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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): JUNE 25, 1996
THERMADYNE HOLDINGS CORPORATION
(Exact name of Registrant as specified in charter)
DELAWARE 0-23378 74-2482571
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
101 SOUTH HANLEY ROAD 63105
ST. LOUIS, MISSOURI (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (314) 721-5573
------------------------------
Number of sequentially numbered pages
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Exhibit index appears on page
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
The Company's press release dated June 27, 1996 and filed herewith as
Exhibit 2.4 is incorporated by reference herein.
ITEM 5. OTHER EVENTS
The Company's press release dated June 27, 1996 and filed herewith as
Exhibit 2.4 is incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits.
2.1 - Stock Purchase Agreement, dated as of April 19, 1996, by and
among Incentive A/S, Thermadyne Holdings Corporation and
Clarke Holding Corporation.
2.2 - Amendment to Stock Purchase Agreement, dated as of June 27,
1996, by and among Thermadyne Holdings Corporation, Clarke
Holding Corporation and Clarke Cleaning Equipment Corporation.
2.3 - Amended and Restated Credit Agreement, dated as of June 25,
1996, by and among Thermadyne Holdings Corporation, various
lending institutions and Bankers Trust Company, as Agent.
2.4 - Press Release dated June 27, 1996.
2
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
THERMADYNE HOLDINGS CORPORATION
Date: July 10, 1996 By: James H. Tate
------------------------------------
James H. Tate
Senior Vice President and
Chief Financial Officer
3
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The registrant hereby agrees to supplementally furnish to the
Securities and Exchange Commission, upon request, copies of any omitted
schedule to the Stock Purchase Agreement, dated as of April 19, 1996, by and
among Incentive A/S, Thermadyne Holdings Corporation and Clarke Holding
Corporation, as amended, or to the Amended and Restated Credit Agreement, dated
as of June 25, 1996, by and among Thermadyne Holdings Corporation, various
lending institutions and Bankers Trust Company, as Agent.
THERMADYNE HOLDINGS
CORPORATION
Date: July 10, 1996 By: James H. Tate
-----------------------------------
James H. Tate
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
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Exhibit Page
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2.1 - Stock Purchase Agreement, dated as of April 19, 1996, by and among
Incentive A/S, Thermadyne Holdings Corporation and Clarke Holding
Corporation.
2.2 - Amendment to Stock Purchase Agreement, dated as of June 27, 1996, by
and among Thermadyne Holdings Corporation, Clarke Holding Corporation
and Clarke Cleaning Equipment Corporation.
2.3 - Amended and Restated Credit Agreement, dated as of June 25, 1996, by
and among Thermadyne Holdings Corporation, various lending institutions
and Bankers Trust Company, as Agent.
2.4 - Press Release dated June 27, 1996.
</TABLE>
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EXHIBIT 2.1
STOCK PURCHASE AGREEMENT
AMONG
INCENTIVE A/S
THERMADYNE HOLDINGS CORPORATION
AND
CLARKE HOLDING CORPORATION
WITH RESPECT TO THE SALE OF ALL OF THE OUTSTANDING
CAPITAL STOCK OF CLARKE HOLDING CORPORATION
DATED APRIL 19, 1996
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TABLE OF CONTENTS
<TABLE>
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ARTICLE I
DEFINITIONS
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SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II
THE ACQUISITION
---------------
SECTION 2.1. Purchase and Sale of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.2. Consideration for the Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
------------------------------------------
SECTION 3.1. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.2. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 3.3. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.4. Capitalization of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 3.5. Subsidiaries and Equity Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.6. Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 3.7. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.8. Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.9. Absence of Certain Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 3.10. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.11. Property; Liens and Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.12. Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3.13. Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.14. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.15. Compliance with Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.16. Brokers' Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.17. Proprietary Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
</TABLE>
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SECTION 3.18. Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.19. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.20. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.21. Personnel Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.22. Condition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.23. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.24. Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.25. No Consolidation of Corporate Entities . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.26. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.27. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF BUYER
SECTION 4.1. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.2. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.3. No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.4. Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.5. Brokers' Fees and Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 4.6. Purchase for Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V
COVENANTS
SECTION 5.1. Conduct of Business of the Company Prior to the Closing. . . . . . . . . . . . . . . . . . . . 17
SECTION 5.2. Access to Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 5.3. All Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.4. Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.5. Public Announcements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.6. Disclosure Supplements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.7. No Implied Representations or Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.8. Employee Benefit Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.9. Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.10. Net Worth of the Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.11. Noncompetition; Nonsolicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.12. Acquisition Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.13. Termination Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
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SECTION 5.14. Transition Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE VI
CLOSING CONDITIONS
------------------
SECTION 6.1. Conditions to Each Party's Obligations under this Agreement . . . . . . . . . . . . . . . . . 24
SECTION 6.2. Conditions to the Obligations of Buyer under this Agreement . . . . . . . . . . . . . . . . . 25
SECTION 6.3. Conditions to the Obligations of Holdings under this Agreement . . . . . . . . . . . . . . . . 25
ARTICLE VII
CLOSING
-------
SECTION 7.1. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
----------------------------
SECTION 8.1. Survival of Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . 27
SECTION 8.2. Limitations on Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 8.3. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 8.4. Defense of Claims . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 8.5. Adjustment to Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 8.6. Exclusive Remedy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 8.7. Hold Harmless; No Contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE IX
TERMINATION AND ABANDONMENT
---------------------------
SECTION 9.1. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 9.2. Procedure and Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
</TABLE>
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ARTICLE X
MISCELLANEOUS PROVISIONS
------------------------
SECTION 10.1. Amendment and Modification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 10.2. Waiver of Compliance; Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 10.3. Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 10.4. Expenses and Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 10.5. Parties in Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 10.6. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 10.7. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10.8. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10.9. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10.10. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 10.11. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 10.12. Specific Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
</TABLE>
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement"), dated April 19, 1996, by
and among Incentive A/S, a Danish corporation ("Buyer"), Thermadyne Holdings
Corporation, a Delaware corporation ("Holdings"), and Clarke Holding
Corporation, a Delaware corporation (the "Company").
RECITALS:
--------
WHEREAS, Holdings is the record and beneficial owner of all of the
issued and outstanding shares of common stock, par value $.01 per share, of the
Company (the "Common Stock");
WHEREAS, the Company and its subsidiaries are all of the Subsidiaries
of the Holdings engaged in the floor maintenance business;
WHEREAS, Holdings desires to sell to Buyer, and Buyer desires to
purchase from Holdings, all of the issued and outstanding shares of Common
Stock, all in accordance with the provisions of this Agreement;
WHEREAS, the Board of Directors of Holdings and the Board of Directors
of Buyer have approved the acquisition of the Company by Buyer pursuant to this
Agreement; and
WHEREAS, each of Buyer and Holdings desires to make certain
representations, warranties and agreements in connection with the sale and
acquisition of the Common Stock and also desires to set forth various
conditions precedent thereto.
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements herein contained, the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
-----------
SECTION 1.1. Definitions. For purposes of this Agreement, the term:
(a) "affiliate" means a person that directly or indirectly,
through one or more intermediaries, controls, is controlled by, or is under
common control with, another person.
<PAGE> 7
(b) "Code" means the Internal Revenue Code of
1986, as amended (including any successor code), and the rules and regulations
promulgated thereunder.
(c) "contract" means any contract, agreement, indenture,
note, bond, loan, instrument, lease, conditional sales contract, mortgage,
license, franchise, insurance policy, commitment or other arrangement or
agreement.
(d) "Credit Agreement" means that certain Secured
Guaranteed Credit Agreement, dated as of December 2, 1993, among Holdings, the
financial institutions named therein, Bankers Trust Company, as Administrative
Agent, and the Bank of New York, as Documentation Agent, as amended.
(e) "Environmental Laws" means all applicable federal,
state or local laws (including but not limited to federal and state common law),
statutes, codes, rules or regulations including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA")
relating to the environment, natural resources, pollution or handling,
manufacturing, use, generation, storage, treatment, transportation, release or
threatened release or disposal of Hazardous Materials.
(f) "Governmental Authority" means any nation or
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
(g) "Hazardous Materials" means (1) any wastes, substances,
or materials (whether solids, liquids or gases) which are defined as a
"pollutant," contaminant," hazardous material," "hazardous waste," "hazardous
substance," "toxic material," "solid waste," or other similar designations in,
or otherwise subject to regulation under, any applicable Environmental Laws,
including, but not limited to, the following: CERCLA, the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., as amended from time to
time ("HMTA"), the Resource Conservation and Recovery Act, 42 U.S.C. Section
6901 et seq., as amended from time to time ("RCRA"), the Federal Water Pollution
Control Act, 33 U.S.C. Section 1251 et seq., as amended from time to time
("FWPCA"), the Clean Air Act, 42 U.S.C. Section 7401 et esq., as amended from
time to time ("CAA") and/or the Toxic Substances Control Act, 15 U.S.C. Section
2601 et seq., as amended from time to time ("TSCA"); (2) oil, as defined by the
Oil Pollution Act of 1990, 33 U.S.C. Section 2701 et seq., as amended from
time to time ("OPA-90"); (3) natural gas, synthetic gas and any mixtures
thereof; (4) asbestos and/or any material which contains any hydrated mineral
silicate, including, but not limited to, chrysotile, amosite, crociodolite,
tremolite, anthophylite and/or actinolite, whether friable or nonfriable; (5)
polychlorinated biphenyls ("PCBs"), or PCB-containing materials or fluids; (6)
radon; (7) any other hazardous radioactive, toxic or noxious substance,
material, pollutant, or solid, liquid or gaseous waste; and (8) any substance
that, whether by its nature or its use, is subject to regulation under any
Environmental Law or with respect to which any
2
<PAGE> 8
Environmental Law or Governmental Authority requires environmental
investigation, monitoring or remediation.
(h) "knowledge" of Holdings means the actual knowledge, after
due inquiry, of the individuals listed on Section 1.1(g) of the Disclosure
Schedule.
(i) "Material Adverse Effect" means a material adverse effect
of at least $7,500,000 with respect to the business, results of operations,
liabilities, properties, assets or financial condition of, in the case of
Holdings or the Company, the Company and its Subsidiaries taken as a whole, and
in the case of Buyer, Buyer and its Subsidiaries taken as a whole or a material
adverse effect on the transactions contemplated by this Agreement.
(j) "person" means an individual, corporation,
partnership, joint venture, association, trust, unincorporated organization or,
as applicable, any other entity.
(k) "Release" means any emission, spill, seepage, leak,
escape, leaching, discharge, injection, pumping, pouring, emptying, dumping,
disposal, release, or threatened release of Hazardous Materials into the
environment (including the abandonment or discarding of barrels, containers or
other receptacles containing Hazardous Materials), whether as a result of
on-site operation of the Company or its Subsidiaries or as a result of off-site
transportation, transfer or disposal of Hazardous Materials.
(l) "Senior Debt" means all indebtedness of Holdings and its
Subsidiaries under the Credit Agreement.
(m) "Shares" means the 88,154 shares of Common Stock being
sold by Holdings to Buyer pursuant to this Agreement.
(n) "Subsidiary" means any person of which at least a
majority of the outstanding shares or other equity interests having ordinary
voting power for the election of directors or comparable managers of such person
is owned, directly or indirectly, by another person.
(o) "Taxes" means any and all federal, state, local, foreign
and other taxes, levies, fees, imposts, duties and similar governmental charges
(including any interest, penalties or additions to tax imposed in connection
therewith or with respect thereto) including, without limitation, taxes imposed
on, or measured by, income, franchise, profits or gross receipts, and ad
valorem, value added, sales, use, service, real or personal property, capital
stock, license, payroll, withholding, employment, social security, unemployment,
compensation, utility, severance, production, excise, stamp, occupation,
premium, windfall profits, transfer and gains taxes, and customs duties.
3
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(p) "Tax Returns" means any report, return or statement
required to be supplied to a taxing authority in connection with Taxes.
ARTICLE II
THE ACQUISITION
---------------
SECTION 2.1. Purchase and Sale of Shares. On the terms and subject
to the conditions hereof, and in reliance upon the respective representations,
warranties, covenants and agreements of each of the respective parties to this
Agreement, at the Closing, Holdings will sell, assign, transfer and convey to
Buyer, and Buyer will purchase and acquire from Holdings, all right, title and
interest of Holdings in and to the Shares, free and clear of all Liens (as
hereinafter defined).
SECTION 2.2. Consideration for the Shares. The aggregate purchase
price payable by Buyer for the Shares shall be $108.376 million (the "Purchase
Price") in cash. On the Closing Date, Buyer will pay the Purchase Price by
wire transfer of immediately available funds to such account as Holdings shall
have designated in writing at least two days prior to the Closing Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
------------------------------------------
Holdings represents and warrants to Buyer as set forth below.
SECTION 3.1. Organization and Qualification. Each of Holdings, the
Company and the Company's Subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation, with all requisite corporate power and authority to own, operate
and lease its properties and to carry on its business as it is now being
conducted. Each of the Company and its Subsidiaries is qualified or licensed
to do business and is in good standing in every jurisdiction where the nature
of the business conducted by it or the properties owned or leased by it
requires qualification, except where the failure to be so qualified or licensed
is not, in the aggregate, reasonably likely to have a Material Adverse Effect.
Holdings has delivered or made available to Buyer complete and correct copies
of the Certificates or Articles of Incorporation and Bylaws of the Company and
each of its Subsidiaries.
SECTION 3.2. Authorization. Each of Holdings and the Company has
full corporate power and authority to execute and deliver this Agreement and
the Transition Services
4
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Agreements (as hereinafter defined) and to consummate the transactions
contemplated hereby and thereby. The execution and delivery of this Agreement
by Holdings and the Transition Services Agreements by the Company, the
performance by Holdings and the Company of their respective obligations
hereunder and thereunder, and the consummation by them of the transactions
contemplated hereby and thereby, have been duly authorized by their respective
Boards of Directors. No other corporate action on the part of Holdings or the
Company is necessary to authorize the execution and delivery of this Agreement
or the Transition Services Agreements or the consummation of the transactions
contemplated hereby or thereby. This Agreement has been duly and validly
executed and delivered by each of Holdings and the Company and constitutes a
valid and binding obligation of Holdings and the Company, enforceable against
each of them in accordance with its terms. When executed, the Transition
Services Agreements will have been duly and validly executed and delivered by
Holdings and will constitute a valid and binding obligation of Holdings
enforceable against it in accordance with its terms.
SECTION 3.3. No Violation. Except as set forth in Section 3.3 of the
Disclosure Schedule, neither the execution and delivery of this Agreement by
Holdings and the Company and the performance by Holdings and the Company of
their respective obligations hereunder nor the consummation by Holdings and the
Company of the transactions contemplated hereby will (a) violate, conflict with
or result in any breach of any provision of the Certificates of Incorporation
or Bylaws of Holdings or the Company, (b) violate, conflict with or result in a
violation or breach of, or constitute a default or give rise to any right of
termination or acceleration (with or without due notice or lapse of time or
both) or result in the acceleration of any payments under the terms, conditions
or provisions of any note, bond, mortgage, indenture or deed of trust, or any
license, lease or agreement to which Holdings or the Company is a party or by
which any of their assets is bound, (c) violate any order, writ, judgment,
injunction, decree, statute, rule or regulation of any court or Governmental
Authority applicable to Holdings or the Company or any of their assets or (d)
result in the creation of any Lien, except such defaults, accelerations,
violations and Liens which, in the aggregate, are not reasonably likely to have
a Material Adverse Effect.
SECTION 3.4. Capitalization of the Company. The authorized capital
stock of the Company consists of 88,154 shares, all of which are designated
Common Stock. As of the date hereof, the Company has 88,154 shares of Common
Stock issued and outstanding (constituting the Shares), all of which have been
validly issued, are fully paid and non-assessable and were not issued in
violation of any preemptive rights. There are no (i) options, warrants, calls,
subscriptions, conversion or other rights, agreements or commitments obligating
the Company to issue any additional shares of capital stock or any other
securities convertible into, exchangeable for or evidencing the right to
subscribe for any shares of capital stock of the Company, (ii) agreements or
commitments obligating the Company to repurchase, redeem or otherwise acquire
any shares of capital stock of the Company, (iii) restrictions to the transfer
of any shares of capital stock of the Company or
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(iv) requirements of the Company or Holdings to vote any shares of capital
stock of the Company. The Shares are held of record and beneficially by
Holdings free and clear of all Liens other than the pledge thereof to secure
the Senior Debt. At Closing good title to the Shares shall be conveyed to
Buyer free and clear of all Liens.
SECTION 3.5. Subsidiaries and Equity Investments.
-----------------------------------
(a) Section 3.5 of the Disclosure Schedule sets forth the
name, jurisdiction of incorporation, capitalization and percentage ownership of
each Subsidiary of the Company. The Company has no direct or indirect equity
ownership in any person other than the Subsidiaries.
(b) All of the outstanding shares of capital stock of each
Subsidiary of the Company have been duly authorized and validly issued, are
fully paid and non-assessable, have not been issued in violation of any
preemptive rights, and, except as specified in Section 3.5 of the Disclosure
Schedule, are owned of record and beneficially, directly or indirectly, by the
Company, free and clear of any Liens.
(c) There are no (i) options, warrants, calls, subscriptions,
conversion or other rights, agreements or commitments obligating any of the
Company's Subsidiaries to issue any additional shares of capital stock of such
Subsidiary or any other securities convertible into, exchangeable for or
evidencing the right to subscribe for any shares of such capital stock, (ii)
agreements or commitments obligating any Subsidiary of the Company to
repurchase, redeem or otherwise acquire any shares of capital stock of such
Subsidiary, (iii) restrictions to the transfer of any shares of capital stock of
any Subsidiary of the Company or (iv) requirements of the Company or Holdings to
vote any shares of capital stock of any Subsidiary of the Company.
SECTION 3.6. Consents and Approvals. Except as set forth in Section
3.6 of the Disclosure Schedule, no filing or registration with, no notice to
and no permit, authorization, consent or approval of any Governmental Authority
is necessary for the consummation by Holdings and the Company of the
transactions contemplated by this Agreement other than (a) consents and
approvals of or filings or registrations with the Antitrust Division of the
United States Department of Justice (the "DOJ") pursuant to the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and (b) consents, registrations, approvals, authorizations, permits,
filings or notifications which the failure to obtain, in the aggregate, would
not be reasonably likely to have a Material Adverse Effect.
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SECTION 3.7. Financial Statements. Set forth in Section 3.7 of the
Disclosure Schedule are (a) copies of the unaudited consolidated balance sheets
of the Company as of December 31, 1994 and December 31, 1995, together with the
related unaudited consolidated statements of income and cash flows for the
years then ended, and (b) copies of the unaudited consolidated balance sheet of
the Company as of March 31, 1996 (the "Interim Balance Sheet"), together with
the related unaudited consolidated statements of income and cash flows for the
three-month period ended on such date (such financial statements being
hereinafter referred to as the "Financial Statements"). The Financial
Statements (i) were prepared in accordance with generally accepted accounting
principles applied on a consistent basis ("GAAP") throughout the periods
covered thereby, except as otherwise noted thereon or disclosed in Section 3.7
of the Disclosure Schedule and except for the absence of notes thereto, (ii)
prepared in all material respects in accordance with the books and records of
the Company, and (iii) present fairly in all material respects the consolidated
financial position, results of operations and cash flows of the Company as of
such dates and for the periods then ended (subject, in the case of the
unaudited interim Financial Statements, to normal recurring adjustments).
SECTION 3.8. Absence of Undisclosed Liabilities. Except for matters
relating to the transactions contemplated by this Agreement, there are no
liabilities (whether known or unknown, contingent or absolute, matured or
unmatured) or financial obligations of the Company or any of its Subsidiaries
that are required to be reflected on a balance sheet prepared in accordance
with GAAP, other than liabilities and obligations (a) provided for or reserved
against in the Financial Statements, (b) arising after March 31, 1996 in the
ordinary course of business, (c) liabilities which are not material to the
financial position of the Company, or (d) disclosed in Section 3.8 of the
Disclosure Schedule.
SECTION 3.9. Absence of Certain Changes. Except as disclosed in
Section 3.9 of the Disclosure Schedule, since March 31, 1996, neither the
Company nor any of its Subsidiaries has (a) suffered any change in its
business, operations or financial position, except such changes which, in the
aggregate, have not had and are not reasonably likely to have a Material
Adverse Effect, (b) conducted its business in any material respect not in the
ordinary and usual course, (c) except in the ordinary course of business,
incurred any indebtedness for borrowed money or issued any debt securities or
assumed, guaranteed or endorsed the obligations of any other person except for
obligations of its Subsidiaries, (d) except in the ordinary course of business,
(i) sold, transferred or otherwise disposed of any of its property or assets or
(ii) mortgaged or encumbered any of its property or assets, (e) suffered any
material casualty losses not covered by insurance, (f) extinguished any
liability not reflected on the Company's Financial Statements, or (g)
repurchased any capital stock of the Company or any of its Subsidiaries, or (h)
agreed in writing to take any of the foregoing actions.
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SECTION 3.10. Litigation. Except as set forth in Section 3.10 of the
Disclosure Schedule, there is no action, suit, arbitration, investigation or
proceeding ("Litigation") pending or, to the knowledge of Holdings, threatened
against the Company or any of its Subsidiaries before any court, arbitrator or
administrative or governmental body which, if determined adversely, is
reasonably likely to have a Material Adverse Effect. Neither the Company nor
any of its Subsidiaries is in default under any judgment, decree, injunction or
order of any court, governmental department, commission, agency,
instrumentality or arbitrator outstanding against the Company or any of its
Subsidiaries which could reasonably be expected to have a Material Adverse
Effect.
SECTION 3.11. Property; Liens and Encumbrances.
---------------------------------
(a) Section 3.11 of the Disclosure Schedule contains a
complete and accurate list of all real property owned or leased by the Company
or its Subsidiaries as of the date hereof.
(b) Except as set forth in Section 3.11 of the Disclosure
Schedule, all properties and assets owned (the "Owned Properties") by the
Company and its Subsidiaries are free and clear of all liens, pledges, claims,
security interests, mortgages, assessments, easements, rights of way, covenants,
restrictions, rights of first refusal, defects in title, encroachments and other
burdens (collectively, "Liens") except (i) statutory Liens not yet delinquent or
the validity of which are being contested in good faith by appropriate actions,
(ii) purchase money Liens arising in the ordinary course, (iii) Liens for taxes
not yet delinquent, (iv) Liens reflected in the Financial Statements (which have
not been discharged) and (v) Liens which in the aggregate do not materially
detract from the value or, in the case of personal property, materially impair
the use by the Company or any of its Subsidiaries of properties or assets
subject thereto or, in the case of real property, materially impair the present
and continued use in the usual and normal conduct of the business of the Company
and its Subsidiaries. The Company and its Subsidiaries, as the case may be,
have good and indefeasible title to the Owned Properties and there are no
pending or, to the knowledge of Holdings, threatened condemnation proceedings
affecting any of the Owned Properties. Each of the lease agreements with
respect to the properties leased by the Company or any Subsidiary is in full
force and effect, and the Company and its Subsidiaries are not in material
default under any such lease.
