnification payment obligation under SECTION 8.4 or
otherwise) which is not paid when due, for the period from
and including the date on which payment is due to but not
including the date on which payment is made, at a rate per
annum equal to the rate of interest that is two percent
(2.0%) higher than the Floating Rate (as defined in the
Credit Agreement).
(viii) SECTIONS 4.1 through 4.15 of the Reimbursement Agreement
are deleted in their entirety and there is inserted in their place the
following:
-3-<PAGE>
each of the representations set forth in Article V of the
Credit Agreement (which Article V, together with all related
definitions, is hereby incorporated by reference and made a
part hereof) are true and correct on and as of the date
hereof.
(ix) SECTIONS 5.2, 5.5, 5.7, 5.8, 5.9, 5.10, 5.11, 5.12, 5.14
and 5.15 of the Reimbursement Agreement are deleted in their entirety
and Section 5.17 is inserted as follows:
5.17 CREDIT AGREEMENT COVENANTS. Comply and cause each
Subsidiary thereof to comply with each of the covenants set
forth in Article VI of the Credit Agreement, which Article
VI (together with all related definitions) is hereby
incorporated by reference and made a part hereof; PROVIDED,
that any waiver of compliance granted pursuant to the Credit
Agreement shall likewise constitute a waiver of compliance
hereunder with such covenants.
(x) Paragraphs (c), (d), (f), (g) and (h) of Section 7.1 of
the Reimbursement Agreement are deleted in their entirety and
paragraph (k) is inserted as follows:
(k) CREDIT AGREEMENT. The occurrence of a Default
under the Credit Agreement.
(xi) Exhibit I to the Reimbursement Agreement is deleted in its
entirety and there is inserted in its place the Form of Letter of
Credit of the Bank attached to this Amendment as Exhibit A.
Section 2. REPRESENTATIONS AND WARRANTIES OF SCOTSMAN GROUP
AND SCOTSMAN INDUSTRIES. Scotsman Group and Scotsman Industries
represent and warrant that the execution, delivery and performance by
Scotsman Group and Scotsman Industries, respectively, of this
Amendment have been duly authorized by all corporate action and that
this Amendment is a legal, valid and binding obligation of Scotsman
Group and Scotsman Industries, respectively, enforceable against them
in accordance with its terms, except as enforcement may be subject to
(i) the effect of any applicable bankruptcy, insolvency,
reorganization, moratorium or similar law affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether
such enforcement is sought in a proceeding in equity or at law).
Section 3. ADDITIONAL INDEMNIFICATION. In addition to any
payments which may be due from time to time pursuant to Section 8.4 of
the Reimbursement Agreement, each of Scotsman Group and Scotsman
Industries agrees to pay any amounts which may be payable to the Bank
in connection with the transactions contemplated by the Reimbursement
Agreement, as amended hereby, pursuant to Section 9.6 of the Credit
-4-<PAGE>
Agreement, which Section 9.6 (together with all related definitions),
is incorporated by reference herein and made a part hereof.
Section 4. REFERENCE TO AND EFFECT ON THE REIMBURSEMENT
AGREEMENT.
(a) Upon the effectiveness of this Agreement, on and after
the date hereof each reference in the Reimbursement Agreement to "this
Agreement," "hereunder," "hereof," "herein" or words of like import
shall mean and be a reference to the Reimbursement Agreement as
amended.
(b) Except as specifically amended, the Reimbursement
Agreement shall remain in full force and effect.
Section 5. GOVERNING LAW. This Amendment shall be governed
by and construed in accordance with the internal laws of the State of
Illinois (without regard to conflicts of laws provisions thereof).
Section 6. HEADINGS. Section headings in this Amendment
are included for convenience of reference only and shall not
constitute a part of this Amendment for any other purposes.
[signature page to follow]
-5-<PAGE>
IN WITNESS WHEREOF, the parties to this Amendment have
caused it to be executed by their duly authorized representative
officers as of the date first above written.
SCOTSMAN INDUSTRIES, INC. SCOTSMAN GROUP INC.