SECTION 3.12. Certain Agreements. Except as described in Section
3.12 of the Disclosure Schedule, neither the Company nor any of its
Subsidiaries is a party to any written agreement with any officer, director or
employee of the Company or any of its Subsidiaries (a) the benefits of which
are contingent, or the terms of which are materially altered, upon the
occurrence of a transaction involving the Company of the nature of any of the
transactions contemplated by this Agreement, (b) providing severance benefits
or other benefits after the termination of employment regardless of the reason
for such termination of
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employment, or (c) any of the benefits of which will be increased, or the
vesting of benefits of which will be accelerated, by the occurrence of any of
the transactions contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the transactions
contemplated by this Agreement. Except as disclosed in Section 3.12 of the
Disclosure Schedule, neither the Company nor any of its Subsidiaries is a party
to any written (i) agreement, contract, indenture or other instrument relating
to the borrowing of money or the guarantee of any obligation for the borrowing
of money, (ii) bonus or severance agreement, (iii) employment or consulting
agreement, (iv) license agreement, (v) dealer agreement, (vi) distributor
agreement, (vii) floor plan agreement, (viii) agreement with the U.S.
government, (ix) pricing commitment or purchase agreement, (x) compensation
plan, (xi) benefit plan (whether or not covered by ERISA), (xii) retirement
plan or agreement, (xiii) supplemental retirement plan, (xiv) lease, (xv)
collective bargaining agreement, (xvi) mortgage, (xvii) industrial revenue
bond, (xviii) pledge agreement, (xix) private label lease agreement, (xx)
representations agreement, or (xxi) other contract, agreement or commitment of
the Company or any of its Subsidiaries material to the operations of the
Company or any of its Subsidiaries. Neither the Company nor any of its
Subsidiaries is in default under any of the agreements, contracts or
obligations described in Section 3.12 of the Disclosure Schedule, except such
defaults which, in the aggregate, are not reasonably likely to have a Material
Adverse Effect. Each of such agreements, contracts and obligations are, to the
knowledge of Holdings, in full force and effect and have been complied with by
the Company and its Subsidiaries, as the case may be, except for any instance
of noncompliance that has not had and is not likely to have a Material Adverse
Effect. Except as set forth in Section 3.12 of the Disclosure Schedule, no
consent is required under any contract or agreement listed on Section 3.12 of
the Disclosure Schedule in connection with the consummation of the transactions
contemplated by this Agreement except for consents which the failure to obtain
would not be reasonably likely to have a Material Adverse Effect.
SECTION 3.13. Employee Benefit Plans.
----------------------
(a) Section 3.13 of the Disclosure Schedule sets forth a true
and complete list of each "employee benefit plan" (within the meaning of Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is maintained or contributed to by the Company or any of its
Subsidiaries ("Employee Benefit Plans") as of the date of this Agreement.
(b) Neither the Company nor any of its Subsidiaries maintains
or contributes to, or on or after the date which is six years prior to the date
of this Agreement (the "6-Year Look Back Date") has maintained or contributed
to, any "multiemployer plan," as such term is defined in Section 3(37) or
Section 4001(a)(3) of ERISA, or any single-employer defined benefit plans
covered by Title IV of ERISA. Each Employee Benefit Plan
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<PAGE> 15
which is intended to be qualified under Section 401(a) and, if applicable,
Section 401(k) of the Code, is so qualified.
Except as disclosed in Section 3.13 of the Disclosure
Schedule, no action, suit or proceeding relating to any Employee Benefit Plan
(other than claims for benefits for which the plan administrative procedures
have not been exhausted and "qualified domestic relations orders" as defined in
Section 414(p) of the Code) is pending or, to the knowledge of Holdings,
threatened against the Company or any of its Subsidiaries before any court,
arbitrator or administrative or governmental body. Neither the Company nor any
of its Subsidiaries has failed to make contributions to any Employee Benefit
Plan that are required to be made on or after the 6-Year Look Back Date under
the terms of such Employee Benefit Plans or under applicable law. To the
knowledge of Holdings, none of the Company, any of its Subsidiaries, any
officer of the Company or any of its Subsidiaries, or any of the Employee
Benefit Plans (or any trusts created thereunder or any trustee or administrator
thereof) has engaged in a "prohibited transaction," as such term is defined in
Section 4975 of the Code or under ERISA on or after the 6-Year Look Back Date,
which could reasonably subject the Company, its Subsidiaries, any officer of
the Company or any of its Subsidiaries, any of such plans or any trust to any
material tax or penalty on prohibited transactions or any other liability
imposed by such Section 4975 or under ERISA.
(c) All Employee Benefit Plans comply and have been
administered in form and in operation with all applicable requirements of law
except for such instances of noncompliance that would not reasonably be expected
to have a Material Adverse Effect, and no notice has been issued by any
governmental authority challenging such compliance.
(d) No Employee Benefit Plan, employment agreement or
consulting agreement, individually or collectively, provides for any payment by
the Company or any of its Subsidiaries that is an "excess parachute payment"
pursuant to Section 280G of the Code.
SECTION 3.14. Taxes. Except as set forth in Section 3.14 of the
Disclosure Schedule:
(a) all material Tax Returns required to be filed by the
Company and its Subsidiaries have been filed, and each of the Company and its
Subsidiaries has paid all Taxes that are shown to be due on such Tax Returns;
(b) there are no outstanding agreements extending the
statutory period of limitation applicable to any claim for, or the period for
the collection or assessment of, Taxes due from the Company or its Subsidiaries
for any taxable period; and
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(c) no audit or other proceeding by any court or
Governmental Authority is pending or, to the knowledge of Holdings, threatened
with respect to any Taxes due from or with respect to the Company or its
Subsidiaries.
SECTION 3.15. Compliance with Applicable Law. The businesses of the
Company and its Subsidiaries are not being conducted in violation of any
provision of any Federal, state, local or foreign statute, law, ordinance,
rule, regulation, judgment, decree, order, concession, grant, franchise, permit
or license or other governmental authorization or approval applicable to the
Company or any of its Subsidiaries, except such violations which, in the
aggregate, are not reasonably likely to have a Material Adverse Effect.
SECTION 3.16. Brokers' Fees and Commissions. Except for Gleacher
NatWest Inc. (whose compensation is solely the responsibility of Holdings),
none of Holdings, the Company and their respective directors, officers,
employees or agents has employed any investment banker, broker or finder in
connection with the transactions contemplated hereby.
SECTION 3.17. Proprietary Rights.
------------------
(a) Section 3.17 of the Disclosure Schedule contains a
complete and accurate list of (i) all registered patents, trademarks,
copyrights, service marks and tradenames of the Company and its Subsidiaries and
(ii) all patent and trademark applications of the Company or its Subsidiaries
which have been filed and are currently pending.
(b) Except as set forth in Section 3.17 of the Disclosure
Schedule, (i) the Company and its Subsidiaries own or possess adequate licenses
or other valid rights to use all United States and foreign patents, trademarks,
trade names, service marks, copyrights and applications therefor which are owned
or used by the business of the Company and its Subsidiaries (the "Patent and
Trademark Rights"), (ii) as of the date of this Agreement, the validity of the
Patent and Trademark Rights and the title thereto of the Company or any
Subsidiary are not being questioned in any litigation to which the Company or
any Subsidiary is a party, nor to the knowledge of Holdings, is any such
litigation threatened and (iii) as of the date of this Agreement, to the
knowledge of Holdings, the conduct of the business of the Company and its
Subsidiaries as now conducted does not conflict with any valid patents,
trademarks, trade name, service marks or copyrights of others in any way which
is reasonably likely to have a Material Adverse Effect.
SECTION 3.18. Labor Relations. Except as listed or described in
Section 3.18 of the Disclosure Schedule, the Company and its Subsidiaries (i)
have no unfair labor practice charges or complaints pending or, to the
knowledge of Holdings, threatened against any of them before the National Labor
Relations Board, (ii) have no grievance pending or threatened against them, and
(iii) have no charges pending before the Equal Employment Opportunity
Commission or any state or local agency responsible for the prevention of
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unlawful employment practices. There is no labor strike, slow down, work
stoppage or lockout pending or, to the knowledge of Holdings, threatened
against the Company or any of its Subsidiaries. The consummation of the
transaction contemplated by this Agreement will not create any obligation of
the Company or any of its Subsidiaries to pay any severance to any employee of
the Company or any Subsidiary of the Company for which Holdings will not be
responsible.
SECTION 3.19. Insurance. All material insurance policies (the
"Insurance Policies") with respect to the property, assets, operations and
business of the Company and its Subsidiaries are listed in Section 3.19 of the
Disclosure Schedule and are in full force and effect. Except as set forth in
Section 3.19 of the Disclosure Schedule, as of the date of this Agreement,
there are no pending material claims against the Insurance Policies by the
Company or any of its Subsidiaries as to which the insurers have denied
liability. Holdings makes no representation or warranty that such insurance
will be continued or is continuable after the Closing; provided, however,
Holdings will keep in full force and effect its product liability insurance
coverage subsequent to the Closing for acts or omissions by the Company or it
Subsidiaries occurring prior to the Closing and giving rise to product
liability claims thereafter asserted. None of Holdings, the Company or any
Subsidiary of the Company has at any time during the three years immediately
preceding the date of this Agreement been unable to obtain at competitive rates
insurance coverage of types and in amounts customary for similar companies in
the same business engaged in by the Company and its Subsidiaries.
SECTION 3.20. Environmental Matters. (a) Except as disclosed on
Section 3.20 of the Disclosure Schedule:
(i) the operations of the Company and its Subsidiaries
and the real property currently owned, leased or operated by the
Company and its Subsidiaries and all improvements thereon are in
compliance and, during the period of the Company's or any Subsidiary's
ownership, tenancy or alteration have been in compliance, with all
applicable Environmental Laws, except for non-compliance which,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect;
(ii) each of the Company and its Subsidiaries has
obtained all permits, licenses, certificates, approvals and other
authorizations that are required under applicable Environmental Laws
("Environmental Permits") to conduct their businesses except where the
failure to possess such Environmental Permits, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(iii) no judicial or administrative proceedings or
investigations are pending or, to the knowledge of Holdings, threatened
against the Company or its Subsidiaries and no written or, to the
knowledge of Holdings, oral notice, complaint,
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directive, notice of responsibility, notice of potential
responsibility, information request, citation or summons has been
delivered to the Company or its Subsidiaries by any Governmental
Authority or any other person pursuant to any applicable Environmental
Laws (collectively, "Environmental Claims"), except for such
Environmental Claims which, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect;
(iv) the real property currently (or, to the knowledge
of Holdings, formerly) owned, operated or leased by the Company or its
Subsidiaries is free from contamination which could reasonably be
expected to have a Material Adverse Effect;
(v) no real property currently (or to the knowledge of
Holdings, formerly) owned, operated or leased by the Company or its
Subsidiaries is listed or has been proposed for listing on the National
Priorities List, the Comprehensive Environmental Response Compensation
and Liability and Information System ("CERCLIS") or any analogous state
lists;
(vi) there are not now on, in or under any real property
owned, leased or operated by the Company or its Subsidiaries (i) any
underground storage tanks ("USTs"), (ii) any asbestos-containing
materials ("ACMs"), (iii) any polychlorinated biphenyls ("PCBs"), or
(iv) to the knowledge of Holdings, any Hazardous Materials, except for
such USTs, ACMs, PCBs or Hazardous Materials the presence of which
could not reasonably be expected to have a Material Adverse Effect;
(vii) no portion of the real property currently (or, to
the knowledge of Holdings, formerly) owned, leased, or operated by the
Company and its Subsidiaries has been used as a dump or landfill or
consists of filled in land except where such condition has not and
could not reasonably be expected to have a Material Adverse Effect;
(viii) there has been no Release of Hazardous Materials
except as permitted under Environmental Permits issued to the Company
and its Subsidiaries at, on or from any real property currently owned,
leased or operated by the Company and its Subsidiaries that has had or
could be reasonably expected to have a Material Adverse Effect;
(ix) there have been no environmental investigations,
studies, audits, tests, reviews or other analyses conducted by or on
behalf of, or which are otherwise in the possession of, Holdings or the
Company or any Subsidiary of the Company relating to any real property
currently or formerly owned or leased by the Company
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or its Subsidiaries that have not been provided or otherwise made
available to Buyer; and
(x) no Hazardous Material used or generated in
connection with the operations of the Company or its Subsidiaries has
been transported or transferred to or disposed or at any off-site
facility except where such transport, transfer, or disposal has not and
could not reasonably be expected to have a Material Adverse Effect.
(b) A true and complete list of the Environmental Permits
issued to the Company or any of its Subsidiaries, all of which are, to the
knowledge of Holdings, in full force and effect is set forth in Section 3.20 of
the Disclosure Schedule.
SECTION 3.21. Personnel Information. Section 3.21 of the Disclosure
Schedule contains a true and complete list of all persons employed by the
Company, including a description of material compensation arrangements (other
than employee benefit plans described in Section 3.13 of the Disclosure
Schedule). Section 3.21 of the Disclosure Schedule contains a true and
complete list of the directors of the Company and of each of the Company's
Subsidiaries.
SECTION 3.22. Condition of Assets. The plant property (including the
Owned Properties), equipment and other tangible assets and properties which are
owned or leased by the Company and its Subsidiaries are in reasonable operating
condition, ordinary wear and tear excepted, such that would allow the Company
to conduct its business as it is presently being conducted.
SECTION 3.23. Books and Records. Copies of all the minute books and
stock record books of the Company have been delivered to Buyer for inspection
and contain accurate records of all meetings of, and written consents by, the
boards of directors (and any committees thereof) and stockholders of the
Company since its incorporation. All accounting, financial, reporting,
business tax, corporate and other similar books and records of the Company
accurately reflect in all material respects the business and financial
condition of the Company.
SECTION 3.24. Inventory. All inventory of the Company and its
Subsidiaries used in the conduct of their respective businesses, including,
without limitation, raw materials, work in progress and finished goods,
reflected on the Interim Balance Sheet or acquired since the date thereof was
acquired and has been maintained in the ordinary course of business, is of good
and merchantable quality, consists substantially of a quality, quantity and
condition useable, leasable or saleable in the ordinary course of business, and
is subject to the reserve for excess and obsolete inventory set forth on the
Interim Balance Sheet.
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SECTION 3.25. No Consolidation of Corporate Entities. None of
Holdings or its Subsidiaries has at any time (a) held itself and its
Subsidiaries out to the public or any of their respective creditors as being a
single entity with common assets or liabilities; (b) failed to observe
appropriate corporate formalities; or (c) failed to keep separate books,
records and accounts.
SECTION 3.26. Solvency. Immediately after giving effect to the
transactions contemplated hereby, Holdings (i) shall not be Insolvent, (ii)
shall not be left with unreasonably small capital with which to engage in its
business and (iii) shall not have incurred debts beyond its ability to pay such
debts as they mature such that the payment of the Purchase Price may be deemed
a "fraudulent conveyance" or impermissible dividend or distribution under
applicable law or otherwise subject to claims of certain creditors of Holdings
or its trustees in a bankruptcy proceeding. As used herein, the term
"Insolvent" means a financial condition such that the sum of such entity's
debts (including contingent liabilities) is greater than all of such entity's
property, at a fair valuation. Holdings further agrees to apply all net
proceeds received from Buyer for the Shares first to the payment of its
creditors prior to any application of such proceeds for other purposes.
SECTION 3.27. Full Disclosure. The representations and warranties of
Holdings contained in this Agreement (including the Disclosure Schedule) and in
any certificate furnished by, for, or on behalf of Holdings or the Company
pursuant hereto does not contain any untrue statement of a material fact or
omit to state a material fact necessary, in light of the circumstances under
which they were made, to make the statements contained herein or therein not
misleading. For purposes hereof, a "material fact" means a fact related to an
event, occurrence or condition that would reasonably be expected to have a
Material Adverse Effect.
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES OF BUYER
-------------------
Buyer hereby represents and warrants to Holdings as set forth below.
SECTION 4.1. Organization and Qualification. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with all requisite corporate power and
authority to own, lease and operate its properties and to carry on its
businesses as now being conducted, except where the failure to be so organized,
existing and in good standing or to have such power or authority is not, in the
aggregate, reasonably likely to have a Material Adverse Effect. Buyer is
qualified or licensed to do business and is in good standing in each
jurisdiction in which the ownership or
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<PAGE> 21
leasing of property by it or the conduct of its business requires such
licensing or qualification, except where the failure to be so qualified or
licensed is not, in the aggregate, reasonably likely to have a Material Adverse
Effect.
SECTION 4.2. Authorization. Buyer has full corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. No other corporate proceeding on the part of
Buyer is necessary to authorize the execution and delivery of this Agreement or
to consummate the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Buyer and constitutes a valid and
binding obligation of Buyer, enforceable against it in accordance with its
terms.
SECTION 4.3. No Violation. Neither the execution and delivery of
this Agreement by Buyer and the performance by Buyer of its obligations
hereunder nor the consummation by Buyer of the transactions contemplated hereby
will (a) violate, conflict with or result in any breach of any provision of the
Certificate or Articles of Incorporation or Bylaws of Buyer (or similar
organizational documents), (b) violate, conflict with or result in a violation
or breach of, or constitute a default (with or without due notice or lapse of
time or both) under the terms, conditions or provisions of any note, bond,
mortgage, indenture or deed of trust, or any material license, lease or
agreement to which Buyer or any of Buyer's Subsidiaries is a party or (c)
violate any order, writ, judgment, injunction, decree, statute, rule or
regulation of any court or domestic or foreign Governmental Authority
applicable to Buyer or any of Buyer's Subsidiaries, except such defaults and
violations which, in the aggregate, are not reasonably likely to have a
Material Adverse Effect.
SECTION 4.4. Consents and Approvals. No filing or registration with,
no notice to and no permit, authorization, consent or approval of any third
party or any Governmental Authority is necessary for the consummation by Buyer
of the transactions contemplated by this Agreement other than (a) consents and
approvals of or filings or registrations with the DOJ pursuant to the HSR Act,
(b) requirements of federal and state securities laws and (c) consents,
registrations, approvals, authorizations, permits, filings or notifications
which, in the aggregate, are not reasonably likely to have a Material Adverse
Effect.
SECTION 4.5. Brokers' Fees and Commissions. Except for Downer &
Company (whose compensation is solely the responsibility of Buyer), neither
Buyer nor any of its directors, officers, employees or agents has employed any
investment banker, broker or finder in connection with the transactions
contemplated hereby.
SECTION 4.6. Purchase for Investment. Buyer is acquiring the Shares
for its own account for investment purposes and not with a view to the
distribution of the Shares. Buyer has such knowledge and experience in
financial and business matters so as to be capable of evaluating the merits and
risks of its investment in the Shares. Buyer is an "accredited investor" as
defined in Rule 501 of the Securities Act of 1933, as amended. Buyer will not,
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directly or indirectly, dispose of the Shares except in compliance with
applicable federal and state securities laws.
ARTICLE V
COVENANTS
---------
SECTION 5.1. Conduct of Business of the Company Prior to the Closing.
Except as expressly contemplated by this Agreement, or with the prior written
consent of Buyer, during the period from the date of this Agreement to the
Closing, the Company will conduct its business and operations according to the
Company's ordinary and usual course of business and will use all reasonable
efforts consistent therewith to preserve intact and, as applicable, maintain in
good repair the Company's properties, assets and business organizations, to
keep available the services of the Company's officers and employees and to
maintain satisfactory relationships with customers, suppliers, distributors and
others having commercially beneficial business relationships with the Company,
in each case in the ordinary course of business. Without limiting the
generality of the foregoing, and except as otherwise provided in this
Agreement, neither the Company nor any of its Subsidiaries will, prior to the
Closing, without the prior written consent of Buyer:
(a) issue, sell or pledge, or authorize or propose the
issuance, sale or pledge of additional shares of capital stock of any class, or
securities convertible into any such shares, or any rights, warrants or options
to acquire any such shares or other convertible securities;
(b) redeem, purchase or otherwise acquire any outstanding
shares of the capital stock of the Company or its Subsidiaries;
(c) propose or adopt any amendment to the Certificate or
Articles of Incorporation or Bylaws of the Company or any of its Subsidiaries;
(d) except in the ordinary course of business, incur any
indebtedness for borrowed money or issue any debt securities or assume,
guarantee or endorse the obligations of any other person except for obligations
of the Company's Subsidiaries;
(e) increase in any manner the rate or terms of compensation
of any of its directors, officers or other employees, except such increases as
are granted in the ordinary course of business consistent with past practice;
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(f) except in the ordinary course of business, (i) sell,
transfer or otherwise dispose of any of its property or assets or (ii) mortgage
or encumber any of its property or assets;
(g) enter into other agreements, commitments or contracts,
except agreements, commitments or contracts made in the ordinary course of
business;
(h) declare, set aside or pay any dividend or other
distribution in respect of its capital stock, other than in cash in the ordinary
course of business in connection with Holdings and the Company's cash management
practices;
(i) except in the ordinary course of business or with respect
to capital projects approved prior to the date hereof, enter into any agreement
or commitment involving an aggregate capital expenditure or commitment exceeding
$100,000;
(j) amend, adopt or terminate any Employee Benefit Plan,
except as required by law;
(k) take any action that would result in a breach of the
representations and warranties of Holdings contained in Article III of this
Agreement; or
(l) agree in writing to take any of the foregoing actions.
SECTION 5.2. Access to Information. Between the date hereof and the
Closing Date, the Company and its Subsidiaries shall give to the Buyer and its
counsel, accountants, engineers and other authorized representatives and
agents, full access, during regular business hours and upon two days' advance
notice, to any and all of their respective premises, properties, contracts,
books and records, and will cause their respective officers and employees to
furnish to the Buyer and its representatives any and all data and information
pertaining, directly or indirectly, to the Company or its Subsidiaries that the
Buyer shall from time to time reasonably request, and shall permit Buyer and
its representatives to make extracts and copies thereof. If the acquisition
contemplated herein is consummated, the Buyer covenants and agrees that it
shall preserve and keep the records of the Company delivered to it hereunder
for a period of ten years from the Closing Date, and shall make such records
available to Holdings as reasonably required by Holdings in connection with any
legal proceedings by or against, or governmental investigations of, Holdings,
or in connection with any tax examination of Holdings or any consolidated group
of which Holdings was a part or for any other proper business purpose of
Holdings. Buyer shall be permitted to conduct Phase I and Phase II
environmental audits of the Company's offices and other facilities. A copy of
such reports (in draft and final form) shall be delivered to Holdings promptly
following receipt and in any event not later than five business days prior to
the Closing.
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SECTION 5.3. All Reasonable Efforts. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use all
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done as promptly as practicable, all things necessary, proper and
advisable under applicable laws and regulations to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement. If at any time after the Closing any further action is necessary or
desirable to carry out the purposes of this Agreement, including, without
limitation, the execution of additional instruments, the proper officers and
directors of each party to this Agreement shall take all such necessary action.
SECTION 5.4. Consents and Approvals. The parties hereto each will
cooperate with one another and use all reasonable efforts to prepare all
necessary documentation (including, without limitation, furnishing all
information required under the HSR Act), to effect promptly all necessary
filings and to obtain all necessary permits, consents, approvals, orders and
authorizations of, or any exemptions by, all third parties and Governmental
Authorities necessary to consummate the transactions contemplated by this
Agreement. Each party will keep the other parties apprised of the status of
any inquiries made of such party by the DOJ or any other Governmental Authority
or members of their respective staffs with respect to this Agreement or the
transactions contemplated hereby. Holdings and Buyer shall each pay one- half
of the required filing fee under the HSR Act.
SECTION 5.5. Public Announcements. Buyer and Holdings will consult
with each other and will mutually agree (the agreement of each party not to be
unreasonably withheld) upon the content and timing of any press release or
other public statements with respect to the transactions contemplated by this
Agreement and shall not issue any such press release or make any such public
statement prior to such consultation and agreement, except as may be required
by applicable law or by obligations pursuant to any listing agreement with any
securities exchange or any stock exchange regulations; provided, however, that
Buyer and Holdings will give prior notice to the other party of the content and
timing of any such press release or other public statement required by
applicable law or by obligations pursuant to any listing agreement with any
securities exchange or any stock exchange regulations.
SECTION 5.6. Disclosure Supplements. From time to time prior to the
Closing, Holdings will supplement or amend the Disclosure Schedule delivered in
connection herewith with respect to any matter which, if existing or occurring
at or prior to the date of this Agreement, would have been required to be set
forth or described in such Disclosure Schedule or which is necessary to correct
any information in such Disclosure Schedule which has been rendered inaccurate
thereby. Such supplements and amendments shall not be given effect for
purposes of Section 6.2(a); however, if the Closing occurs, Buyer except as
otherwise provided herein waives any right or claim it may otherwise have or
have had on account of any matter so disclosed in such supplement or amendment.
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SECTION 5.7. No Implied Representations or Warranties. Buyer hereby
acknowledges and agrees that neither Holdings nor the Company is making any
representation or warranty whatsoever, express or implied, except those
representations and warranties of Holdings explicitly set forth in this
Agreement or in the Disclosure Schedule or in any certificate contemplated
hereby and delivered by Holdings in connection herewith. Except as explicitly
set forth herein, none of Holdings, the Company, its Subsidiaries, or any of
the respective officers, directors, partners, employees, affiliates or
representatives, as the case may be, of Holdings, the Company, or the Company's
Subsidiaries has made or is making any representation, express or implied, as
to the value of any asset or business being so acquired, or any warranty of
merchantability, suitability or fitness for a particular purpose or quality,
with respect to any of the tangible assets being so acquired, or as to the
condition or workmanship thereof, or as to the absence of any defects therein,
whether latent or patent.
SECTION 5.8. Employee Benefit Matters.
-------------------------
(a) Buyer agrees that on and after the Closing Date it will
cause each of the Company and its Subsidiaries to honor, without offset,
deduction, counterclaims, interruptions or deferment (other than withholdings
under applicable law), all employment, severance, termination, consulting and
retirement agreements to which the Company or any of its Subsidiaries is
presently a party, as such agreements may hereafter be modified with the consent
of the other party or as otherwise permitted by such agreements and severance
policies of the Company and its Subsidiaries in effect on the date hereof.
Notwithstanding the immediately preceding sentence, Holdings shall assume and
discharge the obligations of the Company to provide retiree medical insurance
benefits to those persons who (i) are eligible for such benefits and (ii) have
retired from employment with the Company prior to the Closing Date.
(b) Subject to the other provisions of this Section 5.8,
employees of the Company and its Subsidiaries shall be employed after the
Closing Date subject to the Company's usual terms, conditions and policies of
employment, including, without limitation, all of the Company's policies
regarding modification of the terms and conditions of employees' employment.
Notwithstanding anything contained herein to the contrary, this Section 5.8
shall not create any obligation on the part of Company or any Subsidiary thereof
to employ or to continue the employment of any employees; provided, however,
Buyer agrees that on and after the Closing Date it will cause each of the
Company and its Subsidiaries to honor all employment and consulting agreements
to which the Company or any of its Subsidiaries is presently a party.
(c) Effective as of the Closing Date, the participation of
all employees of the Company, its Subsidiaries and their beneficiaries in the
Employee Benefit Plans will terminate and no further benefits shall accrue under
the Employee Benefit Plans with respect to any employees the Company and its
Subsidiaries or any beneficiary thereof. Holdings
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<PAGE> 26
shall take all such actions as may be necessary or appropriate to cause the
Company and its Subsidiaries to cease their participation and that of their
employees in the Company Plans as of the Closing Date.
(d) Prior to the Closing Date, Holdings, the Company and its
Subsidiaries shall take all such actions as may be necessary to (a) cause the
employees of the Company and its Subsidiaries to become fully vested in their
benefits under the Holdings Retirement and Profit Sharing Plan ("Holdings Profit
Sharing Plan"), and (b) make matching contributions with respect to the
employees' contributions made with respect to periods prior to the Closing Date
to the Holdings Profit Sharing Plan to the extent that such matching
contributions would be made if the employees were employed by the sponsors of
such plan on the last day of the calendar year in which the Closing Date
occurs. Such matching contributions shall be made to the Holdings Profit
Sharing Plan at the same time as matching contributions are made to the
Holdings Profit Sharing Plan with respect to other employees of Holdings
participating in the Plan.
(e) On and after the Closing Date, the Company and its
Subsidiaries shall make all vacation payments to or with respect to the
employees of the Company and its Subsidiaries allocable to employment prior to
the Closing Date (including any vacation pay earned but unpaid as of the Closing
Date and any "carryover" or "banked" vacation pay that had not been paid as of
the Closing Date). Holdings shall be liable for vacation payments to or with
respect to the employees of the Company and its Subsidiaries allocable to
employment prior to the Closing Date to the extent such vacation pay was not
accrued on the balance sheet(s) of the Company and its Subsidiaries on the
Closing Date.
(f) Holdings and Buyer shall take such further action
(before, at or after the Closing Date), if any, as reasonably may be necessary
or convenient to implement the intent of Buyer's and Holdings' agreements
contained in this Section 5.8. Holdings shall make available to Buyer such
information as Buyer may reasonably request to enable Buyer to determine such
matters relating to employment and salary histories for purposes of Employee
Benefit Plans.
(g) Holdings shall take all reasonable steps, at
Buyer's request, to assist Buyer in establishing employee benefit plans for
employees of Company or its Subsidiaries after the Closing Date including by
cooperating in negotiations with service providers under Employee Benefit Plans
to provide services to the Company's or its Subsidiaries' employee benefit
plans after the Closing Date.
(h) Holdings shall retain all liability, and hold harmless
Buyer, the Company, and their Subsidiaries, officers, directors, employees and
agents and each employee benefit plan maintained or contributed to by Company or
its Subsidiary thereof and its administrators, fiduciaries and agents, from and
against and in respect of any and all
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liabilities, arising out of or based upon or with respect to any Employee
Benefit Plan which is allocable to or incurred prior to the Closing Date,
regardless of whether payment therefore is due before or after the Closing
Date.
SECTION 5.9. Audit. Prior to the Closing, Holdings, at its sole cost
and expense, shall cause Ernst & Young LLP to conduct an audit of the
consolidated balance sheets of the Company as of December 31, 1995 and March
31, 1996 and the consolidated statements of income, stockholders' equity and
cash flows for the fiscal year ended December 31, 1995 and the three month
period ended March 31, 1996 (collectively, the "Audited Financial Statements").
Holdings will deliver to Buyer a copy of the Audited Financial Statements not
later than five business days prior to the Closing. At such time, Holdings
also shall deliver to Buyer a reconciliation, prepared in reasonable detail, of
the adjustments applied to the Financial Statements for the year ended December
31, 1995 and the three months ended March 31, 1996 delivered pursuant to
Section 3.7 in connection with the preparation of the Audited Financial
Statements.
SECTION 5.10. Net Worth of the Company. Holdings shall cause the
Company to have as of the Closing Date a net worth (i.e., total assets minus
total liabilities calculated in a manner consistent with the Financial
Statements as reflected in Section 3.7 of the Disclosure Schedule and based on
a cash balance of $0 and including the liabilities (to the extent not assumed
by Holdings pursuant to this Agreement) listed on Schedule 3.8 of the
Disclosure Schedule) at the Closing of not less than $41,464,000. The
calculation of the Company's net worth shall be set forth in a statement of net
worth (the "Closing Net Worth Statement") certified by the Chief Financial
Officer of Holdings and delivered at the Closing to Buyer as soon as
practicable following the Closing and in any event not later than 15 days
after the Closing Date. If Buyer contests the calculation of net worth set
forth on the Closing Net Worth Statement, Holdings shall retain Ernst & Young
LLP to review such calculation and to advise Buyer and Holdings as to their
determination, which shall be conclusive between the parties, of the Company's
net worth, based on the methodology set forth in this Section 5.10. Any
deficiency in net worth below $41,464,000, as determined by Holdings or Ernst &
Young LLP, as appropriate, shall be an adjustment to the Purchase Price and
shall be paid by Holdings to Buyer via wire transfer of immediately available
funds not later than three business days after the delivery of the Closing Net
Worth Statement. In the event Ernst & Young LLP shall determine that the net
worth of the Company exceeds the net worth reflected on the Closing Net Worth
Statement, the amount of such excess shall be an adjustment to the Purchase
Price and shall be paid by Buyer to Holdings via wire transfer of immediately
available funds not later than three business days after the delivery of Ernst
& Young LLP's calculation of net worth. The fees and expenses of Ernst & Young
LLP shall be the sole responsibility of Buyer, unless the determination of net
worth by Ernst & Young LLP results in an increased payment by Holdings, in
which case such fees and expenses shall be paid by Holdings.
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SECTION 5.11. Noncompetition; Nonsolicitation.
--------------------------------
(a) Prior to the fifth anniversary of the Closing Date,
neither Holdings nor any Subsidiary of Holdings shall manufacture, market or
sell the type of products manufactured, marketed and sold by the Company on the
Closing Date. Holdings acknowledges and agrees that the restrictions contained
in this Section 5.11 are fair and reasonable and necessary to accomplish the
full transfer of the goodwill and other intangible assets contemplated hereby.
If, at the time of enforcement of any provision of this Section 5.11, a court or
other tribunal shall hold that the restrictions therein are unreasonable or
unenforceable under circumstances then existing, Buyer and Holdings agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area.
(b) Holdings hereby agrees that, for a period commencing on
the Closing Date and ending on the third anniversary of the Closing Date, it
will not, without Buyer's prior written consent, directly or indirectly, solicit
or hire any current officer of the Company; provided, however, that nothing
herein shall prohibit Holdings or any of its Subsidiaries from (x) publishing a
general solicitation of employment in any newspaper, magazine or trade
publication or (y) from soliciting or hiring any person who was an officer of
the Company on the Closing Date but whose employment is terminated by the
Company.
SECTION 5.12. Acquisition Proposals. Neither Holdings nor the
Company shall, nor shall they authorize or permit any officer, director or
employee of, or any investment banker, attorney or other advisor or
representative of, Holdings or the Company to, directly or indirectly, (i)
solicit, initiate or encourage the submission of any Acquisition Proposal (as
hereinafter defined) or (ii) participate in any discussions or negotiations
regarding, or furnish to any person any information with respect to, or take
any other action to facilitate any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition
Proposal; provided, however, that notwithstanding the foregoing, Holdings or
the Company, or any officer, director or employee of, or any investment banker,
attorney or other advisor or representative of, Holdings or the Company may,
following the receipt of an Acquisition Proposal the Board of Directors of the
Company determines is superior to the transactions contemplated hereby from a
financial point of view to the Company's stockholders, furnish information to
such offeror and participate in negotiations regarding such Acquisition
Proposal. Notwithstanding anything in this Agreement to the contrary, the
Company shall promptly advise Buyer orally and in writing of the receipt by it
(or any of the other entities or persons referred to above) after the date
hereof of any Acquisition Proposal, or any inquiry which could lead to any
Acquisition Proposal, the material terms and conditions of such Acquisition
Proposal or inquiry, and the identity of the person making any such Acquisition
Proposal or inquiry. The Company will keep Buyer fully informed of the status
and details of any such Acquisition Proposal or inquiry. For purposes of this
Agreement, "Acquisition Proposal" means any proposal with
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respect to a merger, consolidation, share exchange or similar transaction
involving the Company or any Subsidiary of the Company, or any purchase of all
or any significant portion of the assets of the Company or any Subsidiary of
the Company, or any equity interest in the Company or any Subsidiary of the
Company, other than the transactions contemplated hereby.
SECTION 5.13. Termination Fee. (a) The Company shall pay to Buyer
upon demand $5 million plus Buyer's Expenses (as hereinafter defined) (such
payment and Expenses in no event to exceed $7 million in the aggregate),
payable in same-day funds, if Holdings or the Company terminates this Agreement
pursuant to Section 9.1(d). For purposes of this Section 5.13, "Expenses"
shall mean all documented out-of-pocket fees and expenses incurred or paid by
or on behalf of Buyer or Holdings, as applicable, to third parties in
connection with this Agreement or the consummation of the transactions
contemplated by this Agreement, including all reasonable fees and expenses of
counsel, accountants, experts and consultants.
(b) In the event that Buyer breaches this Agreement by
failing to close the transactions contemplated by this Agreement, Buyer shall
pay to Holdings upon demand $5 million plus Holdings' Expenses (such payment and
Expenses in no event to exceed $7 million in the aggregate) payable in same-day
funds.
SECTION 5.14. Transition Services. Holdings shall provide to the
Company and its Subsidiaries following the Closing such transition services as
reasonably requested by Buyer. Buyer shall reimburse Holdings for the cost to
Holdings of providing such services. Buyer shall provide to Holdings following
the Closing such transition services as reasonably requested by Holdings.
Holdings shall reimburse Buyer for the cost to Buyer of providing such
services. Holdings and the Company shall enter into transition services
agreements at Closing with respect to the foregoing (the "Transition Services
Agreements").
ARTICLE VI
CLOSING CONDITIONS
------------------
SECTION 6.1. Conditions to Each Party's Obligations under this
Agreement. The respective obligations of each party under this Agreement shall
be subject to the fulfillment at or prior to the Closing of the following
conditions:
(a) Any waiting period applicable to the consummation of
the transactions contemplated hereby under the HSR Act shall have expired or
been terminated; and
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(b) No injunction, restraining order or other ruling or
order issued by any court of competent jurisdiction or Governmental Authority or
other legal restraint or prohibition preventing the consummation of the
transactions contemplated hereby shall be in effect.
SECTION 6.2. Conditions to the Obligations of Buyer under this
Agreement. The obligations of Buyer under this Agreement shall be further
subject to the satisfaction, at or prior to the Closing, of the following
conditions:
(a) Each of the obligations of Holdings and the Company
required to be performed by them at or prior to the Closing pursuant to this
Agreement shall have been duly performed and complied with in all material
respects, and the representations and warranties of Holdings contained in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing as though made at and as of the Closing
(except as to any representation or warranty which specifically relates to an
earlier date), and Buyer shall have received a certificate to that effect signed
by an officer of Holdings;
(b) Any and all permits, consents, waivers, clearances,
approvals and authorizations of all third parties and Governmental Authorities
which are necessary or advisable in connection with the consummation of the
transactions contemplated hereby shall have been obtained, other than items
which, if not obtained, would not have a Material Adverse Effect; and
(c) Buyer shall have received an opinion substantially to
the effect of Exhibit A hereto from Weil, Gotshal & Manges LLP, counsel to
Holdings.
(d) Buyer shall have received a copy of the fairness
opinion, addressed to the board of directors of Holdings, delivered by Gleacher
NatWest, Inc. in connection with the transactions contemplated by this
Agreement.
SECTION 6.3. Conditions to the Obligations of Holdings under this
Agreement. The obligations of Holdings under this Agreement shall be further
subject to the satisfaction, at or prior to the Closing, of the following
conditions:
(a) Each of the obligations of Buyer required to be
performed by it at or prior to the Closing pursuant to the terms of this
Agreement shall have been duly performed and complied with in all material
respects, and the representations and warranties of Buyer contained in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Closing Date as though made at and as of the
Closing Date (except as to any representation or warranty which specifically
relates to an earlier date), and Holdings shall have received a certificate to
that effect signed by an officer of Buyer;
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(b) Any and all permits, consents, waivers, clearances,
approvals and authorizations of all Governmental Authorities which are necessary
in connection with the consummation of the transactions contemplated hereby
shall have been obtained, other than items which, if not obtained, would not
have a Material Adverse Effect; and
(c) Holdings shall have received opinions substantially to
the effect of Exhibit B-1 and B-2 hereto from (x) Haight, Gardner, Poor &
Havens, New York counsel to Buyer, and (y) special Danish counsel to Buyer.
ARTICLE VII
CLOSING
-------
SECTION 7.1. Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Thermadyne
Holdings Corporation, 101 S. Hanley Road, St. Louis, Missouri 63105, subject to
the satisfaction or waiver of the conditions set forth in Article VI, as soon
as practicable after the date hereof and in any event not later than June 30,
1996, or at such other time and place and on such other date as Buyer and
Holdings shall agree (the "Closing Date"). At the Closing:
(a) Holdings shall deliver or cause to be delivered to
Buyer the following:
(i) the certificate described in Section 6.2(a);
(ii) a certificate or certificates representing
all of the Shares in appropriate form for transfer to Buyer duly
endorsed in blank or accompanied by stock powers duly executed in
blank;
(iii) all documents, including without limitation,
executed UCC-3 termination statements, as are necessary to release all
liens on the Company's assets, the Shares and the capital stock and
assets of the Company's Subsidiaries which secure the Senior Debt;
(iv) resignations of directors of the Company and
each Subsidiary; and
(v) all other previously undelivered documents
required or reasonably requested to be delivered by Holdings to Buyer
at or prior to the Closing pursuant to the terms of this Agreement.
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(b) Buyer shall deliver or cause to be delivered to Holdings
the following:
(i) the certificate described in Section 6.3(a);
and
(ii) all other previously undelivered documents
required or reasonably requested to be delivered by Buyer to Holdings
at or prior to the Closing pursuant to the terms of this Agreement.
(c) Buyer shall pay to Holdings, by wire transfer of
immediately available funds, the Purchase Price.
ARTICLE VIII
SURVIVAL AND INDEMNIFICATION
----------------------------
SECTION 8.1. Survival of Representations, Warranties and Covenants.
(a) Except as to (i) the representations and warranties contained in Section
3.20, which shall survive the Closing until the expiration of four years from
the Closing Date, and (ii) the representations and warranties contained in
Section 3.14, which shall survive the Closing until the expiration of the last
day on which any Tax may be validly assessed by the Internal Revenue Service or
any other Governmental Authority against the Company, the representations and
warranties of Holdings and of Buyer contained in this Agreement shall survive
the Closing until the expiration of eighteen months from the Closing Date. Any
claim for indemnification with respect to any of such matters which is not
asserted by notice given as herein provided relating thereto within such
specified period of survival may not be pursued and is hereby irrevocably
waived after such time. Any claim for an Indemnifiable Loss (as defined in
Section 8.2) asserted within such period of survival as herein provided will be
timely made for purposes hereof.
(b) Unless a specified period is set forth in this Agreement
(in which event such specified period will control), the covenants in this
Agreement will survive the Closing and remain in effect indefinitely.
SECTION 8.2. Limitations on Liability. (a) For purposes of this
Agreement, (i) "Indemnity Payment" means any amount of Indemnifiable Losses
required to be paid pursuant to this Agreement, (ii) "Indemnitee" means any
person or entity entitled to indemnification under this Agreement, (iii)
"Indemnifying Party" means any person or entity required to provide
indemnification under this Agreement, (iv) "Indemnifiable Losses" means any and
all damages, losses, liabilities, obligations, costs and expenses, and any and
all claims, demands or suits (by any person or entity, including without
limitation any Governmental Authority), including without limitation the costs
and expenses of any and all
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actions, suits, proceedings, demands, assessments, judgments, settlements and
compromises relating thereto and including reasonable attorneys' fees and
expenses in connection therewith, and (v) "Third Party Claim" means any claim,
action or proceeding made or brought by any person or entity who or which is
not a party to this Agreement or an affiliate of a party to this Agreement.
(b) Notwithstanding any other provision hereof or of any
applicable Law, (i) no Indemnitee will be entitled to make a claim against an
Indemnifying Party in respect of any breach of a representation or warranty
under Sections 8.3(a)(i) or 8.3(b)(i) unless and until the aggregate amount of
claims in respect of breaches of representations and warranties asserted for
Indemnifiable Losses under 8.3(a)(i) or 8.3(b)(i), as applicable, exceeds
$500,000 (the "Deductible"), in which event the Indemnitee will be entitled to
make a claim against the Indemnifying Party only to the extent the amount of
Indemnifiable Losses exceeds such Deductible and (ii) (A) cumulative
indemnification for Indemnifiable Losses arising from the representations and
warranties contained in Section 3.20 together with Indemnifiable Losses arising
under Section 8.3(a)(vii), shall in no event exceed $30 million, (B)
indemnification for Indemnifiable Losses arising from the representations and
warranties contained in Section 3.4 shall in no event exceed the Purchase Price
(without giving effect to Section 8.5), and (C) cumulative indemnification for
Indemnifiable Losses arising from all other representations and warranties
contained in Article III hereof shall in no event exceed $15 million in the
aggregate, provided further that in no event shall the cumulative
indemnification provided by Holdings arising from all breaches of
representations and warranties under Article III of this Agreement (whether in
tort, contract or otherwise) exceed the Purchase Price (but without giving
effect to Section 8.5). Nothing herein shall be construed to limit the
cumulative indemnification provided by Holdings under Sections 8.3(a)(iii),
(iv), (v), (vi) and (vii).
SECTION 8.3. Indemnification. (a) Subject to Sections 8.1 and 8.2,
Holdings agrees to indemnify, defend and hold harmless Buyer and its affiliates
and their respective directors, officers, partners, employees, agents and
representatives from and against any and all Indemnifiable Losses to the extent
relating to, resulting from or arising out of:
(i) any breach of representation or warranty of
Holdings under the terms of this Agreement;
(ii) any breach or nonfulfillment of any
agreement or covenant of Holdings under the terms of this Agreement;
(iii) the pending or threatened litigation,
including workers' compensation matters, listed in Section 3.10 of the
Disclosure Schedule;
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(iv) any product liability claims against the
Company or its Subsidiaries pending on the Closing Date or arising
from injuries prior to the Closing Date but not yet reported as of
such date;
(v) any liabilities arising out of labor and
employment practices, including liabilities under Employee Benefit
Plans of the Company or its Subsidiaries prior to the Closing Date;
(vi) subject to Section 8.3(c), any unpaid Taxes
with respect to any taxable period of the Company ending on or before
the Closing Date to the extent such unpaid Taxes exceed accruals for
Taxes in the Closing Net Worth Statement;
(vii) any liabilities arising under Environmental
Laws by the Company and its Subsidiaries prior to the Closing as well
as any claims made under or pursuant to Environmental Laws resulting
from or relating to any Release of Hazardous Materials by the Company
or its Subsidiaries or the operations thereof if such Release
commenced or occurred prior to the Closing (but was not materially
exacerbated by the Company or its Subsidiaries after the Closing);
provided, however, Seller shall have no obligation hereunder for any
costs incurred by the Buyer, the Company or any Subsidiary that were
not reasonably necessary to satisfy or settle obligations under
Environmental Laws or to obtain regulatory approval thereunder;
provided further, that (x) in no event may any claim first be asserted
by Buyer pursuant to this paragraph 8.3(vii) subsequent to the fourth
anniversary of the Closing and (y) such indemnification (collectively
with any indemnification arising in respect of Section 3.20 pursuant
to paragraph 8.3(i) above) shall in no event exceed $30 million in the
aggregate.
(b) Buyer agrees to indemnify, defend and hold harmless
Holdings and its affiliates and their respective directors, officers, partners,
employees, agents or representatives from and against any and all Indemnifiable
Losses to the extent relating to, resulting from or arising out of:
(i) any breach of representation or warranty of
Buyer under the terms of this Agreement; and
(ii) any breach or nonfulfillment of any
agreement or covenant of Buyer under the terms of this Agreement.