By /s/ D.D. Holmes By: /s/ D.D. Holmes
---------------- ------------------------
Title Vice President-Finance Title Vice President-Finance
------------------------ ------------------------
THE BANK OF NOVA SCOTIA
By /s/ F.C.H. Ashby
------------------------
Title Senior Manager Loan Operations
--------------------------------
-6-<PAGE>
EXHIBIT A
IRREVOCABLE LETTER OF CREDIT
April 29, 1994
Irrevocable Letter of Credit No. [________]
Shawmut Bank Connecticut, National Association,
as Trustee
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
Re: $9,250,000 Allendale County, South Carolina,
Industrial Revenue Refunding Bonds, Series 1988
(King-Seeley Thermos Co. Project)
Ladies and Gentlemen:
1. At the request and for the account of Scotsman Group Inc., a
Delaware corporation (herein, the "Borrower"), The Bank of Nova
Scotia, Atlanta Agency (the "Bank") hereby establishes in favor of
Shawmut Bank Connecticut, National Association, as Trustee (the
"Trustee") under the Indenture of Trust dated as of March 1, 1988 (the
"Indenture") between Allendale County, South Carolina (the "Issuer")
and the Trustee, pursuant to which $9,250,000 aggregate principal
amount of the Issuer's Industrial Revenue Refunding Bonds, Series 1988
(King-Seeley Thermos Co. Project) (the "Bonds") have been issued by
the Issuer, Irrevocable Letter of Credit No. [ ] ("this Letter of
Credit") in the amount of $9,597,645.82 (the "Stated Amount"), of
which, (a) an aggregate amount not exceeding $9,250,000.00 may be
demanded to pay the principal amount of the Bonds (the "Principal
Portion") (i) when due at maturity, upon redemption or acceleration,
and (ii) representing the principal portion of the purchase price of
Bonds delivered pursuant to Section 3.7 of the Indenture and not
remarketed, and (b) an aggregate amount not exceeding $347,645.82 (the
"Interest Portion") may be demanded to pay up to 123 days' interest
(at the rate of 11% per annum and assuming a year of 360 days) accrued
on Bonds. The Stated Amount and the Principal Portion and the Interest
Portion shall from time to time be reduced or reinstated as provided
in paragraphs 5 and 6 hereof.
2. Funds under this Letter of Credit are available to the
Trustee against a certificate, signed by a person who certifies that
he is a duly authorized officer of the Trustee, in the form,
appropriately completed, designated below:
(a) The form of Exhibit A hereto, if the demand for payment
of such funds is made with respect to a payment of interest on
Bonds;<PAGE>
(b) The form of Exhibit B hereto, if the demand for payment
of such funds is made with respect to a payment of the principal
amount of Bonds at maturity, upon redemption or acceleration.
(c) The form of Exhibit C hereto, if the demand for payment
of such funds is made with respect to the purchase price,
including accrued interest to the purchase date (the "Purchase
Price"), of Bonds tendered for purchase by the registered owners
thereof pursuant to Section 3.7 of the Indenture and not
remarketed; and
(d) The form of Exhibit D hereto, if the demand for payment
of such funds is made with respect to the Purchase Price of Bonds
tendered for purchase either upon substitution of a Substitute
Letter of Credit (as defined in the Indenture) or upon conversion
of the interest rate on the Bonds to the Fixed Interest Rate (as
defined in the Indenture), in either case, pursuant to Section
3.7 of the Indenture and not remarketed.
3. The Bank hereby agrees that demands for payment made under
and in compliance with the terms of this Letter of Credit will be duly
honored by the Bank (from the Bank's own funds, and not directly or
indirectly from funds or other assets of the Borrower or any affiliate
of the Borrower) upon presentation of the certificate(s) specified in
paragraph 2 hereof, at the office of the Bank referred to in paragraph
10 hereof, on or before the expiration or termination hereof. If a
demand for payment is made by the Trustee hereunder at or prior to
4:00 p.m., Atlanta time, on a Business Day (as hereinafter defined),
and if such demand for payment conforms to the terms and conditions
hereof, payment shall be made of the amount specified, in immediately
available funds, by 3:00 p.m., Atlanta time, on the next succeeding
Business Day. If a demand for payment is made by the Trustee hereunder
after 4:00 p.m., Atlanta time, on a Business Day, and if such demand
for payment conforms to the terms and Conditions hereof, payment shall
be made of the amount specified, in immediately available funds, on
the second next succeeding Business Day. Payment under this Letter of
Credit to the Trustee shall be made to the account specified in the
certificate(s) delivered pursuant to paragraph 2 hereof. As used in
this Letter of Credit, "Business Day" shall mean a day on which banks
located in Atlanta, Georgia are not required or authorized to remain
closed.