(c) If requested by Buyer, Holdings agrees to negotiate in
good faith regarding whether to file an election under Section 338(h)(10) of
the Code and under any comparable provisions of state, local, or foreign Law
with respect to the purchase of the Shares (collectively, the "Election") and
the Tax consequence of the Election. In the event
29
<PAGE> 35
that the Election is made, Buyer agrees to pay and to indemnify Holdings from
and against (prior to the due date for making payment of such Taxes to the
applicable taxing authority) the Election Tax Liability. The term "Election
Tax Liability" shall mean the liability of Holdings and the Company for Taxes
arising as a consequence of the Election (including interest, penalties and
costs and expenses) in taxable periods of the Company ending on or before the
Closing Date; provided, however, that for purposes of Buyer's obligations
hereunder, the Election Tax Liability shall not exceed $6,000,000. In addition
to the foregoing, Buyer agrees to indemnify, defend and hold harmless Holdings
and its affiliates and their respective directors, officers, partners,
employees and agents or representatives from and against any and all
Indemnifiable Losses to the extent relating to, resulting from or arising out
of any Taxes due, or which become due, and payable and accrued in the
Closing Net Worth Statement.
SECTION 8.4. Defense of Claims. (a) If any Indemnitee receives
notice of assertion or commencement of any Third Party Claim against such
Indemnitee with respect to which an Indemnifying Party is obligated to provide
indemnification under this Agreement, the Indemnitee will give such
Indemnifying Party reasonably prompt written notice thereof, but in any event
not later than 30 calendar days after receipt of such notice of such Third
Party Claim. Such notice will describe the Third Party Claim in reasonable
detail, will include copies of all material written evidence thereof and will
indicate the estimated amount, if reasonably practicable, of the Indemnifiable
Loss that has been or may be sustained by the Indemnitee. The Indemnifying
Party will have the right to participate in, or, by giving written notice to
the Indemnitee, to assume, the defense of any Third Party Claim at such
Indemnifying Party's own expenses and by such Indemnifying Party's own counsel
(reasonably satisfactory to the Indemnitee), and the Indemnitee will cooperate
in good faith in such defense.
(b) If, within ten calendar days after giving notice of a
Third Party Claim to an Indemnifying Party pursuant to Section 8.4(a), an
Indemnitee receives written notice from the Indemnifying Party that the
Indemnifying Party has elected to assume the defense of such Third Party Claim
as provided in the last sentence of Section 8.4(a), the Indemnifying Party will
not be liable for any legal expenses subsequently incurred by the Indemnitee in
connection with the defense thereof; provided, however, that if the
Indemnifying Party fails to take reasonable steps necessary to defend
diligently such Third Party Claim within ten calendar days after receiving
written notice from the Indemnitee or if the Indemnifying Party has not
undertaken fully to indemnify the Indemnitee in respect of all Indemnifiable
Losses relating to the matter, the Indemnitee may assume its own defense, and
the Indemnifying Party will be liable for all reasonable costs or expenses paid
or incurred in connection therewith. The Indemnifying Party will not enter
into any settlement of any Third Party Claim without the prior written consent
of the Indemnitee, which consent shall not be unreasonably withheld. If a firm
offer is made to settle a Third Party Claim without leading to liability or the
creation of a financial or other obligation on the part of the Indemnitee for
30
<PAGE> 36
which the Indemnitee is not entitled to indemnification hereunder or any other
Material Adverse Effect on the Company and the Indemnifying Party desires to
accept and agree to such offer, the Indemnifying Party will give written notice
to the Indemnitee to that effect. If the Indemnitee fails to consent to such
firm offer within ten calendar days after its receipt of such notice, the
Indemnitee may continue to contest or defend such Third Party Claim and, in
such event, the maximum liability of the Indemnifying Party as to such Third
Party Claim will not exceed the amount of such settlement offer, plus costs and
expenses paid or incurred by the Indemnitee through the end of such ten
calendar day period.
(c) A failure to give timely notice or to include any
specified information in any notice as provided in Sections 8.4(a) or 8.4(b)
will not affect the rights or obligations of any party hereunder except and
only to the extent that, as a result of such failure, any party which was
entitled to receive such notice was deprived of its right to recover any
payment under its applicable insurance coverage or was otherwise damaged as a
result of such failure.
(d) The Indemnifying Party will have a period of 30 calendar
days within which to respond in writing to any claim by an Indemnitee on
account of an Indemnifiable Loss which does not result from a Third Party Claim
(a "Direct Claim"). If the Indemnifying Party does not so respond within such
30 calendar day period, the Indemnifying Party will be deemed to have rejected
such claim, in which event the Indemnitee will be free to pursue such remedies
as may be available to the Indemnitee on the terms and subject to the
provisions of this Article VIII.
(e) If the amount of any Indemnifiable Loss, at any time
subsequent to the making of an Indemnity Payment, is reduced by recovery,
settlement or otherwise under or pursuant to any insurance coverage, or
pursuant to any claim, recovery, settlement or payment by or against any other
entity, the amount of such reduction, less any costs, expenses, premiums or
taxes incurred in connection therewith will promptly be repaid by the
Indemnitee to the Indemnifying Party. Upon making any Indemnity Payment the
Indemnifying Party will, to the extent of such Indemnity Payment, be subrogated
to all rights of the Indemnitee against any third party that is not an
affiliate of the Indemnitee in respect of the Indemnifiable Loss to which the
Indemnity Payment related; provided, however, that (i) the Indemnifying Party
shall then be in compliance with its obligations under this Agreement in
respect of such Indemnifiable Loss and (ii) until the Indemnitee recovers fully
payment of its Indemnifiable Loss, any and all claims of the Indemnifying Party
against any such third party on account of said Indemnity Payment will be
subrogated and subordinated in right of payment to the Indemnitee's rights
against such third party. Without limiting the generality or effect of any
other provision hereof, each such Indemnitee and Indemnifying Party will duly
execute upon request all instruments reasonably necessary to evidence and
perfect the above-described subrogation and subordination rights.
31
<PAGE> 37
(f) With respect to a Third Party Claim for which Holdings
is the Indemnifying Party, Buyer shall, and shall cause each Indemnitee to,
make available to Holdings and its representatives all books and records of
Buyer and the Indemnitees relating to such Third Party Claim and shall render
to Holdings such assistance and access to records and the representatives of
Buyer and the Indemnitees as Holdings and its representatives may reasonably
request, except that Buyer shall not be required to make available to Holdings
and its representatives any books, records, documents or other information that
Buyer reasonably determines to be confidential or subject to attorney-client
privilege unless and until Holdings shall have entered into such agreements as
Buyer reasonably deem to be necessary in light of all surrounding circumstances
(including, without limitation, Holdings' need for information in connection
with the investigation or defense of a Third Party Claim) to protect such
confidentiality or privilege.
(g) Holdings shall not be entitled to contribution from,
subrogation to or recovery against the Company or any Subsidiary with respect
to any liability of Holdings that may arise under or pursuant to this Agreement
or the transactions contemplated hereby.
SECTION 8.5. Adjustment to Purchase Price. Buyer and Holdings agree
that any Indemnity Payment hereunder shall be treated as an adjustment to the
Purchase Price. The amount of an Indemnified Loss shall be reduced by (or the
Indemnified Party shall pay to the Indemnifying Party) any Tax benefits
actually realized by the Indemnified Party or its affiliates which are
attributable to the Indemnifiable Loss (including, without limitation, any Tax
benefits arising from the payment or accrual of the Indemnified Loss or any
correlative offsetting Tax benefit realized in a taxable period or periods
subsequent to the period in which a deficiency for Taxes arises) (an
"Offsetting Tax Benefit"). In the event that the Company or its affiliates
realizes an Offsetting Tax Benefit with respect to a deficiency in Taxes
arising in a consolidated or combined Tax Return filed by Holdings, Buyer shall
pay the amount of such Offsetting Tax Benefit to Holdings promptly after
realizing such Offsetting Tax Benefit.
SECTION 8.6. Exclusive Remedy. Buyer and Holdings agree that, to the
fullest extent permitted by law, the sole and exclusive remedy of Buyer and
Holdings after the Closing with respect to any claim or cause of action
asserted by Buyer or Holdings relating to or arising from breaches of the
representations, warranties or covenants of the other party contained in this
Agreement or any document, list, schedule, exhibit, certificate or other
instrument furnished or to be furnished by or on behalf of such other party or
any of its representatives in connection with the transactions contemplated by
this Agreement shall be limited to the rights of Buyer and Holdings under, and
shall be subject to the terms and conditions of, this Article VIII.
SECTION 8.7. Hold Harmless; No Contribution. Notwithstanding the
expiration of Holdings' obligation to indemnify or defend Buyer under Section
8.1 hereof, Holdings' hold
32
<PAGE> 38
harmless obligations with respect to matters addressed in Sections 3.20 and
8.3(a)(vii) hereof shall survive the Closing and remain in effect indefinitely.
After the fourth anniversary of the Closing Date, Buyer and its affiliates
shall hold harmless Holdings for all liabilities under Environmental Laws.
ARTICLE IX
TERMINATION AND ABANDONMENT
---------------------------
SECTION 9.1. Termination. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by mutual consent of Holdings and Buyer;
(b) by either Holdings or Buyer:
(i) if a court of competent jurisdiction
or Governmental Authority shall have issued an order, decree or ruling
or taken any other action (which order, decree or ruling the parties
hereto shall use their best efforts to lift), in each case permanently
restraining, enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, and such order, decree, ruling or
other action shall have become final and nonappealable; or
(ii) if the Closing shall not have
occurred on or before July 31, 1996; provided, however, that (A)
Holdings shall have the right, in its sole discretion, to extend the
time period in this Section 9.1(b)(ii) an additional sixty days and
(B) the right to terminate this Agreement shall not be available to
any party whose breach of this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before such
date; or
(iii) if a material default or breach
shall be made by the other with respect to the due and timely
performance of any of its covenants or agreements contained herein, or
in any of its representations or warranties contained in the
Agreement, if such default or breach has not been cured or waived
within 30 days (or, if such material breach or default shall first be
discovered by the party entitled to assert such breach or default on
or after June 1, 1996, then by June 30, 1996) after written notice to
the other specifying, in reasonable detail, such claimed material
default or breach and demanding its cure or satisfaction.
(c) if the final reports of the Phase I and/or Phase II
environmental audit conducted by Buyer disclose any condition not previously
addressed in Section 3.20 of the Disclosure Schedule or disclose new
information as to matters which are addressed in Section 3.20 of the
33
<PAGE> 39
Disclosure Schedule, (x) by Holdings if such conditions or new information is
stated in such environmental audit(s) to have an expected cost of clean-up
remediation and/or monitoring and testing (collectively, "Remediation Costs")
of $10 million or more, (y) by Holdings or, if Holdings shall not agree to
escrow that portion of the Purchase Price equal to the expected Remediation
Costs, by Buyer if such expected Remediation Costs exceed $15 million but are
less than $25 million or (z) by Holdings or Buyer if the expected Remediation
Costs exceed $25 million; or
(d) subject to Section 5.13, by Holdings or the Company if
a superior Acquisition Proposal is accepted.
SECTION 9.2. Procedure and Effect of Termination. In the event of
termination and abandonment of the transactions contemplated hereby pursuant to
Section 9.1, written notice thereof shall forthwith be given to the other
parties to this Agreement and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
any of the parties hereto. If this Agreement is terminated as provided herein:
(a) upon request therefor, each party will redeliver all
documents, work papers and other material of any other party relating to the
transactions contemplated hereby, whether obtained before or after the
execution hereof, to the party furnishing the same; and
(b) no party hereto shall have any liability or further
obligation to any other party to this Agreement resulting from such termination
except (i) that the provisions of this Section 9.2 and the proviso of Section
9.1(b)(ii) shall remain in full force and effect and (ii) no party waives any
claim or right against a breaching party to the extent that such termination
results from the breach by a party hereto of any of its representations,
warranties, covenants or agreements set forth in this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
------------------------
SECTION 10.1. Amendment and Modification. This Agreement may be
amended, modified or supplemented by a written instrument signed by the parties
hereto.
SECTION 10.2. Waiver of Compliance; Consents. Any failure of Buyer,
on the one hand, or of Holdings or the Company, on the other hand, to comply
with any obligation, covenant, agreement or condition contained herein may be
waived in writing by Holdings or Buyer, respectively, but such waiver or
failure to insist upon strict compliance with such
34
<PAGE> 40
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any other failure.
SECTION 10.3. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provisions of this Agreement, which shall remain in full force and
effect.
SECTION 10.4. Expenses and Obligations. All costs and expenses
incurred in connection with the consummation of the transactions contemplated
by this Agreement by Buyer shall be paid by Buyer, and all costs and expenses
incurred in connection with the consummation of the transactions contemplated
by this Agreement by Holdings or the Company (including transfer taxes, if any,
with respect to the sale of the Shares) shall be paid by Holdings.
SECTION 10.5. Parties in Interest. This Agreement shall be binding
upon and, except as provided below, inure solely to the benefit of each party
hereto, and nothing in this Agreement, except as set forth below, express or
implied, is intended to confer upon any other person any rights or remedies of
any nature whatsoever under or by reason of this Agreement.
SECTION 10.6. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given upon the earlier of
delivery thereof if by hand or upon receipt if sent by mail (registered or
certified, postage prepaid, return receipt requested) or on the second next
business day after deposit if sent by a recognized overnight delivery service
or upon transmission if sent by telecopy or facsimile transmission (with
request of assurance of receipt in a manner customary for communication of such
type) as follows:
(a) If to Buyer, to:
Incentive A/S
Kongens Nytorv 28
P.O. Box 2064
DK-1013 Copenhagen K
Attention: Eric Rylberg
Facsimile No.: 45-33-93-46-36
35
<PAGE> 41
with a copy to:
Haight, Gardner, Poor & Havens
195 Broadway
New York, New York 10007
Attention: Mark A. Saunders
Facsimile No.: (212) 385-9010
(b) If to Holdings or the Company, to:
Thermadyne Holdings Corporation
101 South Hanley Road
St. Louis, Missouri 63105
Attention: James H. Tate
Stephanie N. Josephson
Facsimile No.: (314) 746-2374
with a copy to:
Weil, Gotshal & Manges LLP
100 Crescent Court, Suite 1300
Dallas, Texas 75201
Attention: R. Scott Cohen
Facsimile No.: (214) 746-7777
SECTION 10.7. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to the conflicts-of-laws rules thereof.
SECTION 10.8. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
SECTION 10.9. Headings. The article and section headings contained
in this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 10.10. Entire Agreement. This Agreement and the Disclosure
Schedule embody the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein or therein. There are no
agreements, representations, warranties or covenants other than those expressly
set forth herein or therein. This Agreement and the
36
<PAGE> 42
Disclosure Schedule supersede all prior agreements and understandings between
the parties with respect to such subject matter.
SECTION 10.11. Assignment. This Agreement shall not be assigned by
operation of law or otherwise. Notwithstanding the foregoing, Buyer may assign
its rights and obligations under this Agreement to an affiliate; provided,
however, in no event shall the assignment of this Agreement relieve Buyer of
its obligations hereunder.
SECTION 10.12. Specific Performance. In addition to any other
remedies which Buyer may have at law or in equity, Holdings hereby acknowledges
that the Shares of the Company and the Subsidiaries are unique, and that the
harm to Buyer resulting from a breach by Holdings of its obligation to sell the
Shares to Buyer cannot be adequately compensated by damages. Accordingly,
Holdings agrees that Buyer shall have the right to have this Agreement
specifically performed by Holdings.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
37
<PAGE> 43
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed on its behalf by its duly authorized officers, all as of
the day and year first above written.
INCENTIVE A/S
By: /s/ ERIC RYLBERG
-----------------------------------
Name: Eric Rylberg
Title: Executive Vice President
By: /s/ PETER FRIIS
-----------------------------------
Name: Peter Friis
Title: Power of Attorney
THERMADYNE HOLDINGS CORPORATION
By: /s/ RANDALL E. CURRAN
-----------------------------------
Name: Randall E. Curran
Title: Chairman, President and CEO
CLARKE HOLDING CORPORATION
By: /s/ RANDALL E. CURRAN
------------------------------------
Name: Randall E. Curran
Title: Chairman and CEO
38
<PAGE> 1
EXHIBIT 2.2
AMENDMENT TO STOCK PURCHASE AGREEMENT
This Amendment to the Stock Purchase Agreement, dated April
19, 1996, by and among Holdings, the Company and Buyer (the "Agreement"), is
entered into this 27th day of June, 1996, by and among Holdings, the Company,
and Clarke Cleaning Equipment Corporation, a Delaware corporation and a wholly
owned subsidiary of Buyer ("Clarke").
R E C I T A L S:
WHEREAS, capitalized terms used in this Amendment, but not
defined herein, shall have the respective meanings ascribed to them in the
Agreement;
WHEREAS, Buyer, pursuant to Section 10.11 of the Agreement,
has assigned its rights and delegated its obligations under the Agreement to
Clarke; and
WHEREAS, Holdings, the Company, and Clarke desire to amend the
Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and the
promises hereinafter set forth, the parties hereto agree as follows:
1. Section 8.3(c) of the Agreement shall be amended and
restated to read in its entirety as follows:
"Clarke and Holdings shall each file an election under Section
338(h)(10) of the Code and under any comparable provisions of
state, local and foreign Law with respect to the purchase of
the Shares (collectively "the Election") and the Tax
Consequence of the Election. Clarke agrees to pay and to
indemnify Holdings from and against (prior to the due date for
making payment of such Taxes to the applicable taxing
authority) the Election Tax Liability. The term "Election Tax
Liability" shall mean the liability of Holdings and the Company
for Taxes arising as a consequence of the Election (including
interest, penalties, and costs and expenses) in taxable periods
of the Company ending on or before the Closing Date; provided,
however, that for purposes of Clarke's obligations hereunder,
the Election Tax Liability shall not exceed $7,500,000. In
<PAGE> 2
addition to the foregoing, Buyer agrees to indemnify, defend
and hold harmless Holdings and its affiliates and their
respective directors, officers, partners, employees and agents
or representatives from and against any and all Indemnifiable
Losses to the extent relating to, resulting from or arising out
of any Taxes due, or which become due, and payable and accrued
in the Closing Net Worth Statement; provided, however, that in
no event shall the total liability of Buyer for Election Tax
Liability be increased by operation of the indemnity
provisions of this sentence or otherwise to an amount in excess
of $7,500,000."
2. A new Section 10.13 shall be added to the Agreement,
to read in its entirety as follows:
"Section 10.13 Certain Obligations of Holdings. Notwithstanding
any other provision of this Agreement to the contrary, Holdings
shall indemnify and hold harmless Buyer, the Company and
Clarke, on a dollar-for-dollar basis, for (i) all documented
out-of-pocket expenses incurred by the Company and its
subsidiaries in connection with the installation of
Underwriters Laboratories' approved ground clamps to the body
of the high temperature limit switch in Delco or private brand
label hot water electric pressure washers manufactured and
shipped on or prior to June 10, 1996, by Clarke Industries,
Inc. ("Clarke Industries") or any of its subsidiaries, or the
respective predecessor corporations of any such company, and
all matters reasonably related thereto, and (ii) all
Indemnifiable Losses based upon, related to or arising from (a)
any product liability damage caused by any short in the housing
of the high temperature limit switch of any such pressure
washer which has not had such ground clamps installed, (b)
Clarke Bodenreinigungsgerate GmbH, (c) the failure of Holdings
to obtain the written consent of the landlord to the sublease,
dated June 27, 1996, by and between Thermadyne Industries, Inc.
and Clarke Industries with respect to certain premises located
at 101 South Hanley Road, St. Louis, Missouri, and (d) the
failure by Thermadyne Industries Limited to obtain the written
consent of the landlord to
-2-
<PAGE> 3
the sublease of certain premises in Europa Building, Chorley
North Industrial Park, Chorley, England, to Clarke Cleaning
Equipment (Europe) Limited. In addition, within fifteen days
after June 27, 1996, Holdings shall file Sales Tax Form ST 915
with the State of Ohio Department of Taxation."
3. The Agreement, as amended hereinabove, shall remain in
full force and effect in accordance with its terms.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment to be signed on its behalf by its duly authorized officers, all as of
the date and year first above written.
THERMADYNE HOLDINGS CORPORATION
By: /s/ James H. Tate
------------------------------
Name: James H. Tate
Title: Senior Vice President
and Chief Financial Officer
CLARKE CLEANING EQUIPMENT
CORPORATION
By: /s/ Azel Lejrskov
------------------------------
Name: Axel Lejrskov
Title: Chairman of the Board
By: /s/ Eric Soe Rylberg
------------------------------
Name: Eric Soe Rylberg
Title: President
CLARKE HOLDING CORPORATION
By: /s/ James H. Tate
------------------------------
Name: James H. Tate
Title: Senior Vice Presdident
and Chief Financial Officer
-3-
<PAGE> 1
EXHIBIT 2.3
- --------------------------------------------------------------------------------
AMENDED AND RESTATED CREDIT AGREEMENT
among
THERMADYNE HOLDINGS CORPORATION,
VARIOUS LENDING INSTITUTIONS,
and
BANKERS TRUST COMPANY,
AS AGENT
$250,000,000
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1. Amount and Terms of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Minimum Borrowing Amounts, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.03 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.04 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.05 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.06 Conversions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.07 Pro Rata Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.08 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.09 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.10 Increased Costs, Illegality, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.11 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
1.12 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1.13 Replacement of Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.01 Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.02 Letter of Credit Requests; Notices of Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.03 Agreement to Repay Letter of Credit Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.04 Letter of Credit Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.05 Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3. Fees; Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.01 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.02 Voluntary Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.03 Mandatory Adjustments of Commitments, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 4. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.01 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.02 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
4.03 Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.04 Net Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5. Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.01 Conditions Precedent to the Restatement Effective Date . . . . . . . . . . . . . . . . . . . . . . . . 24
5.02 Conditions Precedent to Each Credit Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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SECTION 6. Representations, Warranties and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.01 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.02 Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.03 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.04 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.05 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.06 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.07 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.08 Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.09 True and Complete Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.10 Financial Condition; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.11 Security Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.12 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.13 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.14 Ownership; Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.15 Intellectual Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.16 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.17 Real Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.18 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.19 Subordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6.20 Ownership of Foreign Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6.21 Existing Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.01 Information Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.02 Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.03 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.04 Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
7.05 Corporate Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.06 Compliance with Laws, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.07 Good Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.08 Compliance with Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
7.09 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
7.10 End of Fiscal Years; Fiscal Quarters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.11 Additional Security; Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7.12 Real Estate Leases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.13 Annual Bank Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
7.14 Clarke Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.15 Security Trust Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
7.16 Compliance with Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
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SECTION 8. Negative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.01 Changes in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.02 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
8.03 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
8.04 Consolidations, Mergers and Disposition of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 51
8.05 Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
8.06 Limitations on Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.07 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.08 Amendment or Termination of Certain Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.09 Taxes of Other Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.10 Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
8.11 Issuance and Disposition of Capital Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.12 Foreign Deposit Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.13 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.14 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.15 Minimum Consolidated Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.16 Maximum Consolidated Funded Indebtedness to
Consolidated EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.17 Minimum Interest Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 9. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.01 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.02 Representations, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
9.03 Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.04 Default Under Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.05 Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
9.06 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.07 Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
9.08 Subsidiary Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.09 Judgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.10 Material Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 10. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 11. The Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.01 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.02 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
11.03 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.04 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
11.05 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
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11.06 Non-Reliance on Agent, and Other Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.07 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
11.08 Agent in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.09 Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
11.10 Resignation of the Agent; Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 12. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
12.01 Payment of Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
12.02 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
12.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
12.04 Benefit of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
12.05 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
12.06 Payments Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
12.07 Calculations; Computations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
12.08 Governing Law; Submission to Jurisdiction; Venue . . . . . . . . . . . . . . . . . . . . . . . . . . 93
12.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
12.10 Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
12.11 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
12.12 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
12.13 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
12.14 Domicile of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
12.15 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
12.16 Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
12.17 Clarke Sale Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
</TABLE>
ANNEX I List of Banks
ANNEX II Bank Addresses
ANNEX III Existing Letters of Credit
ANNEX IV Insurance Policies
ANNEX V Subsidiaries
ANNEX VI Real Properties
ANNEX VII Liens
ANNEX VIII Existing Indebtedness
ANNEX IX Clarke Sale
ANNEX X Litigation
ANNEX XI ERISA Matters
ANNEX XII Subordination Provisions
ANNEX XIII Dispositions of Properties
ANNEX XIV Foreign Assets
ANNEX XV Tax Matters
(iv)
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EXHIBIT A-1 -- Form of Notice of Borrowing
EXHIBIT A-2 -- Form of Letter of Credit Request
EXHIBIT B-1 -- Form of Revolving Note
EXHIBIT B-2 -- Form of Swingline Note
EXHIBIT C -- Form of Section 4.02(b)(ii) Certificate
EXHIBIT D-1 -- Form of Opinion of Weil, Gotshal & Manges
EXHIBIT D-2 -- Form of Opinion of Stephanie Josephson,
General Counsel of the Borrower
EXHIBIT D-3 -- Form of Opinion of White & Case
EXHIBIT E -- Form of Officer's Certificate
EXHIBIT F -- Form of Solvency Letter
EXHIBIT G -- Form of Assignment and Assumption Agreement
(v)
<PAGE> 7
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of June 25,
1996, amending and restating CREDIT AGREEMENT, dated as of December 2, 1993,
among THERMADYNE HOLDINGS CORPORATION, a Delaware corporation, the lenders
listed from time to time on Annex I hereto (each a "Bank" and, collectively,
the "Banks"), and BANKERS TRUST COMPANY, as Agent. Unless otherwise defined
herein, all capitalized terms used herein and defined in Section 10 are used
herein as so defined.
W I T N E S S E T H :
WHEREAS, the Borrower and the Banks are party to a Secured
Guaranteed Credit Agreement, dated as of December 2, 1993 (as the same has been
amended, modified or supplemented prior to the date hereof, the "Original
Credit Agreement"); and
WHEREAS, the parties hereto permanently waive all scheduled
reductions and mandatory prepayments of the Term Loans (as defined in the
Original Credit Agreement) and wish to amend and restate the Original Credit
Agreement as herein provided;
NOW, THEREFORE, the parties hereto agree that the Original
Credit Agreement shall be and hereby is amended and restated in its entirety as
follows, provided that if the Restatement Effective Date has not occurred on or
prior to July 15, 1996 this amendment and restatement shall be void and of no
further effect, with the Original Credit Agreement to remain in effect:
SECTION 1. Amount and Terms of Credit.
1.01 Commitments. (A) Subject to and upon the terms and
conditions herein set forth, each Bank severally agrees to make a loan or loans
(each a "Revolving Loan" and, collectively, the "Revolving Loans") to the
Borrower, which Revolving Loans:
(i) shall be made at any time and from time to time on
and after the Restatement Effective Date and prior to the Maturity
Date;
(ii) except as provided in Section 1.10, may, at the
option of the Borrower, be incurred and maintained as and/or converted
into Base Rate Loans
<PAGE> 8
or Eurodollar Loans, provided, that (x) Revolving Loans may not be
incurred as Eurodollar Loans prior to the Syndication Date and (y) all
Revolving Loans made as part of the same Borrowing shall, unless
otherwise specifically provided herein, consist of Revolving Loans of
the same Type;
(iii) may be repaid and reborrowed in accordance with the
provisions hereof; and
(iv) shall not exceed for any Bank at any time outstanding
that aggregate principal amount which, when combined with such Bank's
Percentage of Swingline Loans then outstanding and of the Letter of
Credit Outstandings (exclusive of Swingline Loans and Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the
incurrence of, such Revolving Loans) at such time, equals the
Commitment of such Bank at such time.
(B) (a) Subject to and upon the terms and conditions herein
set forth, BTCo in its individual capacity agrees to make at any time and from
time to time after the Restatement Effective Date and prior to the Swingline
Expiry Date, a loan or loans to the Borrower (each a "Swingline Loan" and,
collectively, the "Swingline Loans"), which Swingline Loans (i) shall be made
and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in
accordance with the provisions hereof, (iii) shall not exceed in aggregate
principal amount at any time outstanding, when combined with the aggregate
principal amount of all Revolving Loans then outstanding and the Letter of
Credit Outstandings (exclusive of Revolving Loans and Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, such
Swingline Loans) at such time, an amount equal to the Total Commitment then in
effect and (iv) shall not exceed in aggregate principal amount at any time
outstanding the Maximum Swingline Amount. BTCo shall not be obligated to make
any Swingline Loans at a time when a Bank Default exists unless BTCo has
entered into arrangements reasonably satisfactory to it and the Borrower to
eliminate BTCo's risk with respect to the Defaulting Bank's or Banks'
participation in such Swingline Loans, including by cash collateralizing each
such Defaulting Bank's Percentage of the outstanding Swingline Loans. BTCo
will not make a Swingline Loan after it has received written notice from the
Borrower or the Required Banks stating that a Default or an Event of Default
exists until such time as BTCo shall have received a written notice of (i)
rescission of such notice from the party or parties originally delivering the
same or (ii) a waiver of such Default or Event of Default from the Required
Banks.
(b) On any Business Day, BTCo may, in its sole discretion,
give notice to the Banks that its outstanding Swingline Loans shall be funded
with a Borrowing of Revolving Loans (provided that each such notice shall be
deemed to have been automatically given upon the occurrence of a Default or an
Event of Default under Section 9.05), in
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<PAGE> 9
which case a Borrowing of Revolving Loans constituting Base Rate Loans (each
such Borrowing, a "Mandatory Borrowing") shall be made on the immediately
succeeding Business Day by all Banks pro rata based on each Bank's Percentage,
and the proceeds thereof shall be applied directly to repay BTCo for such
outstanding Swingline Loans. Each Bank hereby irrevocably agrees to make Base
Rate Loans upon one Business Day's notice pursuant to each Mandatory Borrowing
in the amount and in the manner specified in the preceding sentence and on the
date specified in writing by BTCo notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the Minimum Borrowing Amount otherwise
required hereunder, (ii) whether any conditions specified in Section 5 are then
satisfied, (iii) whether a Default or an Event of Default has occurred and is
continuing, (iv) the date of such Mandatory Borrowing and (v) any reduction in
the Total Commitment after any such Swingline Loans were made. In the event
that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code in respect of the
Borrower), each Bank (other than BTCo) hereby agrees that it shall forthwith
purchase from BTCo (without recourse or warranty) such assignment of the
outstanding Swingline Loans as shall be necessary to cause the Banks to share
in such Swingline Loans ratably based upon their respective Percentages,
provided that all interest payable on the Swingline Loans shall be for the
account of BTCo until the date the respective assignment is purchased and, to
the extent attributable to the purchased assignment, shall be payable to the
Bank purchasing same from and after such date of purchase.
1.02 Minimum Borrowing Amounts, etc. The aggregate principal
amount of each Borrowing (other than a Mandatory Borrowing) shall not be less
than the Minimum Borrowing Amount. More than one Borrowing may be incurred on
any day; provided, that at no time shall there be outstanding more than ten
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires
to incur Loans (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Agent at its Notice Office, (x) prior to 12:00
Noon (New York time), at least three Business Days' prior written notice (or
telephonic notice promptly confirmed in writing) of each Borrowing of
Eurodollar Loans and (y) prior to 11:00 A.M. (New York time) on the date of
each incurrence of Base Rate Loans, prior written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of Base Rate Loans to be made
hereunder. Each such notice (each, a "Notice of Borrowing") shall, except as
provided in Section 1.10(b), be irrevocable, and, in the case of each written
notice and each confirmation of telephonic notice, shall be in the form of
Exhibit A-1, appropriately completed to specify: (i) the aggregate principal
amount of the Loans to be made pursuant to such Borrowing; (ii) the date of
such Borrowing (which shall be a Business Day); and (iii) whether the
respective Borrowing shall consist of Base Rate Loans or, to the extent
permitted
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<PAGE> 10
hereunder, Eurodollar Loans and, if Eurodollar Loans, the Interest Period to be
initially applicable thereto.
(b) (i) Whenever the Borrower desires to incur
Swingline Loans hereunder, it shall give BTCo not later than 12:00 Noon (New
York time) on the day such Swingline Loan is to be made, written notice (or
telephonic notice promptly confirmed in writing) of such Swingline Loan. Each
such notice shall be irrevocable and shall specify in each case (x) the date of
such incurrence (which shall be a Business Day) and (y) the aggregate principal
amount of the Swingline Loan requested to be made.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(B)(b), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of Mandatory Borrowings as set
forth in such Section.
(c) The Agent shall promptly give each Bank written notice
(or telephonic notice promptly confirmed in writing) of each proposed
Borrowing, of such Bank's proportionate share thereof, if any, and of the other
matters covered by the Notice of Borrowing.
(d) Without in any way limiting the obligation of the
Borrower to confirm in writing any telephonic notice permitted to be given
hereunder, the Agent or BTCo (in the case of a Borrowing of Swingline Loans) or
the Letter of Credit Issuer (in the case of the issuance of Letters of Credit),
as the case may be, may prior to receipt of written confirmation act without
liability upon the basis of such telephonic notice, believed by the Agent, BTCo
or the Letter of Credit Issuer in good faith to be from an Authorized Officer
of the Borrower. In each such case, the Borrower hereby waives the right to
dispute the Agent's, BTCo's or the Letter of Credit Issuer's record of the
terms of such telephonic notice.
1.04 Disbursement of Funds. (a) No later than 1:00 P.M.
(New York time) on the date specified in each Notice of Borrowing (or (x) in
the case of Swingline Loans, not later than 2:00 P.M. (New York time) on the
date specified in Section 1.03(b) or (y) in the case of Mandatory Borrowings,
not later than 12:00 Noon (New York time) on the date specified in Section
1.01(B)), each Bank will make available its pro rata share, if any, of each
Borrowing requested to be made on such date (or in the case of Swingline Loans,
BTCo shall make available the full amount thereof) in the manner provided
below. All amounts shall be made available to the Agent in U.S. dollars and
immediately available funds at the Payment Office and the Agent promptly will
make available to the Borrower by depositing to its account at the Payment
Office the aggregate of the amounts so made available in the type of funds
received. Unless the Agent shall have been notified by any Bank prior to the
date of Borrowing that such Bank does not intend to make available to the Agent
its portion of the Borrowing or Borrowings to be made on such
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<PAGE> 11
date, the Agent may assume that such Bank has made such amount available to the
Agent on such date of Borrowing, and the Agent, in reliance upon such
assumption, may (in its sole discretion and without any obligation to do so)
make available to the Borrower a corresponding amount. If such corresponding
amount is not in fact made available to the Agent by such Bank and the Agent
has made available same to the Borrower, the Agent shall be entitled to recover
such corresponding amount from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent
shall promptly notify the Borrower in writing, and the Borrower shall
immediately pay such corresponding amount to the Agent. The Agent shall also be
entitled to recover from the Bank or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to the
date such corresponding amount is recovered by the Agent, at a rate per annum
equal to (x) if paid by such Bank, the overnight Federal Funds rate or (y) if
paid by the Borrower, the then applicable rate of interest, calculated in
accordance with Section 1.08, for the respective Loans.
(b) Nothing herein shall be deemed to relieve any Bank from
its obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any default by such
Bank hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, all the Loans made to it by each Bank shall be
evidenced (i) if Revolving Loans, by a promissory note substantially in the
form of Exhibit B-1 with blanks appropriately completed in conformity herewith
(each a "Revolving Note" and collectively the "Revolving Notes") and (ii) if
Swingline Loans, by a promissory note substantially in the form of Exhibit B-2
with blanks appropriately completed in conformity herewith (the "Swingline
Note").
(b) The Revolving Note issued to each Bank shall (i) be
executed by the Borrower, (ii) be payable to the order of such Bank and be
dated the Restatement Effective Date, (iii) be in a stated principal amount
equal to the Commitment of such Bank and be payable in the principal amount of
the Revolving Loans evidenced thereby, (iv) mature on the Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 1.08 in respect
of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01,
and mandatory repayment as provided in Section 4.02, and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.
(c) The Swingline Note issued to BTCo shall (i) be executed by
the Borrower, (ii) be payable to the order of BTCo and be dated the Restatement
Effective Date, (iii) be in a stated principal amount equal to the Maximum
Swingline Amount and be payable in the principal amount of the Swingline Loans
evidenced thereby, (iv) mature
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<PAGE> 12
on the Swingline Expiry Date, (v) bear interest as provided in Section 1.08 in
respect of the Base Rate Loans evidenced thereby, (vi) be subject to voluntary
prepayment as provided in Section 4.01, and mandatory repayment as provided in
Section 4.02, and (vii) be entitled to the benefits of this Agreement and the
other Credit Documents.
(d) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of such
Loans.
1.06 Conversions. The Borrower shall have the option to
convert on any Business Day occurring on or after the Syndication Date all or a
portion at least equal to the applicable Minimum Borrowing Amount of the
outstanding principal amount of the Revolving Loans into a Borrowing or
Borrowings of another Type of Revolving Loans; provided, that (i) except as
otherwise provided in Section 1.10(b), Eurodollar Loans may be converted into
Base Rate Loans only on the last day of an Interest Period applicable thereto
and no partial conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of the Eurodollar Loans made pursuant to such
Borrowing to less than the Minimum Borrowing Amount applicable thereto, (ii)
Base Rate Loans may only be converted into Eurodollar Loans if no Default under
Section 9.01 or Event of Default is in existence on the date of the conversion
and (iii) Borrowings of Eurodollar Loans resulting from this Section 1.06 shall
be limited in number as provided in Section 1.02. Each such conversion shall be
effected by the Borrower by giving the Agent at its Notice Office, prior to
12:00 Noon (New York time), at least three Business Days' (or one Business
Day's in the case of a conversion into Base Rate Loans) prior written notice
(or telephonic notice promptly confirmed in writing) (each a "Notice of
Conversion") specifying the Revolving Loans to be so converted, the Type of
Loans to be converted into and, if to be converted into a Borrowing of
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall give each Bank prompt notice of any such proposed conversion
affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans
under this Agreement shall be made by the Banks pro rata on the basis of their
Commitments. It is understood that no Bank shall be responsible for any default
by any other Bank of its obligation to make Revolving Loans hereunder and that
each Bank shall be obligated to make the Loans to be made by it hereunder,
regardless of the failure of any other Bank to fulfill its commitments
hereunder.
1.08 Interest. (a) The unpaid principal amount of each Base
Rate Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by
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<PAGE> 13
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Base Rate Margin plus the Base Rate in effect from time to time.
(b) The unpaid principal amount of each Eurodollar Loan shall
bear interest from the date of the Borrowing thereof until maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be the
Applicable Eurodollar Margin plus the relevant Eurodollar Rate.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan shall bear interest at a rate per
annum equal to the Base Rate in effect from time to time plus the sum of (i) 2%
and (ii) the Applicable Base Rate Margin; provided, that principal in respect
of Eurodollar Loans shall bear interest from the date the same becomes due
(whether by acceleration or otherwise) until the end of the Interest Period
applicable to such Eurodollar Loan at a per annum rate equal to 2% in excess of
the rate of interest applicable to such Eurodollar Loans on such due date.
(d) Interest shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each Base Rate Loan, quarterly in arrears on the last
Business Day of each March, June, September and December, (ii) in respect of
each Eurodollar Loan, on the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three months, on
each date occurring at three month intervals after the first day of such
Interest Period and (iii) in respect of each Loan, on any prepayment or
conversion (on the amount prepaid or converted), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) All computations of interest hereunder shall be made in
accordance with Section 12.07(b).
(f) The Agent, upon determining the interest rate for any
Borrowing of Eurodollar Loans for any Interest Period, shall promptly notify
the Borrower and the Banks thereof.
1.09 Interest Periods. At the time the Borrower gives a Notice
of Borrowing or Notice of Conversion in respect of the making of, or conversion
into, a Borrowing of Eurodollar Loans (in the case of the initial Interest
Period applicable thereto) or prior to 12:00 Noon (New York time) on the third
Business Day prior to the expiration of an Interest Period applicable to a
Borrowing of Eurodollar Loans (in the case of any subsequent Interest Period),
it shall have the right to elect by giving the Agent written notice (or
telephonic notice promptly confirmed in writing) of the Interest Period
applicable to such Borrowing, which Interest Period shall, at the option of the
Borrower,
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<PAGE> 14
be a one, two, three or six month period. Notwithstanding anything to the
contrary contained above:
(i) all Eurodollar Loans comprising a Borrowing shall
have the same Interest Period;
(ii) the initial Interest Period for any Borrowing of
Eurodollar Loans shall commence on the date of such Borrowing
(including the date of any conversion from a Borrowing of Base Rate
Loans) and each Interest Period occurring thereafter in respect of
such Borrowing shall commence on the day on which the next preceding
Interest Period expires;
(iii) if any Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the
last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a
day which is not a Business Day, such Interest Period shall expire on
the next succeeding Business Day, provided, that if any Interest
Period would otherwise expire on a day which is not a Business Day but
is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(v) no Interest period may be elected that extends beyond
the date of any Scheduled Reduction if after giving effect thereto the
sum of (x) the aggregate principal amount of Eurodollar Loans with
Interest Periods ending beyond such date plus (y) the aggregate Stated
Amount of Letters of Credit with stated expiry dates occurring beyond
such date would exceed the Total Commitment after giving effect to
such Scheduled Reduction;
(vi) no Interest Period may be elected if it would extend
beyond the Maturity Date; and
(vii) no Interest Period may be elected at any time when a
Default under Section 9.01 or Event of Default is then in existence.
If upon the expiration of any Interest Period, the Borrower has failed to, or
is not permitted to, elect a new Interest Period to be applicable to the
respective Borrowing of Eurodollar Loans as provided above, the Borrower shall
be deemed to have elected to convert such Borrowing into a Borrowing of Base
Rate Loans effective as of the expiration date of such current Interest Period.
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<PAGE> 15
1.10 Increased Costs, Illegality, etc. (a) In the event that
(x) in the case of clause (i) below, the Agent or (y) in the case of clauses
(ii) and (iii) below, any Bank, shall have determined (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto):
(i) on any date for determining the Eurodollar Rate for
any Interest Period, that, by reason of any changes arising after the
date of this Agreement affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased
costs or reductions in the amounts received or receivable hereunder
with respect to any Eurodollar Loans (other than any increased cost or
reduction in the amount received or receivable resulting from the
imposition of or a change in the rate of taxes or similar charges)
because of (x) any change since the Restatement Effective Date in any
applicable law, governmental rule, regulation, guideline, order or
request (whether or not having the force of law), or in the
interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation,
guideline, order or request (such as, for example, but not limited to,
a change in official reserve requirements, but, in all events,
excluding reserves required under Regulation D to the extent included
in the computation of the Eurodollar Rate) and/or (y) other
circumstances affecting the interbank Eurodollar market or the
position of such Bank in such market; or
(iii) at any time since the Restatement Effective Date,
that the making or continuance of any Eurodollar Loan has become
unlawful by compliance by such Bank in good faith with any law,
governmental rule, regulation, guideline or order (or would conflict
with any such governmental rule, regulation, guideline or order not
having the force of law but with which such Bank customarily complies
even though the failure to comply therewith would not be unlawful), or
has become impracticable as a result of a contingency occurring after
the Restatement Effective Date which materially and adversely affects
the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent in the case of clause (i)
above) shall (x) on such date and (y) within 10 Business Days of the date on
which such event no longer exists give notice (by telephone confirmed in
writing) to the Borrower and (except in the case of clause (i)) to the Agent of
such determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by the
Agent
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<PAGE> 16
no longer exist, and any Notice of Borrowing or Notice of Conversion given by
the Borrower with respect to Eurodollar Loans which have not yet been incurred
shall be deemed rescinded by the Borrower, (y) in the case of clause (ii)
above, the Borrower agrees to pay to such Bank, upon written demand therefor
(accompanied by the written notice referred to below), such additional amounts
(in the form of an increased rate of, or a different method of calculating,
interest or otherwise as such Bank in its sole discretion shall determine) as
shall be required to compensate such Bank for such increased costs or
reductions in amounts received or receivable hereunder (a written notice as to
the additional amounts owed to such Bank, showing the basis for the calculation
thereof, submitted to the Borrower by such Bank shall, absent manifest error,
be final and conclusive and binding upon all parties hereto) and (z) in the
case of clause (iii) above, the Borrower shall take one of the actions
specified in Section 1.10(b) as promptly as possible and, in any event, within
the time period required by law. Each of the Agent and each Bank agrees that if
it gives notice to the Borrower of any of the events described in clause (i) or
(iii) above, it shall promptly notify the Borrower and, in the case of any such
Bank, the Agent, if such event ceases to exist. If any such event described in
clause (iii) above ceases to exist as to a Bank, the obligations of such Bank
to make Eurodollar Loans and to convert Base Rate Loans into Eurodollar Loans
on the terms and conditions contained herein shall be reinstated.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii) the
Borrower shall) either (i) if the affected Eurodollar Loan is then being made
pursuant to a Borrowing, cancel said Borrowing by giving the Agent telephonic
notice (confirmed promptly in writing) thereof on the same date that the
Borrower was notified by a Bank pursuant to Section 1.10(a)(ii) or (iii)), or
(ii) if the affected Eurodollar Loan is then outstanding, upon at least three
Business Days' notice to the Agent, require the affected Bank to convert each
such Eurodollar Loan into a Base Rate Loan (which conversion, in the case of
the circumstances described in Section 1.10(a)(iii), shall occur no later than
the last day of the Interest Period then applicable to such Eurodollar Loan (or
such earlier date as shall be required by applicable law)); provided, that if
more than one Bank is affected at any time, then all affected Banks must be
treated the same pursuant to this Section 1.10(b). Each Bank, upon determining
in good faith that any additional amounts will be payable pursuant to this
Section 1.10(b), will give prompt written notice thereof to the Borrower, which
notice shall set forth the basis of the calculation of such additional amounts,
although the failure to give any such notice shall not release or diminish the
Borrower's obligations to pay additional amounts pursuant to this Section
1.10(b) upon the subsequent receipt of such notice.