4. Multiple demands for payment, accompanied by completed
certificates in the form of Exhibits A, B, C, and D hereto, may be
made hereunder.
5. The Stated Amount shall be automatically reduced from time
to time as follows:
-2-<PAGE>
(a) Upon a demand for payment under this Letter of Credit,
the Stated Amount shall be reduced by an amount equal to the
amount of such demand; and
(b) Upon receipt by the Bank of the certification in the
form of Exhibit E hereto, the Stated Amount shall be reduced by
an amount equal to the amount specified in such certificate;
provided, however, that no reduction under this subparagraph (b)
shall duplicate any reduction under subparagraph (a) of this
paragraph.
Upon a reduction of the Stated Amount resulting from any demand for
payment other than a demand for payment to pay interest on the Bonds
on scheduled interest payment dates (except for interest on principal
of a Bond being paid and cancelled), the Bank may require the Trustee
to surrender this Letter of Credit and to accept, simultaneously in
substitution hereof, a substitute Letter of Credit for a Stated Amount
reflecting such automatic reductions, but otherwise identical in form
and terms to this Letter of Credit.
6. The Stated Amount of this Letter of Credit shall be
automatically reinstated under the following conditions:
(a) reductions under subparagraph (a) of paragraph 5 hereof
with respect to any demand for payment to pay interest on the
Bonds on scheduled interest payment dates (except interest on
principal of a Bond being paid and cancelled) unless the Trustee
receives notice in writing from the Bank (which may include
delivery by prepaid telecopier, telex, TWX or telegram), on or
before the fifteenth calendar day after such demand for payment
was paid by the Bank, that an Event of Default (as defined in
that certain Reimbursement Agreement dated as of March 1, 1988
and amended as of April 14, 1989 and April 29, 1994 between the
Bank and the Borrower (the "Reimbursement Agreement")) shall have
occurred and then be continuing and that the Trustee is directed
to declare an acceleration of the maturity of the Bonds, in which
event the amount of such demand for payment shall not be
reinstated; and
(b) reductions under subparagraph (a) of paragraph 5 hereof
with respect to any demand for payment to purchase Bonds
accompanied by a certificate in the form of Exhibit C hereto
shall be automatically reinstated by the amount set forth in such
Exhibit C unless the Trustee receives notice in writing from the
Bank (which may include delivery by prepaid telecopier, telex,
TWX or telegram), on or before the fifteenth day after such
demand for payment was paid by the Bank, that an Event of Default
(as defined in the Reimbursement Agreement) shall have occurred
and then be continuing and that the amount of such demand for
payment shall not be reinstated.
-3-<PAGE>
7. Only the Trustee may make demands for payment under this
Letter of Credit. Upon payment as provided in paragraph 3 hereof of
the amount specified in a demand for payment made hereunder, the Bank
shall be fully discharged of its obligation under this Letter of
Credit with respect to such demand for payment and the Bank shall not
thereafter be obligated to make any further payments under this Letter
of Credit in respect of such demand for payment.
8. Demands for payment may not be made under this Letter of
Credit to pay principal of or interest on Bonds held of record by or
for the account of the Borrower.
9. This Letter of Credit shall automatically terminate upon the
earliest of (a) April 29, 1995 (such date, as extended from year to
year as provided in the next sentence, being called the "Stated
Expiration Date"), (b) on the date that (i) the Borrower has obtained
a Substitute Letter of Credit (as defined in the Indenture) or (ii)
the Bank has paid a demand for payment accompanied by a certificate in
the form of Exhibit B where there will be no outstanding Bonds after
such payment or (c) the fifteenth calendar day after the Bank has
given the Trustee written notice of an Event of Default (as defined in
the Reimbursement Agreement). If the Bank delivers the notice of
extension, in the form of Exhibit F hereto, to the Borrower and the
Trustee prior to September 1 of any year, then the Stated Expiration
Date shall be deemed to have been automatically extended for a
one-year period.