(c) If any Bank shall have determined that after the
Restatement Effective Date, the adoption or effectiveness of any applicable
law, rule or regulation regarding capital adequacy, or any change therein, or
any change in the interpretation or administration
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<PAGE> 17
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by
such Bank with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Bank's capital or assets as a consequence of its commitments or obligations
hereunder to a level below that which such Bank could have achieved but for
such adoption, effectiveness, change or compliance (taking into consideration
such Bank's policies with respect to capital adequacy), then from time to time,
upon written demand by such Bank (with a copy to the Agent), accompanied by the
notice referred to in the last sentence of this clause (c), the Borrower shall
pay to such Bank such additional amount or amounts as will compensate such Bank
for such reduction. In determining such additional amounts, each Bank will act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable. Each Bank, upon determining in good faith that any
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Borrower, which notice shall set forth the
basis of the calculation of such additional amounts, although the failure to
give any such notice shall not release or diminish the Borrower's obligations
to pay additional amounts pursuant to this Section 1.10(c) upon the subsequent
receipt of such notice.
1.11 Compensation. (a) The Borrower agrees to compensate each
Bank, upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other
funds required by such Bank to fund its Eurodollar Loans but excluding loss of
anticipated profit with respect to any Loans) which such Bank may sustain: (i)
if for any reason (other than a default by such Bank or the Agent) a Borrowing
of Eurodollar Loans does not occur on a date specified therefor in a Notice of
Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower or
deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment or
conversion of any Eurodollar Loans occurs on a date which is not the last day
of an Interest Period applicable thereto; (iii) if any prepayment of any
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Eurodollar Loans when required by the terms of this
Agreement or (y) an election made pursuant to Section 1.10(b). Calculation of
all amounts payable to a Bank under this Section 1.11 shall be made as though
that Bank had actually funded its relevant Eurodollar Loan through the purchase
of a Eurodollar deposit bearing interest at the Eurodollar Rate in an amount
equal to the amount of that Loan, having a maturity comparable to the relevant
Interest Period and through the transfer of such Eurodollar deposit from an
offshore office of that Bank to a domestic office of that Bank in the United
States of America; provided, however, that each Bank may fund each of its
Eurodollar
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<PAGE> 18
Loans in any reasonable manner it sees fit and the foregoing assumption shall
be utilized only for the calculation of amounts payable under this Section
1.11.
(b) Notwithstanding anything in this Agreement to the
contrary, to the extent any notice required by Section 1.10, 2.05 or 4.04 is
given by any Bank more than 150 days after such Bank obtained, or reasonably
should have obtained, knowledge of the occurrence of the event giving rise to
the additional costs of the type described in such Section, such Bank shall not
be entitled to compensation under Section 1.10, 2.05 or 4.04 for any amounts
incurred or accruing prior to the giving of such notice to the Borrower.
1.12 Change of Lending Office. Each Bank agrees that, upon the
occurrence and continuance of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), 1.10(c), 2.05 or 4.04 with respect to such Bank, it will,
if requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office for any Loans
or Letters of Credit affected by such event; provided, that such designation is
made on such terms that, in the sole judgment of such Bank, such Bank and its
lending office suffer no economic, legal or regulatory disadvantage, with the
object of avoiding the consequences of the event giving rise to the operation
of any such Section. Nothing in this Section 1.12 shall affect or postpone any
of the obligations of the Borrower or the right of any Bank provided in Section
1.10, 2.05 or 4.04.
1.13 Replacement of Banks. (a) (i) If any Bank becomes a
Defaulting Bank or otherwise defaults in its obligations to make Loans or fund
Unpaid Drawings, (ii) upon the occurrence of any event giving rise to the
operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.05 or
Section 4.04 with respect to any Bank which results in such Bank charging to
the Borrower increased costs in excess of those being generally charged by the
other Banks, or (iii) as and to the extent provided for in Section 12.12(b),
the Borrower shall have the right, in accordance with the requirements of
Section 12.04(b), if no Event of Default will exist after giving effect to such
replacement, to replace such Bank (the "Replaced Bank") with an Eligible
Transferee or Transferees, none of which shall constitute a Defaulting Bank at
the time of such replacement (collectively, the "Replacement Bank"), reasonably
acceptable to the Agent and the Letter of Credit Issuer, provided that (i) at
the time of any replacement pursuant to this Section 1.13, the Replacement Bank
shall enter into one or more Assignment and Assumption Agreements pursuant to
Section 12.04(b) (and with the assignment fee payable pursuant to said Section
12.04(b) to be paid by the Replacement Bank) pursuant to which the Replacement
Bank shall acquire all of the Commitments and outstanding Loans of, and in each
case participations in Letters of Credit by, the Replaced Bank and, in
connection therewith, shall pay to (x) the Replaced Bank in respect thereof an
amount equal to the sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced Bank, (B) an amount
equal to all Unpaid Drawings that have been funded by
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<PAGE> 19
(and not reimbursed to) such Replaced Bank, together with all then unpaid
interest with respect thereto at such time and (C) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant to
Section 3.01 plus (y) the respective Letter of Credit Issuer an amount equal to
such Replaced Bank's Percentage of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore funded
by such Replaced Bank plus (z) BTCo an amount equal to such Replaced Bank's
Percentage of any Mandatory Borrowing to the extent such amount was not
theretofore funded by such Replaced Bank, and (ii) all obligations of the
Borrower owing to the Replaced Bank (other than those specifically described in
clause (i) above in respect of which the assignment purchase price has been, or
is concurrently being, paid) shall be paid in full to such Replaced Bank
concurrently with such replacement.
(b) Upon the execution of the respective Assignment and
Assumption Agreements, the payment of amounts referred to in clauses (i) and
(ii) of Section 1.13(a) and, if so requested by the Replacement Bank, delivery
to the Replacement Bank of the appropriate Note or Notes executed by the
applicable Borrower, the Replacement Bank shall become a Bank hereunder and the
Replaced Bank shall cease to constitute a Bank hereunder, except with respect
to indemnification provisions applicable to the Replaced Bank under this
Agreement (including, without limitation, Sections 1.10, 1.11, 2.05, 4.04,
12.01 and 12.06), which shall survive as to such Replaced Bank, provided that
no Replaced Bank may seek to recover costs or indemnification under Sections
1.10, 1.11, 2.05 or 4.04 after the expiration of one year following the events
giving rise to such recovery.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request the Letter of Credit
Issuer at any time and from time to time on or after the Restatement Effective
Date and prior to the Maturity Date to issue, for the account of the Borrower
and in support of, (x) trade obligations and other obligations of the Borrower
incurred in the ordinary course of business, including without limitation,
obligations with respect to insurance, workers' compensation, surety bonds and
statutory obligations, and (y) such other obligations of the Borrower to any
other Person that are reasonably acceptable to the Agent and the Letter of
Credit Issuer, and subject to and upon the terms and conditions herein set
forth the Letter of Credit Issuer agrees to issue from time to time,
irrevocable letters of credit in such form customarily used by the Letter of
Credit Issuer or in such form as has been approved by the Letter of Credit
Issuer and the Agent (each such letter of credit, together with each Existing
Letter of Credit, a "Letter of Credit" and collectively, the "Letters of
Credit").
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(b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings at such time, would exceed either (x) $25,000,000 or (y) when
added to the aggregate principal amount of all Loans then outstanding, the
Total Commitment at such time; (ii) each Letter of Credit shall have an expiry
date occurring the earlier of (x) one year after such Letter of Credit's date
of issuance, provided, that any standby Letter of Credit may be automatically
renewable for successive periods of up to one year so long as such standby
Letter of Credit provides that the Letter of Credit Issuer retains an option,
satisfactory to such Letter of Credit Issuer, to terminate such standby Letter
of Credit within a specified period of time prior to each scheduled renewal
date and (y) the fifth Business Day prior to the Maturity Date; (iii) each
Letter of Credit shall be denominated in U.S. dollars; and (iv) the Letter of
Credit Issuer will not issue any Letter of Credit after it has received written
notice from the Borrower or the Required Banks stating that an Event of Default
exists until such time as the Letter of Credit Issuer shall have received a
written notice of (x) rescission of such notice from the party or parties
originally delivering same or (y) a waiver of such Event of Default by the
Required Banks.
(c) Notwithstanding the foregoing, in the event a Bank Default
exists, the Letter of Credit Issuer shall not be required to issue any Letter
of Credit unless the Letter of Credit Issuer has entered into arrangements
satisfactory to it and the Borrower to eliminate the Letter of Credit Issuer's
risk with respect to the participation in Letters of Credit of any Defaulting
Bank, including by cash collateralizing any such Defaulting Bank's Percentage
of the Letter of Credit Outstandings.
(d) Annex III hereto contains a description of all letters of
credit outstanding on, and to continue in effect after, the Restatement
Effective Date. Each such letter of credit issued by a bank that becomes a Bank
under this Agreement prior to the Syndication Date (each, an "Existing Letter
of Credit") shall constitute a "Letter of Credit" for all purposes of this
Agreement, issued, for purposes of Section 2.04(a), on the date such bank so
becomes a Bank (or, if later, the Restatement Effective Date), provided that
each such letter of credit listed on Annex III shall constitute a "Letter of
Credit" hereunder for the period from the Restatement Effective Date to the
Syndication Date (or such earlier date, if any, on which the institution
issuing same (each an "L/C Issuer") becomes a Bank hereunder) (each such letter
of credit during such period, an "Interim Letter of Credit") and the Borrower,
the Agent and the Banks hereby agree that, from and after such date, the terms
of this Agreement shall apply to all such Letters of Credit, superseding any
other agreement theretofore applicable to them provided that BTCo shall be
deemed for the purpose of Section 2.04 to have purchased as of the Restatement
Effective Date 100% participation in each Interim Letter of Credit for so long
as constituting an Interim Letter of Credit.
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2.02 Letter of Credit Requests; Notices of Issuance. (a)
Whenever it desires that a Letter of Credit be issued, the Borrower shall give
the Agent and the Letter of Credit Issuer written notice (or telephonic notice
confirmed in writing) thereof prior to 12:00 Noon (New York time) at least five
Business Days (or such shorter period as may be acceptable to the Letter of
Credit Issuer) prior to the proposed date of issuance (which shall be a
Business Day) which written notice shall be in the form of Exhibit A-2 attached
hereto (each a "Letter of Credit Request"). Each Letter of Credit Request shall
include any other documents as the Letter of Credit Issuer customarily requires
in connection therewith. The Agent shall promptly notify each Bank of each
Letter of Credit Request.
(b) The Letter of Credit Issuer shall, on the date of each
issuance of a Letter of Credit by it, give the Agent, each Bank and the
Borrower written notice of the issuance of such Letter of Credit, accompanied
by a copy to the Agent of the Letter of Credit or Letters of Credit issued by
it.
2.03 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the Letter of Credit Issuer, by making
payment to the Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by the Letter of Credit Issuer under any
Letter of Credit issued by it (each such amount so paid or disbursed until
reimbursed, an "Unpaid Drawing") promptly upon but no later than three Business
Days after the Letter of Credit Issuer notifying the Borrower that such payment
or disbursement has occurred, with interest on the amount so paid or disbursed
by the Letter of Credit Issuer, to the extent not reimbursed prior to 1:00 P.M.
(New York time) on the date of such payment or disbursement, from and including
the date paid or disbursed to but not including the date the Letter of Credit
Issuer is reimbursed therefor at a rate per annum which shall be the Applicable
Base Rate Margin plus the Base Rate as in effect from time to time (plus an
additional 2% per annum if not reimbursed by the third Business Day after the
date of such notice of such payment or disbursement), such interest also to be
payable on demand.
(b) The Borrower's obligation under this Section 2.03 to
reimburse the Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against the Letter
of Credit Issuer, the Agent or any Bank, including, without limitation, any
defense based upon the failure of any drawing under a Letter of Credit to
conform to the terms of the Letter of Credit or any non- application or
misapplication by the beneficiary of the proceeds of such drawing; provided,
however, that the Borrower shall not be obligated to reimburse the Letter of
Credit Issuer for any wrongful payment made by the Letter of Credit Issuer
under a Letter of Credit as a result of acts or
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<PAGE> 22
omissions constituting willful misconduct or gross negligence on the part of
the Letter of Credit Issuer.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter of
Credit Issuer shall be deemed to have sold and transferred to each other Bank,
and each such Bank (each a "Participant") shall be deemed irrevocably and
unconditionally to have purchased and received from such Letter of Credit
Issuer, without recourse or warranty, an undivided interest and participation,
to the extent of such Bank's Percentage, in such Letter of Credit, each
substitute letter of credit, each drawing made thereunder and the obligations
of the Borrower under this Agreement with respect thereto (although Letter of
Credit Fees shall be payable directly to the Agent for the account of the Banks
as provided in Section 3.01(c) and the Participants shall have no right to
receive any portion of any Facing Fees) and any security therefor or guaranty
pertaining thereto. Upon any change in the Commitments of the Banks pursuant to
Section 12.04(b), it is hereby agreed that, with respect to all outstanding
Letters of Credit and Unpaid Drawings, there shall be an automatic adjustment
to the participations pursuant to this Section 2.04 to reflect the new
Percentages of the assigning and assignee Bank.
(b) In determining whether to pay under any Letter of Credit,
the Letter of Credit Issuer shall not have any obligation relative to the
Participants other than to determine that any documents required to be
delivered under such Letter of Credit have been delivered and that they appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by the Letter of Credit Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create for the Letter of
Credit Issuer any resulting liability.
(c) In the event that the Letter of Credit Issuer makes any
payment under any Letter of Credit and the Borrower shall not have reimbursed
such amount in full to the Letter of Credit Issuer pursuant to Section 2.03(a),
the Letter of Credit Issuer shall promptly notify the Agent, and the Agent
shall promptly notify each Participant of such failure, and each Participant
shall promptly and unconditionally pay to the Agent for the account of the
Letter of Credit Issuer, the amount of such Participant's Percentage of such
payment in U.S. dollars and in same day funds; provided, however, that no
Participant shall be obligated to pay to the Agent its Percentage of such
unreimbursed amount for any wrongful payment made by the Letter of Credit
Issuer under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of the Letter of Credit
Issuer. If the Agent so notifies any Participant required to fund a payment
under a Letter of Credit prior to 11:00 A.M. (New York time) on any Business
Day, such Participant shall make available to the Agent for the account of the
Letter of Credit Issuer such Participant's Percentage of the amount of such
payment on such
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Business Day in same day funds. If and to the extent such Participant shall not
have so made its Percentage of the amount of such payment available to the
Agent for the account of the Letter of Credit Issuer, such Participant agrees
to pay to the Agent for the account of the Letter of Credit Issuer, forthwith
on demand such amount, together with interest thereon, for each day from such
date until the date such amount is paid to the Agent for the account of the
Letter of Credit Issuer at the overnight Federal Funds rate. The failure of any
Participant to make available to the Agent for the account of the Letter of
Credit Issuer its Percentage of any payment under any Letter of Credit shall
not relieve any other Participant of its obligation hereunder to make available
to the Agent for the account of the Letter of Credit Issuer its Percentage of
any payment under any Letter of Credit on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to the Agent for the account of the Letter of
Credit Issuer such other Participant's Percentage of any such payment.
(d) Whenever the Letter of Credit Issuer receives a payment of
a reimbursement obligation as to which the Agent has received for the account
of the Letter of Credit Issuer any payments from the Participants pursuant to
clause (c) above, the Letter of Credit Issuer shall pay to the Agent and the
Agent shall promptly pay to each Participant which has paid its Percentage
thereof, in U.S. dollars and in same day funds, an amount equal to such
Participant's Percentage of the principal amount thereof and interest thereon
accruing after the actual funding of the respective participations.
(e) The obligations of the Participants to make payments to
the Agent for the account of the Letter of Credit Issuer with respect to
Letters of Credit shall be irrevocable and not subject to counterclaim, set-off
or other defense or any other qualification or exception whatsoever and shall
be made in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, set-off, defense or other
right which the Borrower may have at any time against a beneficiary
named in a Letter of Credit, any transferee of any Letter of Credit,
any Bank, or other Person, whether in connection with this Agreement,
any Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between
the Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
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<PAGE> 24
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Increased Costs. If after the Restatement Effective Date,
the adoption or effectiveness of any applicable law, rule or regulation, or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by the Letter of
Credit Issuer or any Participant with any request or directive (whether or not
having the force of law) by any such authority, central bank or comparable
agency shall either (i) impose, modify or make applicable any reserve, deposit,
capital adequacy or similar requirement against Letters of Credit issued by the
Letter of Credit Issuer or such Participant's participation therein, or (ii)
impose on the Letter of Credit Issuer or any Participant any other conditions
affecting this Agreement, any Letter of Credit or such Participant's
participation therein; and the result of any of the foregoing is to increase
the cost to the Letter of Credit Issuer or such Participant of issuing,
maintaining or participating in any Letter of Credit, or to reduce the amount
of any sum received or receivable by the Letter of Credit Issuer or such
Participant hereunder, then, upon written demand to the Borrower by the Letter
of Credit Issuer or such Participant (a copy of which notice shall be sent by
the Letter of Credit Issuer or such Participant to the Agent), accompanied by
the certificate described in the last sentence of this Section 2.05, the
Borrower shall pay to the Letter of Credit Issuer or such Participant such
additional amount or amounts as will compensate the Letter of Credit Issuer or
such Participant for such increased cost or reduction. A certificate submitted
to the Borrower by the Letter of Credit Issuer or such Participant, as the case
may be (a copy of which certificate shall be sent by the Letter of Credit
Issuer or such Participant to the Agent), setting forth in reasonable detail
the basis for the determination of such additional amount or amounts necessary
to compensate the Letter of Credit Issuer or such Participant as aforesaid
shall be final and conclusive and binding on the Borrower absent manifest
error, although the failure to deliver any such certificate shall not release
or diminish the Borrower's obligations to pay additional amounts pursuant to
this Section 2.05 upon subsequent receipt of such certificate. Prior to the
delivery of the certificate referred to in the preceding sentence, the Letter
of Credit Issuer and each Participant, upon determining in good faith that any
additional amounts will be payable pursuant to this Section 2.05, will give
prompt written notice thereof to the Borrower, although the failure to give any
such notice shall not release nor diminish the Borrower's obligations to pay
additional amounts pursuant to Section 2.05 upon the subsequent receipt of such
notice.
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SECTION 3. Fees; Commitments.
3.01 Fees. (a) The Borrower agrees to pay to the Agent for
distribution to each Non-Defaulting Bank a commitment fee (the "Commitment
Fee") for the period from the Restatement Effective Date to but not including
the date the Total Commitment has been terminated, computed for each day at a
rate equal to the Applicable CC Rate for such day multiplied by the then
Unutilized Commitment of such Bank. Accrued Commitment Fees shall be due and
payable quarterly in arrears on the last Business Day of March, June, September
and December and the date upon which the Total Commitment is terminated.
(b) The Borrower shall pay to the Agent for the account of the
Non-Defaulting Banks pro rata on the basis of their Percentages, a fee in
respect of each Letter of Credit (the "Letter of Credit Fee") computed for each
day at a rate equal to the Applicable Eurodollar Margin for such day multiplied
by the then Stated Amount of such Letter of Credit. Accrued Letter of Credit
Fees shall be due and payable quarterly in arrears on the last Business Day of
each March, June, September and December of each year and on the date upon
which the Total Commitment shall be terminated.
(c) The Borrower shall pay to the Agent for the account of the
Letter of Credit Issuer a fee in respect of each Letter of Credit issued by it
(the "Facing Fee") computed for each day at the rate of 1/4 of 1% per annum on
the then Stated Amount of such Letter of Credit; provided, that in no event
shall the annual Facing Fee with respect to each Letter of Credit be less than
$500; it being agreed that, on the date of issuance of any Letter of Credit and
on each anniversary thereof prior to the termination of such Letter of Credit,
if $500 will exceed the amount of Facing Fees that will accrue with respect to
such Letter of Credit for the immediately succeeding 12-month period, the full
$500 shall be payable on the date of issuance of such Letter of Credit and on
each such anniversary thereof prior to the termination of such Letter of
Credit. Except as provided in the immediately preceding sentence, accrued
Facing Fees shall be due and payable quarterly in arrears on the last Business
Day of each March, June, September and December of each year and on the date
upon which the Total Commitment shall be terminated.
(d) The Borrower hereby agrees to pay directly to the Letter
of Credit Issuer upon each issuance of, drawing under, and/or amendment of, a
Letter of Credit issued by it such amount as shall at the time of such
issuance, drawing or amendment be the administrative charge which the Letter of
Credit Issuer is customarily charging for issuances of, drawings under or
amendments of comparable letters of credit issued by it.
(e) The Borrower shall pay to the Agent, for its own account,
such fees as have been agreed to in writing by the Borrower and the Agent and
such other fees and
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expenses as may be agreed to from time to time between the Borrower and the
Agent, when and as due.
(f) All computations of Fees shall be made in accordance with
Section 12.07(b).
3.02 Voluntary Reduction of Commitments. Upon at least two
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), the Borrower shall have the right,
without premium or penalty, to terminate or partially reduce the Total
Unutilized Commitment; provided, that (x) any such termination or partial
reduction shall apply to proportionately and permanently reduce the Commitment
of each of the Banks and (y) any partial reduction pursuant to this Section
3.02 shall be in the amount of at least $1,000,000.
3.03 Mandatory Adjustments of Commitments, etc. (a) The Total
Commitment (and the Commitment of each Bank) shall be terminated on the earlier
of (i) the date on which a Change of Control occurs and (ii) the Maturity Date.
(b) The Total Commitment shall be reduced by (i) $25 million
on June 30, 1999 and (ii) an additional $75 million on June 30, 2000 (each a
"Scheduled Reduction").
(c) Each reduction to the Total Commitment pursuant to Section
3.01(b) shall be applied proportionately to reduce the Commitment of each Bank.
SECTION 4. Payments.
4.01 Voluntary Prepayments. The Borrower shall have the right
to prepay the Loans, in whole or in part, without premium or penalty except as
otherwise provided in this Agreement, from time to time on the following terms
and conditions:
(i) the Borrower shall give the Agent at the Notice
Office written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay the Loans, whether such Loans are
Revolving Loans or Swingline Loans, the amount of such prepayment and
(in the case of Eurodollar Loans) the specific Borrowing(s) pursuant
to which made, which notice shall be given by the Borrower prior to
12:00 Noon (New York time) at least three Business Days prior to the
date of such prepayment (or, in the case of Base Rate Loans, on the
same day) which notice shall, except in the case of Swingline Loans,
promptly be transmitted by the Agent to each of the Banks;
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(ii) each prepayment shall be in an aggregate principal
amount of at least $1,000,000 (or $100,000 in the case of Swingline
Loans); provided, that no partial prepayment of Eurodollar Loans made
pursuant to a Borrowing shall reduce the aggregate principal amount of
the Loans outstanding pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable thereto;
(iii) Eurodollar Loans may only be prepaid pursuant to this
Section 4.01 on the last day of an Interest Period applicable thereto;
and
(iv) each prepayment in respect of any Revolving Loans
made pursuant to a Borrowing shall be applied pro rata among such
Revolving Loans.
4.02 Mandatory Prepayments.
(A) Requirements: If on any date the sum of (i) the aggregate
outstanding principal amount of Revolving Loans and Swingline Loans (after
giving effect to all other repayments thereof on such date) plus (ii) the
Letter of Credit Outstandings on such date exceeds the Total Commitment as then
in effect, the Borrower shall repay on such date the principal of Swingline
Loans, and to the extent such Swingline Loans are insufficient, Revolving
Loans, in an aggregate amount equal to such excess. If, after giving effect to
the prepayment of all outstanding Swingline Loans and Revolving Loans, the
aggregate amount of Letter of Credit Outstandings exceeds the Total Commitment
as then in effect, the Borrower agrees to pay to the Agent an amount in cash
and/or Cash Equivalents equal to such excess and the Agent shall hold such
payment as security for the obligations of the Borrower hereunder pursuant to a
cash collateral agreement to be entered into in form and substance reasonably
satisfactory to the Agent (which shall permit certain investments in Cash
Equivalents satisfactory to the Agent, until the proceeds are applied to the
secured obligations).
(B) Application: With respect to each prepayment of Revolving
Loans required by this Section 4.02, the Borrower may designate the Types of
Loans which are to be prepaid and the specific Borrowing(s) pursuant to which
made; provided, that (i) Eurodollar Loans made pursuant to such Loans may be
designated for prepayment this Section 4.02 only on the last day of an Interest
Period applicable thereto unless all Eurodollar Loans made pursuant to such
Loans with Interest Periods ending on such date of required prepayment and all
Base Rate Loans made pursuant to such Loans have been paid in full; (ii) if any
prepayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding Revolving Loans made pursuant to such Borrowing to an amount
less than the Minimum Borrowing Amount, such Borrowing shall be immediately
converted into Base Rate Loans; and (iii) each prepayment of any Revolving
Loans made pursuant to a Borrowing shall be applied pro rata among such
Revolving Loans, provided that no prepayment
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pursuant to Section 4.02(A) (a) shall be applied to any Revolving Loans of a
Defaulting Bank at any time when the aggregate amount of the Revolving Loans of
any Non-Defaulting Bank exceeds such Non-Defaulting Bank's Percentage of all
Revolving Loans then outstanding. In the absence of a designation by the
Borrower as described in the preceding sentence, the Agent shall, subject to
the above, make such designation in its sole discretion with a view, but no
obligation, to minimize breakage costs owing under Section 1.11.
4.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement shall be made
to the Agent for the ratable account of the Banks entitled thereto, not later
than 1:00 P.M. (New York time) on the date when due and shall be made in
immediately available funds and in lawful money of the United States of America
at the Payment Office, it being understood that written, telex or facsimile
transmission notice by the Borrower to the Agent to make a payment from the
funds in the Borrower's account at the Payment Office shall constitute the
making of such payment to the extent of such funds held in such account. Any
payments under this Agreement which are made later than 1:00 P.M. (New York
time) shall be deemed to have been made on the next succeeding Business Day.
Whenever any payment to be made hereunder shall be stated to be due on a day
which is not a Business Day, the due date thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
shall be payable during such extension at the applicable rate in effect
immediately prior to such extension.
4.04 Net Payments. (a) All payments made by the Borrower
hereunder or under any Note will be made without setoff, counterclaim or other
defense. Except as provided in Section 4.04(b), all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any
political subdivision or taxing authority thereof or therein with respect to
such payments (but excluding, except as provided in the second succeeding
sentence, any tax imposed on or measured by the net income or net profits of a
Bank pursuant to the laws of the jurisdiction in which it is organized or the
jurisdiction in which the principal office or applicable lending office of such
Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect to such non-excluded taxes,
levies, imposts, duties, fees, assessments or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or
on account of any Taxes, will not be less than the amount provided for herein
or in such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Bank, upon the
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written request of such Bank, for taxes imposed on or measured by the net
income or net profits of such Bank pursuant to the laws of the jurisdiction in
which the principal office or applicable lending office of such Bank is located
or under the laws of any political subdivision or taxing authority of any such
jurisdiction in which the principal office or applicable lending office of such
Bank is located and for any withholding of taxes as such Bank shall determine
are payable by, or withheld from, such Bank, in each case in respect of such
amounts so paid to or on behalf of such Bank pursuant to the preceding sentence
and in respect of any amounts paid to or on behalf of such Bank pursuant to
this sentence. The Borrower will furnish to the Agent within 45 days after the
date the payment of any Taxes is due pursuant to applicable law certified
copies of tax receipts evidencing such payment by the Borrower. The Borrower
agrees to indemnify and hold harmless each Bank, and reimburse such Bank upon
its written request, for the amount of any Taxes so levied or imposed and paid
by such Bank and for which Borrower is responsible pursuant to the preceding
sentences of this Section 4.04(a).
(b) Each Bank that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Agent on or prior to the
Restatement Effective Date, or in the case of a Bank that is an assignee or
transferee of an interest under this Agreement pursuant to Section 12.04
(unless the respective Bank was already a Bank hereunder immediately prior to
such assignment or transfer), on the date of such assignment or transfer to
such Bank, (i) two accurate and complete original signed copies of Internal
Revenue Service Form 4224 or 1001 (or successor forms) certifying to such
Bank's entitlement to a complete exemption from United States withholding tax
with respect to payments to be made under this Agreement and under any Note, or
(ii) if the Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of
the Code and cannot deliver either Internal Revenue Service Form 1001 or 4224
pursuant to clause (i) above, (x) a certificate substantially in the form of
Exhibit C (any such certificate, a "Section 4.04(b)(ii) Certificate") and (y)
two accurate and complete original signed copies of Internal Revenue Service
Form W-8 (or successor form) certifying to such Bank's entitlement to a
complete exemption from United States withholding tax with respect to payments
of interest to be made under this Agreement and under any Note. In addition,
each Bank agrees that from time to time after the Restatement Effective Date,
when a lapse in time or a change in circumstances (or, upon written request
from the Borrower after the adoption, as final Treasury Regulation, of the
proposed Treasury Regulations published in the Federal Register on April 22,
1996 and relating to the withholding of tax on certain U.S.-source income paid
to foreign persons) renders the previous certification obsolete or inaccurate
in any material respect, it will deliver to the Borrower and the Agent two new
accurate and complete original signed copies of Internal Revenue Service Form
4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as the case
may be, and such other or successor forms as may be required in order to
confirm or establish the entitlement of such Bank to a continued exemption from
or reduction in United States withholding tax with respect to
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payments under this Agreement and any Note, or it shall immediately notify the
Borrower and the Agent of its inability to deliver any such Form or Certificate
in which case such Bank shall not be required to deliver any such Form or
Certificate pursuant to this Section 4.04(b). Notwithstanding anything to the
contrary contained in Section 4.04(a), but subject to Section 12.04(b) and the
immediately succeeding sentence, (x) the Borrower shall be entitled, to the
extent it is required to do so by law, to deduct or withhold income or similar
taxes imposed by the United States (or any political subdivision or taxing
authority thereof or therein) from interest, Fees or other amounts payable
hereunder for the account of any Bank which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for U.S. Federal
income tax purposes to the extent that such Bank has not provided to the
Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not be
obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to
a Bank in respect of income or similar taxes imposed by the United States if
(I) such Bank is not a United States person (defined as provided above) and has
not provided to the Borrower the Internal Revenue Service Forms required to be
provided to the Borrower pursuant to the foregoing provisions of this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish
a complete exemption from withholding of such taxes. Notwithstanding anything
to the contrary contained in the preceding sentence or elsewhere in this
Section 4.04 and except as set forth in Section 12.04(b), the Borrower agrees
to pay any additional amounts and to indemnify each Bank in the manner set
forth in Section 4.04(a) (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any Taxes deducted or
withheld by it as described in the immediately preceding sentence as a result
of any changes after the Restatement Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such Taxes.
SECTION 5. Conditions.
5.01 Conditions Precedent to the Restatement Effective Date.
This Agreement shall become effective on the date (the "Restatement Effective
Date") which is the date on which the following conditions shall have been
satisfied:
(a) Execution of Agreement. The Borrower and each of the
Banks shall have signed a copy of this Agreement (whether the same or
different copies) and shall have delivered same to the Agent at its
Notice Office or, in the case of the Banks, shall have given to the
Agent telephonic (confirmed in writing), written, telex or facsimile
transmitted notice (actually received) at such office that the same
has been signed and mailed to it.
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(b) Notes. On the Restatement Effective Date, there shall
have been delivered to the Agent for the account of each Bank the
appropriate Note or Notes, as the case may be, executed by the
Borrower in the amount, maturity and as otherwise provided herein.
(c) Officer's Certificate. On the Restatement Effective Date,
the Agent shall have received a certificate dated such date signed by
an appropriate officer of the Borrower stating that all of the
applicable conditions set forth in Sections 5.01(f) and 5.02 exist as
of such date.
(d) Opinions of Counsel. On the Restatement Effective Date,
the Agent shall have received opinions, addressed to each of the Banks
and dated the Restatement Effective Date, (i) from Weil Gotshal &
Manges LLP, special counsel to the Borrower, which opinion shall cover
the matters contained in Exhibit D-1 and such other matters incident
to the transactions contemplated herein as the Agent may reasonably
request, (ii) from Stephanie Josephson, General Counsel of the
Borrower, which opinion shall cover the matters contained in Exhibit
D-2 and such other matters incident to the transactions contemplated
herein as the Agent may reasonably request, (iii) from White & Case,
special counsel to the Banks, which opinion shall cover the matters
contained in Exhibit D-3 and (iv) from such local counsel (if any)
satisfactory to the Agent as the Agent may reasonably request, which
opinions shall cover certain matters relating to the security
interests granted pursuant to the Security Documents and such other
matters incident to the transactions contemplated herein as the Agent
may reasonably request and shall be in form and substance reasonably
satisfactory to the Agent.
(e) Corporate Proceedings. (A) On the Restatement Effective
Date, the Agent shall have received from each Credit Party a
certificate, dated the Restatement Effective Date, signed by the
chairman, a vice chairman, the president or any vice-president of such
Credit Party, and attested to by the secretary or any assistant
secretary of such Person, in the form of Exhibit E with appropriate
insertions, together with copies of the Certificate of Incorporation
and By-Laws, or other organizational documents, of such Credit Party
and the resolutions of such Credit Party referred to in such
certificate and all of the foregoing (including each such Certificate
of Incorporation and By-Laws) shall be reasonably acceptable to the
Agent.
(B) On the Restatement Effective Date, all corporate and
legal proceedings and all instruments and agreements in connection
with the transactions contemplated by this Agreement and the other
Credit Documents shall be reasonably satisfactory in form and
substance to the Agent, and the Agent shall
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have received all information and copies of all certificates,
documents and papers, including good standing certificates and any
other records of corporate proceedings and governmental approvals, if
any, which the Agent reasonably may have requested in connection
therewith, such documents and papers, where appropriate, to be
certified by proper corporate or governmental authorities.
(f) Original Credit Agreement. On the Restatement Effective
Date and concurrently with the initial Borrowing hereunder, the
Borrower shall have (i) repaid in full the outstanding principal
amount of all Loans under and as defined in the Original Credit
Agreement, (ii) terminated all letters of credit issued thereunder
(other than Existing Letters of Credit) and (iii) paid all accrued but
unpaid interest and fees under the Original Credit Agreement, whether
or not otherwise then due and payable.
(g) Solvency. On the Restatement Effective Date, the Agent
shall have received from the chief financial officer of the Borrower a
certificate in the form of Exhibit F hereto, expressing opinions of
value and other appropriate facts or information regarding the
solvency of the Borrower and its Subsidiaries taken as a whole.
(h) Adverse Change, etc. From December 31, 1995 to the
Restatement Effective Date, nothing shall have occurred (and neither
the Required Banks nor the Agent shall have become aware of any facts
or conditions not previously known) which the Required Banks or the
Agent shall determine (a) has, or is reasonably likely to have, a
material adverse effect on the rights or remedies of the Banks or the
Agent under the Credit Documents or on the ability of the Credit
Parties in the aggregate to perform their obligations to them under
the Credit Documents or (b) has, or is reasonably likely to have, a
Material Adverse Effect.
(i) Litigation. On the Restatement Effective Date there shall
be no actions, suits or proceedings pending or threatened (a) with
respect to this Agreement or any other Credit Document or (b) which
the Agent or the Required Banks shall reasonably determine has or is
reasonably likely to have, (i) a Material Adverse Effect or (ii) a
material adverse effect on the rights or remedies of the Banks or the
Agent under the Credit Documents or on the ability of the Credit
Parties in the aggregate to perform their obligations to them under
the Credit Documents.
(j) Subsidiary Guaranty. On the Restatement Effective Date,
each Domestic Subsidiary (other than a Clarke Entity) that is party to
a Subsidiary Guaranty Agreement under and as defined in the Original
Credit Agreement shall have duly authorized, executed and delivered an
amendment thereto reasonably
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satisfactory to the Agent to give effect to this Agreement (such
Subsidiary Guaranty Agreements as so amended and as they may be
subsequently modified, amended or supplemented from time to time in
accordance with the terms hereof and thereof, the "Subsidiary
Guaranty"), and the Subsidiary Guaranty shall be in full force and
effect.
(k) Security Documents. (A) On the Restatement Effective
Date, the Borrower and each Domestic Subsidiary (other than a Clarke
Entity) that is party to a Pledge Agreement under and as defined in
the Original Credit Agreement shall have duly authorized, executed and
delivered an amendment thereto reasonably satisfactory to the Agent to
give effect to this Agreement (such Pledge Agreements as so modified
and as they may be subsequently modified, amended or supplemented from
time to time in accordance with the terms thereof and hereof, the
"Pledge Agreements"), and the Pledge Agreements shall be in full force
and effect.
(B) On the Restatement Effective Date, the Borrower and each
Domestic Subsidiary (other than a Clarke Entity) that is party to a
Security Agreement under and as defined in the Original Credit
Agreement shall have duly authorized, executed and delivered an
amendment thereto satisfactory to the Agent to give effect to this
Agreement (such Security Agreements as so modified and as they may be
subsequently modified, supplemented or amended from time to time, the
"Security Agreements") covering all of such Credit Party's present and
future Security Agreement Collateral, in each case together with:
(1) executed copies of Financing Statements (Form
UCC-1) in appropriate form for filing under the UCC of
each jurisdiction, if any, as may be necessary to perfect,
or to continue the perfection of, the security interests
purported to be created by the Security Agreements, as the
case may be;
(2) copies of all financing statements as filed in
each jurisdiction referred to in (1) above that name each
Credit Party as debtor, and the Collateral Agent as the
secured party, it being understood that in the event the
Borrower is unable to provide the Agent with a copy of any
such financing statement, the Borrower shall provide the
Agent with certified copies of Requests for Information or
Copies (Form UCC-11), or equivalent reports, each of
recent date listing each such effective financing
statement, together with a copy of such financing
statement, no later than 60 days after the Restatement
Effective Date.
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(3) evidence of the completion of all other
recordings and filings of, or with respect to, the
Security Agreement as may be necessary or, in the
reasonable opinion of the Collateral Agent, necessary to
perfect the security interests intended to be created by
the Security Agreement; and
(4) evidence that all other actions necessary or, in
the reasonable opinion of the Collateral Agent, necessary
to perfect and protect the security interests purported to
be created by the Security Agreement have been taken.
(l) Mortgages; Title Insurance; etc. On the Restatement
Effective Date, the Collateral Agent shall have received fully
executed counterparts of amendments to (or, at the request of the
Collateral Agent, amendments and restatements of) each of the Existing
Mortgages (the "Mortgage Amendments") in each case reasonably
satisfactory to the Agent, to give effect to this Agreement, together
with evidence that counterparts of each of the Mortgage Amendments
have been delivered to the title company insuring the Lien on the
related Existing Mortgages for recording in all places to the extent
necessary, in the reasonable judgment of the Collateral Agent,
effectively to maintain a valid and enforceable first priority
mortgage lien on the Existing Mortgaged Properties in favor of the
Collateral Agent, and the Collateral Agent shall have received either
endorsements to the existing Mortgage Policies or new Mortgage
Policies assuring the Collateral Agent that each Existing Mortgage, as
so amended, is a valid and enforceable first priority mortgage lien on
the respective Existing Mortgaged Properties, free and clear of all
defects and encumbrances except Permitted Encumbrances.
(m) Payment of Fees. On the Restatement Effective Date, all
costs, fees and expenses, and all other compensation contemplated by
this Agreement due to the Agent or the Banks (including, without
limitation, reasonable legal fees and expenses) shall have been paid
to the extent due.
(n) Consent Letter. On the Restatement Effective Date, the
Agent shall be satisfied that CT Corporation System has consented to
its appointment by each Credit Party as its agent to receive service
of process.
5.02 Conditions Precedent to Each Credit Event. The obligation
of each Bank to make each Loan hereunder, and the obligation of the Letter of
Credit Issuer to issue each Letter of Credit hereunder, is subject, at the time
of each such Credit Event, to the satisfaction of the following conditions:
(a) Effectiveness. The Restatement Effective Date shall have
occurred.
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(b) No Default; Representations and Warranties. At the time of
each Credit Event and also after giving effect thereto (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein and in the other Credit Documents in
effect at such time shall be true and correct in all material respects
with the same effect as though such representations and warranties had
been made on and as of the date of such Credit Event, unless stated to
relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as
of such earlier date.
(c) Notice of Borrowing; Letter of Credit Request. The Agent
shall have received a Notice of Borrowing satisfying the requirements
of Section 1.03 with respect to each incurrence of Loans and the Agent
and the Letter of Credit Issuer shall have received a Letter of Credit
Request satisfying the requirements of Section 2.02 with respect to
each issuance of a Letter of Credit.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by the Borrower to each of
the Banks that all of the applicable conditions specified above exist
as of the date of such Credit Event. All of the certificates, legal
opinions and other documents and papers referred to in Section 5.01,
unless otherwise specified, shall be delivered to the Agent at its
Notice Office for the account of each of the Banks and, except for the
Notes, in sufficient counterparts for each of the Banks and shall be
reasonably satisfactory in form and substance to the Agent.
SECTION 6. Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the Loans
and issue and/or participate in the Letters of Credit provided for herein, the
Borrower makes the following representations, warranties and agreements as to
itself and as to each of its Subsidiaries with the Banks, all of which shall
survive the execution and delivery of this Agreement, the making of the Loans
and the issuance of the Letters of Credit.
6.01 Corporate Status. Each of the Borrower and each of its
Subsidiaries (i) is a duly organized and validly existing corporation and is in
good standing, in each case under the laws of the jurisdiction of its
organization, and has the power and authority to own its property and assets
and to transact the business in which it is engaged and presently proposes to
engage and (ii) is duly qualified and is authorized to do business and is in
good standing in all jurisdictions where it is required to be so qualified and
where the failure to be so qualified would have a Material Adverse Effect.
6.02 Power and Authority. Each Credit Party has the corporate
power and authority to execute, deliver and carry out the terms and provisions
of the Credit
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Documents to which it is a party and has taken all necessary corporate action
to authorize the execution, delivery and performance of the Credit Documents to
which it is a party. Each Credit Party has duly executed and delivered each
Credit Document to which it is a party and each such Credit Document
constitutes the legal, valid and binding obligation of such Credit Party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws generally affecting creditors'
rights and by equitable principles (regardless of whether enforcement is sought
in equity or at law).
6.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Credit Documents to which it is a party
nor compliance by them with the terms and provisions thereof, nor the
consummation of the transactions contemplated therein, (i) will contravene any
applicable provision of any law, statute, rule or regulation, or any order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
will conflict or be inconsistent with or result in any breach of, any of the
terms, covenants, conditions or provisions of, or constitute a default under,
or (other than pursuant to the Security Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
material property or assets of such Credit Party pursuant to the terms of any
indenture, mortgage, deed of trust, agreement or other instrument to which such
Credit Party is a party or by which it or any of its property or assets are
bound or to which it may be subject or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws, as the case may be, of such Credit
Party.
6.04 Litigation. Except as disclosed on Annex X hereto, there
are no actions, suits or proceedings pending or, to the knowledge of Borrower,
threatened, with respect to the Borrower or any of its Subsidiaries (i) that
have, or that are reasonably likely to have, a Material Adverse Effect or (ii)
that have, or that are reasonably likely to have, a material adverse effect on
the rights or remedies of the Banks or on the ability of the Credit Parties in
the aggregate to perform their obligations to the Banks under the Credit
Documents.
6.05 Use of Proceeds; Margin Regulations. (a) The proceeds of
all Loans shall be utilized (i) on the Restatement Effective Date, to effect
the refinancing of all Indebtedness under the Original Credit Agreement and to
pay certain fees and expenses related thereto and (ii) for the general
corporate and working capital purposes of the Borrower and its Subsidiaries.
(b) Neither the making of any Loan hereunder, nor the use of
the proceeds thereof, will violate the provisions of Regulation G, T, U or X of
the Board of Governors of the Federal Reserve System and no part of the
proceeds of any Loan will be used to purchase or carry any Margin Stock or to
extend credit for the purpose of purchasing or carrying any Margin Stock.
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6.06 Governmental Approvals. Except for those duly obtained or
made, no order, consent, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, any foreign or
domestic governmental or public body or authority, or any subdivision thereof,
is required to authorize or is required in connection with (i) the execution,
delivery and performance of any Credit Document or (ii) the legality, validity,
binding effect or enforceability of any Credit Document.
6.07 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
6.08 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company," or a "subsidiary company"
of a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.09 True and Complete Disclosure. All factual information
(taken as a whole) heretofore or contemporaneously furnished by or on behalf of
any Credit Party in writing to the Agent for purposes of or in connection with
this Agreement or any transaction contemplated herein is, and all other such
factual information (taken as a whole) hereafter furnished by or on behalf of
any such Credit Party in writing to any Bank will be, true and accurate in all
material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any material fact necessary
to make such information (taken as a whole) not misleading at such time in
light of the circumstances under which such information was provided.
6.10 Financial Condition; Financial Statements. (a) On and as
of the Restatement Effective Date, on a pro forma basis after giving effect to
all Indebtedness incurred, and to be incurred, and Liens created, and to be
created, by each Credit Party in connection therewith, and with respect to the
Borrower and the Subsidiary Guarantors taken as a whole (x) the sum of their
assets, at a fair valuation, will exceed their debts, (y) they have not
incurred nor intend to, nor believe that they will, incur debts beyond their
ability to pay such debts as such debts mature and (z) they will have
sufficient capital with which to conduct their business. For purposes of this
Section 6.10, "debt" means any liability on a claim, and "claim" means (i)
right to payment whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured; or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
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(b) The consolidated balance sheets of the Borrower at
December 31, 1995 and the related consolidated statements of operations and
cash flows of the Borrower for the fiscal year ended as of said date, which, in
the case of the December 31, 1995 statements, have been examined by Ernst &
Young LLP, independent certified public accountants, and the pro forma (after
giving effect to all Investments consummated prior to the Effective Date and to
the Clarke Sale) consolidated balance sheet of the Borrower and its
Subsidiaries as of March 31, 1996 copies of which have heretofore been
furnished to each Bank, present fairly the financial position of the Borrower
and its Subsidiaries at the dates of said statements and the results for the
periods covered thereby (or, in the case of the pro forma balance sheet,
present a good faith estimate of the consolidated pro forma financial condition
of the Borrower and its Subsidiaries at the date thereof). All such financial
statements (other than the aforesaid pro forma balance sheet) have been
prepared in accordance with GAAP consistently applied except to the extent
provided in the notes to said financial statements.
(c) Nothing has occurred since December 31, 1995 that has had
or is reasonably likely to have a Material Adverse Effect.
(d) Except as fully reflected in the financial statements
described in Section 6.10(b) or in the footnotes thereto and the Indebtedness
incurred under this Agreement, there were as of the Restatement Effective Date
(and after giving effect to any Loans made on such date), no material
Guaranties, contingent liability or liability for taxes or any long-term lease
or unusual forward or long-term commitment, including interest rate or currency
swap or exchange transactions, or with respect to the Borrower or any of its
Subsidiaries which either individually or in the aggregate would be material to
the Borrower and its Subsidiaries taken as a whole, except as incurred in the
ordinary course of business consistent with past practices or as otherwise
permitted hereunder subsequent to December 31, 1995. Neither the Borrower nor
any Subsidiary is a party to or bound by any Contract or Applicable Law,
compliance with which is reasonably likely to have a Material Adverse Effect.