10. All documents presented to the Bank in connection with any
demand for payment under this Letter of Credit, as well as all notices
and other communications to the Bank in respect hereof, shall be in
writing, shall make specific reference to this Letter of Credit by
number and shall be personally delivered to the Bank at its office
located at 600 Peachtree Street, N.E., Suite 2700, Atlanta, Georgia
30308, Attention: Claude Ashby, or at any other office as may be
designated by the Bank by written notice delivered to the Trustee, or
be sent to the Bank by telecopier to the following number(s) (or at
any number(s) designated by the Bank by written notice delivered to
the Trustee), as applicable:
Telecopier No.: (404) 888-8998
11. This Letter of Credit is subject to the Uniform Customs and
Practice for Documentary Credits (1983 Revision), International
Chamber of Commerce, Publication No. 400 (the Uniform Customs"). This
Letter of Credit shall be deemed to be a contract made under the laws
of the State of Georgia, including, without limitation, Article 5 of
the Uniform Commercial Code as in effect in the State of Georgia, and
shall, as to matters not governed by the Uniform Customs, be governed
by and construed in accordance with the laws of said State, without
regard to principles of conflicts of law.
-4-<PAGE>
12. The Trustee may transfer its rights under this Letter of
Credit in their entirety (but not in part) to any transferee who, in
accordance with the provisions of the Indenture, has succeeded to the
Trustee as trustee under the Indenture (and any such transferee shall,
upon the effectiveness of such transfer, be deemed to be the Trustee
for purposes of this Letter of Credit) and such transferred rights may
be successively transferred. Transfer of the available demands for
payment under this Letter of Credit to any such transferee shall be
effected upon the presentation to the Bank of this Letter of Credit
for endorsement hereon of such transfer accompanied by a transfer
letter, in the form of Exhibit G hereto, executed by the Trustee and
such transferee.
13. Demand for payment under this Letter of Credit shall be
presented directly to the Bank and shall not be negotiated.
14. By paying the Trustee an amount demanded in accordance with
this Letter of Credit, the Bank makes no representation as to the
correctness of the amount demanded or of the calculations and
representations of the Trustee required by this Letter of Credit.
-5-<PAGE>
15. This Letter of Credit sets forth in full the
undertaking of the Bank, and such undertaking shall not be deemed in
any way to be modified, amended, amplified or otherwise affected by
any document, instrument or agreement referred to herein (including,
without limitation, the Bonds), except only the Uniform Customs and
the certificate(s) provided for herein.
Very truly yours,
THE BANK OF NOVA SCOTIA
By:____________________________________
Title:______________________________
-6-<PAGE>
Exhibit A
CERTIFICATE FOR AN INTEREST PAYMENT DEMAND
------------------------------------------
The undersigned hereby certifies to The Bank of Nova Scotia (the
"Bank"), with reference to Irrevocable Letter of Credit No. [ ]
(the "Letter of Credit") issued by the Bank in favor of Shawmut Bank
Connecticut, National Association, as Trustee (the "Trustee"), that he
is a duly authorized officer of the Trustee, that any capitalized term
used but not defined herein shall have its respective meaning set
forth in the Letter of Credit and that:
(1) The Trustee is the Trustee under the Indenture.
(2) The Trustee hereby makes a demand for payment under the
Letter of Credit in the amount of $____________. Such demand for
payment is made with respect to a payment of interest on the
Bonds.
(3) The amount hereby demanded is equal to the interest on
the Bonds that is due and payable on __________, 19___.
(4) The amount hereby demanded does not exceed the Interest
Portion available on the date hereof to be demanded under the
Letter of Credit.
(5) The amount hereby demanded was computed in accordance
with the terms and conditions of the Bonds and the Indenture.
(6) The amount hereby demanded is not, in whole or in part,
with respect to Bonds held of record by the Borrower or for the
account of the Borrower.
(7) The Trustee hereby directs you to make payment of
the amount demanded hereby [by deposit] [by wire transfer] to account
no. ____________ at ____________.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of ___________, 19___.
SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION
as Trustee
By:______________________________
Title:________________________<PAGE>
Exhibit B
CERTIFICATE FOR A PRINCIPAL PAYMENT DEMAND
------------------------------------------
The undersigned hereby certifies to The Bank of Nova Scotia (the
"Bank"), with reference to Irrevocable Letter of Credit No. [ ]
(the "Letter of Credit") issued by the Bank in favor of Shawmut Bank
Connecticut, National Association, as Trustee (the "Trustee"), that he
is a duly authorized officer of the Trustee, at any capitalized term
used but not defined herein shall have irrespective meaning set forth
in the Letter of Credit and at:
(1) The Trustee is the Trustee under the Indenture.
(2) The Trustee hereby makes a demand for payment under the
Letter of Credit in the amount of $____________. Such demand for
payment is made with respect to a payment of principal on the
Bonds. [This demand for payment is made with respect to a partial
payment of the principal amount of Bonds, after which payment the
aggregate principal amount of Bonds outstanding shall be
$_____________ .] [This demand for payment is made with respect
to the payment of the entire outstanding principal amount of the
Bonds.]
(3) The amount hereby demanded is equal to the principal of
the Bonds that is due and payable on ___________________, 19 ___.
(4) The amount hereby demanded does not exceed the
Principal Portion available on the date hereof to be demanded
under the Letter of Credit.
(5) The amount hereby demanded was computed in accordance
with the terms and conditions of the Bonds and the Indenture.
(6) The amount hereby demanded is not, in whole or in part,
with respect to Bonds held of record by the Borrower or for the
account of the Borrower.
(7) The Trustee hereby directs you to make payment of the
amount demanded hereby [by deposit] [by wire transfer] to account
no. _________________ at _________________.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the ____ day of _______________ 19___.
SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION
as Trustee<PAGE>
By:_______________________________
Title:_________________________<PAGE>
Exhibit C
CERTIFICATE FOR A PURCHASE PRICE PAYMENT DEMAND
-----------------------------------------------
The undersigned hereby certifies to The Bank of Nova Scotia (the
"Bank"), with reference to Irrevocable Letter of Credit No. [ ]
(the "Letter of Credit") issued by the Bank in favor of Shawmut Bank
Connecticut, National Association (the "Trustee"), that he is a duly
authorized officer of the Trustee, that any capitalized term used but
not defined herein shall have its respective meaning set forth in the
Letter of Credit, and that:
(1) The Trustee is the Trustee under the Indenture.
(2) The Trustee hereby makes a demand for payment under the
Letter of Credit in the amount of $ __________. Such demand for
payment is made with respect to the payment of the Purchase Price
of Bonds tendered for purchase on ____________, 19___ upon demand
of the registered owners thereof, pursuant to Section 3.7 of the
Indenture, and not remarketed.
(3) (a) The portion of the Purchase Price corresponding to
the interest accrued on such Bonds equals $___________.
(b) The portion of the Purchase Price corresponding to
principal of such Bonds equals to $______________.
(c) The Purchase Price of such Bonds equals
______________, the sum of (a) hereof plus (b) hereof.
(d) (i) The total Purchase Price of all Bonds tendered
for purchase on the aforesaid date (whether remarketed or not) is
$_____________ and (ii) the amount of remarketing proceeds that
are to be applied pursuant to Section 3.7 of the Indenture to the
payment of the Purchase Price prior to funds derived from a
demand for payment under the Letter of Credit is $____________.
(4) The demand for payment made hereby under the Letter of
Credit does not exceed (i) the amount of Paragraph 3(d)(i) hereof
less the amount in Paragraph 3(d)(ii) hereof; (ii) in the case of
the portion of the drawing corresponding to the interest on such
Bonds, the Interest Portion available to be drawn under the
Letter of Credit; and (iii) in the case of the portion of the
drawing corresponding to the principal of such Bonds, the
Principal Portion available to be drawn under the Letter of
Credit.
(5) The Trustee has not received any notice from any party
of an event of default under the Reimbursement Agreement or the
Indenture or any agreement or instrument related thereto which<PAGE>
has not been rescinded by the party giving such notice or waived
in writing by the Bank.
(6) The amount hereby demanded was computed in accordance
with the terms and conditions of the Bonds and the Indenture.
(7) The amount hereby demanded is not, in whole or in
part, with respect to Bonds held of record by the Borrower or
for the account of the Borrower.
(8) The Trustee hereby directs you to make payments of the
amount demanded hereby [by deposit] [by wire transfer] to account
no. ____________ at _________________.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of this ____ day of ____________, 19 ___.
SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION
as Trustee
By:______________________________
Title:________________________
C-2<PAGE>
Exhibit D
CERTIFICATE FOR A SUBSTITUTE LETTER OF
CREDIT OR FIXED INTEREST RATE
CONVERSION PURCHASE PRICE PAYMENT DEMAND
----------------------------------------
The undersigned hereby certifies to The Bank of Nova Scotia (the
"Bank"), with reference to Irrevocable Letter of Credit No. [ ]
(the "Letter of Credit") issued by the Bank in favor of Shawmut Bank
Connecticut, National Association (the "Trustee"), that he is a duly
authorized officer of the Trustee, that any capitalized term used but
not defined herein shall have its respective meaning set forth in the
Letter of Credit, and that:
(1) The Trustee is the Trustee under the Indenture.
[(2) The Trustee hereby makes a demand for payment under the
Letter of Credit in the amount of $ ________. Such demand for
payment is made with respect to the payment of the Purchase Price
of Bonds tendered for purchase on ___________, 19___ upon
substitution of a Substitute Letter of Credit, pursuant to
Section 3.7 of the Indenture, and not remarketed.]<f*/>
[(2) The Trustee hereby makes a demand for payment under the
Letter of Credit in the amount of $ __________. Such demand for
payment is made with respect to the payment of the Purchase Price
of Bonds tendered for purchase on ___________, 19___ upon
conversion of the interest rate on the Bonds to the Fixed
Interest Rate, pursuant to Section 3.7 of the Indenture, and not
remarketed.]<f**/>
(3) (a) The portion of the Purchase Price corresponding to
the interest accrued on such Bonds equals $_____________.
(b) The portion of the Purchase Price corresponding to
principal of such Bonds equals $_____________.
(c) The Purchase Price of such Bonds equals
$____________, the sum of (a) hereof plus (b) hereof.
<f*> Use when demand for payment is made under Section 3.1 of the
Indenture in connection with the substitution of a
Substitute Letter of Credit (as defined in the Indenture).
<f**> Use when demand for payment is made under Section
2.2(f) of the Indenture in connection with the
conversion to a Fixed Interest Rate (as defined in the
Indenture).<PAGE>
(d) (i) The total Purchase Price for all Bonds
tendered for purchase on the aforesaid date (whether remarketed
or not) is $__________ and (ii) the amount of remarketing
proceeds that are to be applied pursuant to Section 3.7 of the
Indenture to the payment of the Purchase Price prior to funds
derived from a demand for payment under the Letter of Credit is
$_____________.
(4) The demand for payment made hereby under the Letter of
Credit does not exceed (i) the amount of Paragraph 3(d)(i) hereof
less the amount in Paragraph 3(d)(ii) hereof; (ii) in the case of
the portion of the drawing corresponding to the interest on such
Bonds, the Interest Portion available to be drawn under the
Letter of Credit; and (iii) in the case of the portion of the
drawing corresponding to the principal of such Bonds, the
Principal Portion available to be drawn under the Letter of
Credit.
(5) The Trustee has not received any notice from any party
of an event of default under the Reimbursement Agreement or the
Indenture or any agreement or instrument related thereto that has
not been rescinded by the party giving such notice or waived in
writing by the Bank.
(6) The amount hereby demanded was computed in accordance
with the terms and conditions of the Bonds and the Indenture.
(7) The amount hereby demanded is not, in whole or in part,
with respect to Bonds held of record by the Company or for the
account of the Company.
(8) The Trustee hereby directs you to make payment of the
amount demanded hereby [by deposit] [by wire transfer] to account
no. ______________ at ______________.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of this ____ day of ______________, 19___.
SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION
as Trustee
By:_______________________________
Title:_________________________
D-2<PAGE>
Exhibit E
CERTIFICATION FOR REDUCTION OF STATED AMOUNT
--------------------------------------------
The undersigned hereby certifies to The Bank of Nova Scotia (the
"Bank"), with reference to Irrevocable Letter of Credit No. [ ]
(the "Letter of Credit") issued by the Bank in favor of Shawmut Bank
Connecticut, National Association, as Trustee (the "Trustee"), that
he is a duly authorized officer of the Trustee, that any capitalized
term used but not defined herein shall have its respective meaning set
forth in the Letter of Credit and that:
(1) The Trustee, is the Trustee under the Indenture.
(2) Effective on _____________, 19___ [interest date at
least three Business Days after the date of the certificate], the
Stated Amount shall be reduced to $___________, of which an
amount not exceeding (a) $___________ shall be the available
Principal Portion of the Stated Amount and (b) $___________ shall
be the available Interest Portion of the Stated Amount.
IN WITNESS WHEREOF, the Trustee has executed and delivered this
Certificate as of the _____ day of _____________, 19___.
SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION
as Trustee
By:____________________________
Title:______________________<PAGE>
Exhibit F
NOTICE OF EXTENSION
-------------------
________________, 19___
Shawmut Bank Connecticut, National Association
777 Main Street
Hartford, Connecticut 06115
Attention: Corporate Trust Department
Scotsman Group Inc.
775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Attention: Donald D. Holmes
Scotsman Industries, Inc.
775 Corporate Woods Parkway
Vernon Hills, Illinois 60061
Attention: Donald D. Holmes
Ladies and Gentlemen:
Reference is hereby made to Irrevocable Letter of Credit No.
[ ] , dated April 29, 1994 (the "Letter of Credit"), established
by us in favor of Shawmut Bank Connecticut, National Association, as
Trustee. We hereby notify you that, in accordance with the terms of
the Letter of Credit and the Reimbursement Agreement, the Stated
Expiration Date of the Letter of Credit has been extended to
______________, 199___.
This letter should be attached to the Letter of Credit and made a
part thereof.
THE BANK OF NOVA SCOTIA
By:____________________________
Title:______________________<PAGE>
Exhibit G
FORM OF TRANSFER LETTER
-----------------------
________________, 19___
The Bank of Nova Scotia
600 Peachtree Street, N.E.
Suite 2700
Atlanta, Georgia 30308
Re: The Bank of Nova Scotia Irrevocable Letter of Credit No.
[ ]
Ladies and Gentlemen:
For value received, the undersigned beneficiary hereby
irrevocably transfers to:
(Name of Transferee)
(Address),
all rights of the undersigned beneficiary to make demands for payment
under the above-referenced Letter of Credit (the "Letter of Credit")
in its entirety. Said transferee has succeeded the undersigned
Trustee under the Indenture of Trust, dated as of March 1, 1988, both
between Allendale County, South Carolina and the undersigned.
By this transfer, all rights of the undersigned beneficiary in
the Letter of Credit are transferred to the transferee and the
transferee shall have the sole rights as beneficiary thereof,
including sole rights relating to any amendments (whether increases or
extensions or other amendments) of the Letter of Credit and whether
now existing or hereafter made. All amendments of the Letter of Credit
are to be advised directly to the transferee without the necessity of
any consent of or notice to the undersigned beneficiary.<PAGE>
The advice of the Letter of Credit is returned herewith. We ask
that you endorse the transfer on the reverse thereof and forward it
directly to the transferee with your customary notice of transfer.
Yours very truly,
SIGNATURE AUTHENTICATED [Name of Beneficiary]
_____________________________ ______________________________
(Bank) as Trustee
By:___________________________
Title:_____________________
____________________________
(Authorized Signature)
SIGNATURE AUTHENTICATED [Name of Transferee]
____________________________ _______________________________
(Bank) as Trustee
By:____________________________
Title:______________________
____________________________
(Authorized Signature)
G-2<PAGE>