6.11 Security Interests. On or after the Restatement Effective
Date, each of the Security Documents creates, as security for the Obligations,
a valid and enforceable perfected security interest in and Lien on all of the
Collateral subject thereto, superior to and prior to the rights of all third
Persons and subject to no other Liens (except that the Security Agreement
Collateral and/or Real Property may be subject to the security interests
evidenced by Permitted Liens and Permitted Encumbrances relating thereto) in
favor of the Collateral Agent. No filings or recordings are required in order
to perfect the security interests created under any Security Document except
for filings or recordings required in connection with any such Security
Document which shall have been made, or provided for as contemplated by Section
5 hereof, on or prior to the Restatement Effective Date or, if later, the date
of the execution and delivery thereof.
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6.12 Tax Returns and Payments. Each of the Borrower and each
of its Subsidiaries has timely filed or caused to be timely filed, on the due
dates thereof or within applicable grace periods, with the appropriate taxing
authority all federal income tax returns and all other material tax returns,
domestic and foreign, required to be filed by it and has paid all material
taxes and assessments payable by it which have become due and payable, except
for those contested in good faith for which adequate reserves have been
established in accordance with Generally Accepted Accounting Principles. Except
as disclosed in Annex XV hereto there is no material action, suit, proceeding,
investigation, audit or claim now pending, or, to the best knowledge of the
Borrower, threatened by any authority regarding any taxes relating to the
Borrower. Except as set forth on Annex XV, the Borrower has not entered into
any agreement or waiver or been requested to enter into any agreement or waiver
extending any statute of limitations relating to the payment or collection of
taxes of the Borrower or is aware of any circumstance that would cause the
taxable years or other taxable periods of the Borrower not to be subject to the
normally applicable statute of limitations.
6.13 Compliance with ERISA. (i) Annex XI sets forth each Plan;
each Plan (and each related trust, insurance contract or fund) is in
substantial compliance with its terms and with all applicable laws, including
without limitation ERISA and the Code; each Plan (and each related trust, if
any) which is intended to be qualified under Section 401(a) of the Code has
received a determination letter from the Internal Revenue Service to the effect
that it meets the requirements of Sections 401(a) and 501(a) of the Code; no
Reportable Event has occurred; no Plan which is a multiemployer plan (as
defined in Section 4001(a)(3) of ERISA) is insolvent or in reorganization; no
Plan subject to Title IV has an Unfunded Current Liability which, when
aggregated with all other Plans subject to Title IV which have Unfunded Current
Liabilities, exceeds $5,000,000 (except as disclosed in Annex XI); no Plan
which is subject to Section 412 of the Code or Section 302 of ERISA has an
accumulated funding deficiency, within the meaning of such sections of the Code
or ERISA, or has applied for or received a waiver of an accumulated funding
deficiency or an extension of any amortization period, within the meaning of
Section 412 of the Code or Section 303 or 304 of ERISA; all contributions
required to be made with respect to a Plan have been timely made; neither the
Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate has
incurred any material liability (including any indirect, contingent or
secondary liability) to or on account of a Plan pursuant to Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any such
liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate of incurring a liability to
or on account of a Plan pursuant to the foregoing provisions of ERISA and the
Code; no proceedings have been instituted to terminate or appoint a trustee to
administer any Plan which is subject to Title IV of ERISA; no action, suit,
proceeding, hearing, audit or investigation with respect to the administration,
operation or
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the investment of assets of any Plan (other than routine claims for benefits)
is pending, expected or threatened; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the
aggregate liabilities of the Borrower and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of the
close of the most recent fiscal year of each such Plan ended prior to the date
of the most recent Credit Event, would not exceed $250,000; each group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code)
which covers or has covered employees or former employees of the Borrower, any
Subsidiary of the Borrower, or any ERISA Affiliate has at all times been
operated in compliance with the provisions of Part 6 of subtitle B of Title I
of ERISA and Section 4980B of the Code; no lien imposed under the Code or ERISA
on the assets of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate exists or is likely to arise on account of any Plan; and the Borrower
and its Subsidiaries do not maintain or contribute to any employee welfare
benefit plan (as defined in Section 3(1) of ERISA) which provides benefits to
retired employees or former employees (other than as required by Section 601 of
ERISA) or any Plan the obligations with respect to which could reasonably be
expected to have a material adverse effect on the ability of the Company to
perform its obligations under this Agreement.
6.14 Ownership; Subsidiaries. On the Restatement Effective
Date, the corporations listed on Annex V are the only Subsidiaries of the
Borrower. Annex V correctly sets forth, as of the Restatement Effective Date,
the percentage ownership (direct and indirect) of the Borrower in each class of
capital stock of each of its Subsidiaries and also identifies the direct owner
thereof. As of the Restatement Effective Date, the Borrower owns, directly or
indirectly, 100% of the capital stock of each Domestic Subsidiary.
6.15 Intellectual Property. The Borrower and each of its
Subsidiaries owns or holds a valid license to use all the patents, trademarks,
permits, service marks, trade names, technology, know-how, copyrights,
licenses, franchises and formulas or rights with respect to the foregoing, that
are used in the operation of the business of the Borrower and its Subsidiaries
as presently conducted and as proposed to be conducted and are material to such
business except those where the failure to do so would not reasonably be
expected to have a Material Adverse Effect.
6.16 Environmental Matters. (a) The Borrower and each of its
Subsidiaries are in compliance with all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There are no
pending or, to the best knowledge of the Borrower, past or threatened
Environmental Claims against the Borrower or any of its Subsidiaries or any
Real Property at any time owned, leased or operated by the Borrower or any of
its Subsidiaries that individually or in the aggregate
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would reasonably be expected to have a Material Adverse Effect. There are no
facts, circumstances, conditions or occurrences on any Real Property at any
time owned, leased or operated by the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, on any property adjoining or in the
vicinity of any such Real Property that would reasonably be expected (i) to
form the basis of an Environmental Claim against the Borrower or any of its
Subsidiaries or any currently owned Real Property of the Borrower or any of its
Subsidiaries that individually or in the aggregate would reasonably be expected
to have a Material Adverse Effect or (ii) to cause any such currently owned
Real Property to be subject to any restrictions on the ownership, occupancy,
use or transferability of such Real Property by the Borrower or any of its
Subsidiaries under any applicable Environmental Law, which would interfere with
the current use of such real property.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, transported to or from, or Released on or from any
Real Property at any time owned, leased or operated by the Borrower or any of
its Subsidiaries where such generation, use, treatment or storage has violated
or given rise to a liability under or would reasonably be expected to violate
or give rise to liability under any Environmental Law except for limited
quantities of Hazardous Materials used or stored at any Real Property in
material compliance with all applicable Environmental Laws and required in
connection with the normal operation and maintenance of such property. There
are not now any underground storage tanks located on any Real Property owned,
leased or operated by the Borrower or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section
6.16, the representations made in this Section 6.16 shall only be untrue if the
aggregate effect of all failures, noncompliance, Environmental Claims,
Hazardous Materials, Releases and presence of underground storage tanks, in
each case of the types described above, would reasonably be expected to have a
Material Adverse Effect.
6.17 Real Properties. All Real Property owned or leased by the
Borrower or any of its Subsidiaries as of the Restatement Effective Date, and
the nature of the interest therein, is correctly set forth in Annex VI The
Borrower and each of its Subsidiaries has (a) good and marketable title to all
material properties owned by it, including all Real Property reflected in Annex
VI, free and clear of all Liens other than Permitted Encumbrances, and (b) a
validly subsisting leasehold interest in all material properties leased by it.
6.18 Labor Relations. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a Material Adverse Effect. There is (i) no unfair labor
practice complaint pending against the Borrower or any of its Subsidiaries or,
to the best knowledge of the Borrower, threatened against any of them, before
the National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under any collective bargaining agreement is so pending
against the Borrower or any of its Subsidiaries or, to the best knowledge of
the Borrower, threatened
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against any of them, (ii) no strike, labor dispute, slowdown or stoppage
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries and (iii) to the best knowledge of the Borrower, no union
representation question existing with respect to the employees of the Borrower
or any of its Subsidiaries and, to the best knowledge of the Borrower, no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
6.19 Subordination. The subordination provisions contained in
the Subordinated Notes Indenture are enforceable against the Borrower and the
holders of the respective securities issued thereunder, and all Obligations
shall be within the definition of "Senior Indebtedness" for purposes of the
subordination provisions contained in the Subordinated Indenture.
6.20 Ownership of Foreign Assets. Neither the Borrower nor any
Domestic Subsidiary has an ownership interest in any lease (including without
limitation, any Leasehold), assets or other property (other than Capital
Securities of a Foreign Subsidiary) located outside the United States, except
as provided in Annex XIV.
6.21 Existing Indebtedness. Annex VIII sets forth a true and
complete list of all Indebtedness of the Borrower and its Subsidiaries as of
the Restatement Effective Date and which is to remain outstanding after giving
effect to the incurrence of Loans on such date (all such Indebtedness, the
"Existing Indebtedness"), in each case showing the aggregate principal amount
thereof and the name of the respective borrower and any other entity which
directly or indirectly guaranteed such debt.
SECTION 7. Affirmative Covenants. The Borrower hereby
covenants and agrees that on the Restatement Effective Date and thereafter, for
so long as this Agreement is in effect and until the Commitments have
terminated, no Letters of Credit or Notes are outstanding and the Loans and
Unpaid Drawings, together with interest, Fees and all other Obligations (other
than any indemnities described in Section 12.13 hereof which are not then due
and payable) incurred hereunder, are paid in full:
7.01 Information Covenants. The Borrower will furnish to each
Bank:
(a) Annual Financial Statements. Within 105 days after the
close of each fiscal year of the Borrower, the consolidated and
consolidating balance sheet of
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the Borrower and its Subsidiaries as at the end of such fiscal year
and the related consolidated and consolidating statements of income
and consolidated statements of stockholders' equity and of cash flows
for such fiscal year and setting forth comparative figures for the
preceding fiscal year and comparable budgeted figures for such fiscal
year and certified by the chief financial officer or other Authorized
Officer of the Borrower that such statements fairly present the
financial condition of the Borrower and its Subsidiaries, as of the
dates indicated and the results of their operations and changes in
their cash flows for the periods indicated and in the case of such
consolidated financial information, examined by Ernst & Young LLP or
such other independent certified public accountants of recognized
national standing as shall be acceptable to the Agent, whose opinion
shall not be qualified as to the scope of audit or as to the status of
the Borrower and its Subsidiaries as a going concern, together with a
certificate of such accounting firm stating that in the course of its
regular audit of the business of the Borrower and its Subsidiaries,
which audit was conducted in accordance with generally accepted
auditing standards, no Default or Event of Default which has occurred
and is continuing has come to their attention or, if such a Default or
Event of Default has come to their attention a statement as to the
nature thereof.
(b) Quarterly Financial Statements. Within 45 days after the
close of each of the first three quarterly accounting periods in each
fiscal year of the Borrower, the unaudited consolidated and
consolidating balance sheet of the Borrower and its Subsidiaries as at
the end of such quarterly period and the related unaudited
consolidated and consolidating statements of income and unaudited
consolidated statements of stockholders' equity and of cash flows for
such quarterly period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly period, setting forth, in
each case (except for the consolidating statements), in comparative
form the figures for the budget for the then current fiscal year and
figures for the corresponding periods of the previous fiscal year; all
of which shall be in reasonable detail and certified by the chief
financial officer or other Authorized Officer of the Borrower that
they fairly present the financial condition of the Borrower and its
Subsidiaries as of the dates indicated and the results of their
operations and changes in their cash flows for the periods indicated,
subject to normal year-end audit adjustments.
(c) Monthly Financial Statements. Within (i) 30 days after the
end of each calendar month which is not also the end of a calendar
quarter and (ii) 45 days after the end of each calendar month which is
also the end of a calendar quarter, the unaudited consolidated balance
sheet of the Borrower and the Subsidiaries as of the end of such
month, and the related unaudited consolidated statements of income and
retained earnings and cash flows and product line statements for such
month and for the portion of the fiscal year ended at the end
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of such month, setting forth, in each case, in comparative form the
figures for the budget for the then current fiscal year and the
figures for the corresponding periods of the previous fiscal year.
(d) Budgets, etc. Not more than 45 days after the commencement
of each fiscal year of the Borrower, a project consolidated balance
sheet and projected consolidated budgets, business plans and financial
projections of the Borrower and its Subsidiaries in reasonable detail
for each of the four fiscal quarters of such fiscal year, setting
forth, with appropriate discussion, the principal assumptions upon
which such projected balance sheets and budgets are based and any
other projection information reasonably requested by the Required
Banks.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 7.01(a) and (b), a
certificate of an Authorized Officer of the Borrower to the effect
that no Default or Event of Default exists or, if any Default or Event
of Default does exist, specifying the nature and extent thereof, which
certificate shall set forth the calculations required to establish
whether the Borrower and its Subsidiaries were in compliance with the
provisions of Sections 8.14 through and including 8.16, as at the end
of such fiscal quarter or year, as the case may be.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after any officer of the Borrower or
any of its Subsidiaries obtains knowledge thereof, notice of (x) the
occurrence of any event which constitutes a Default or Event of
Default, which notice shall specify the nature thereof, the period of
existence thereof and what action the Borrower proposes to take with
respect thereto and (y) the commencement of, or threat of, or any
significant development in, any litigation or governmental proceeding
pending against the Borrower or any of its Subsidiaries which is
likely to have a Material Adverse Effect.
(g) Auditors' Reports. Promptly upon receipt thereof, a copy
of each final "management letter" submitted to the Borrower or any of
its Subsidiaries by its independent accountants in connection with any
annual, interim or special audit made by them of the books of the
Borrower or any of its Subsidiaries.
(h) Environmental Matters. Promptly after obtaining knowledge
of any of the following, written notice of, but in no event later than
10 business days after obtaining knowledge or notice of any of the
following conditions:
(i) Any pending or threatened material Environmental
Claim against the Borrower or any of its Subsidiaries or any
Real Property;
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(ii) Any condition or occurrence on any Real Property
that (x) results in material noncompliance by the Borrower or
any of its Subsidiaries with any applicable Environmental Law,
or (y) could reasonably be anticipated to form the basis of a
material Environmental Claim against the Borrower or any of its
Subsidiaries or any Real Property;
(iii) Any condition or occurrence on any Real Property
that could reasonably be anticipated to cause such Real
Property to be subject to any restrictions on the ownership,
occupancy, use or transferability by the Borrower or its
Subsidiary, as the case may be, of its interest in such Real
Property under any Environmental Law;
(iv) The taking of any material removal or remedial
action in response to the actual or alleged presence of any
Hazardous Material on any Real Property;
(v) Any notice that the Borrower or any Subsidiary is
subject to investigation by any governmental authority or other
party evaluating whether any remedial action is needed to
respond to the release or threatened release of any Hazardous
Materials into the environment;
(vi) Any activities involving material Capital
Expenditures that are undertaken as a result of new
Environmental Laws or proposed changes to any existing
Environmental Law; and
(vii) Any proposed acquisition of stock, assets, real
estate or leasing of property, or any other action by the
Borrower or any of its Subsidiaries, that could reasonably be
expected to subject the Borrower or any of its Subsidiaries to
material environmental liability.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action and the Borrower's response thereto. In addition, the Borrower
agrees to provide the Banks with copies of all material communications
with any government or governmental agency relating to Environmental
Laws, all material communications with any person relating to
Environmental Claims, and such detailed reports of any Environmental
Claim as may reasonably be requested by the Agent or the Required
Banks.
(i) Subsidiaries. (x) Prompt notice of the acquisition or
formation of a new Subsidiary and, in the case of each such new
Subsidiary, its name, jurisdiction of incorporation, the percentages
of the various classes of its Capital
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Securities owned by the Borrower or another Subsidiary and (y) prompt
notice of any change in the name of any Subsidiary, its jurisdiction
of incorporation, the percentages of the various classes of its
Capital Securities owned by the Borrower or another Subsidiary.
(j) Material Adverse Effect. Prompt notice of the occurrence
or nonoccurrence of any event or change, the occurrence or
nonoccurrence of which has had or is reasonably likely to have, either
alone or in conjunction with all other such occurrences or
nonoccurrence, a Material Adverse Effect.
(k) Collateral. Prompt notice of any matter or event that has
had, or may have, a material adverse effect on Collateral having an
aggregate net book value in excess of $2,500,000.
(l) Other Information. Promptly upon transmission thereof,
copies of any filings and registrations with, and reports to, the SEC
by the Borrower or any of its Subsidiaries and copies of all financial
statements, proxy statements, notices and reports as the Borrower or
any of its Subsidiaries shall send to the holders of their publicly
held capital stock and/or Indebtedness (in each case to the extent not
theretofore delivered to the Banks pursuant to this Agreement) and,
with reasonable promptness, such other information or documents
(financial or otherwise) as the Agent on its own behalf or on behalf
of the Required Banks may reasonably request from time to time.
7.02 Books, Records and Inspections. The Borrower will, and
will cause each of its Subsidiaries to permit, upon written notice to the chief
financial officer or other Authorized Officer of the Borrower, officers and
designated representatives of the Agent or the Required Banks to visit and
inspect, during regular business hours and under guidance of officers of
Borrower or its Subsidiaries (as the case may be), any of the properties or
assets of the Borrower and any of its Subsidiaries in whomsoever's possession
(to the extent within the power of the Borrower or such Subsidiary to do so),
and to examine the books of account of the Borrower and any of its Subsidiaries
and discuss the affairs, finances and accounts of the Borrower and of any of
its Subsidiaries with, and be advised as to the same by, their officers and
independent accountants, all at such reasonable times and intervals and to such
reasonable extent as the Agent or the Required Banks may reasonably request.
7.03 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance with
reputable and solvent insurers in such amounts, covering such risks and
liabilities and with such deductibles or self-insured retentions as are in
accordance and consistent with normal industry practice. At any time that
insurance at the levels described in Annex IV is not being
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maintained by the Borrower and its Subsidiaries, the Borrower will notify the
Banks in writing thereof and, if thereafter notified by the Agent to do so, the
Borrower will obtain insurance at such levels at least equal to those set forth
in Annex IV to the extent then generally available or otherwise as are
reasonably acceptable to the Agent. The Borrower will furnish on the
Restatement Effective Date and annually thereafter to the Agent a summary of
the insurance carried in respect of the Borrower and its Subsidiaries and the
assets of the Borrower and its Subsidiaries together with certificates of
insurance and other evidence of such insurance, if any, naming the Collateral
Agent as an additional insured and/or loss payee, to the extent of its
interests therein.
7.04 Payment of Taxes. The Borrower will pay and discharge,
and will cause each of its Subsidiaries to pay and discharge, all material
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any material properties belonging to it, prior
to the date on which material penalties attach thereto, and all lawful claims
for sums that have become due and payable which, if unpaid, might become a Lien
not otherwise permitted under Section 8.03(a); provided, that neither the
Borrower nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and by
proper proceedings if it has maintained adequate reserves with respect thereto
in accordance with GAAP.
7.05 Corporate Franchises. The Borrower will do, and will
cause each of its Subsidiaries to do, or cause to be done, all things necessary
to preserve and keep in full force and effect its existence and its material
rights, franchises and authority to do business; provided, however, that any
transaction permitted by Section 8.04 will not constitute a breach of this
Section 7.05.
7.06 Compliance with Laws, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable laws, statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property other than those the non-compliance
with which would not have a Material Adverse Effect.
7.07 Good Repair. The Borrower will, and will cause each of
its Subsidiaries to, ensure that its material properties and equipment used or
useful in its business are kept in good repair, working order and condition,
normal wear and tear excepted, and, subject to Section 8.05, that from time to
time there are made in such properties and equipment all needful and proper
repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto, to the extent and in the manner useful or customary for
companies in similar businesses.
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7.08 Compliance with Environmental Laws. (a) The Borrower (i)
will pay, and will cause each of its Subsidiaries to pay, all costs and
expenses incurred by it in keeping in material compliance with all
Environmental Laws, and will keep or cause to be kept all Real Properties free
and clear of any material Liens imposed pursuant to such Environmental Laws and
(ii) will comply, and will cause each of its Subsidiaries to comply in all
material respects, with all Environmental Laws applicable to the operation of
their business and the ownership or use of any Real Property; and (b) neither
the Borrower nor any of its Subsidiaries will generate, use, treat, store,
release or dispose of, or permit the generation, use, treatment, storage,
release or disposal of, Hazardous Materials on any Real Property, or transport
or permit the transportation of Hazardous Materials to or from any such Real
Property, unless the failure to comply with the requirements specified in
clause (a) or (b) above, either individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. If the Borrower or
any of its Subsidiaries, or any tenant or occupant of any Real Property, causes
or permits any intentional or unintentional act or omission resulting in the
presence or release of any Hazardous Material (except in compliance with
applicable Environmental Laws), the Borrower agrees to undertake, and/or to
cause any of its Subsidiaries, tenants or occupants to undertake, at their sole
expense, any clean up, removal, remedial or other action required pursuant to
Environmental Laws to remove and clean up any Hazardous Materials from any Real
Property; provided that neither the Borrower nor any of its Subsidiaries shall
be required to comply with any such order or directive which is being contested
in good faith and by proper proceedings so long as it has maintained adequate
reserves with respect to such compliance to the extent required in accordance
with GAAP.
7.09 ERISA. As soon as possible and, in any event, within ten
(10) days after the Borrower, any Subsidiary of the Borrower or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the
following, the Borrower will deliver to each of the Banks a certificate of the
chief financial officer of the Borrower setting forth the full details as to
such occurrence and the action, if any, that the Borrower, such Subsidiary or
such ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Borrower, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred; that
an accumulated funding deficiency, within the meaning of Section 412 of the
Code or Section 302 of ERISA, has been incurred or an application may be or has
been made for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code or Section 303 or 304 of
ERISA with respect to a Plan; that any contribution required to be made with
respect to a Plan or Foreign Pension Plan has not been timely made; that a Plan
has been or may be terminated, reorganized, partitioned or declared insolvent
under Title IV of ERISA; that a Plan subject to Title IV has an Unfunded
Current Liability which, when aggregated with all other Plans subject to Title
IV which have Unfunded Current Liabilities, exceeds
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$5,000,000; that proceedings may be or have been instituted to terminate or
appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate will or is reasonably likely to incur
any material liability to or on account of the termination of or withdrawal
from a Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA
or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of the
Code or Section 409 or 502(i) or 502(l) of ERISA or with respect to a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
the Code) under Section 4980B of the Code; or that the Borrower or any
Subsidiary of the Borrower may incur any material liability pursuant to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any Plan. The Borrower will deliver to
each of the Banks a complete copy of the annual report (on Internal Revenue
Service Form 5500-series) of each Plan (including, to the extent required, the
related financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed
with the Internal Revenue Service. In addition to any certificates or notices
delivered to the Banks pursuant to the first sentence hereof, copies of annual
reports and any material notices received by the Borrower, any Subsidiary of
the Borrower or any ERISA Affiliate with respect to any Plan or Foreign Pension
Plan shall be delivered to the Banks no later than ten (10) days after the date
such report has been filed with the Internal Revenue Service or such notice has
been received by the Borrower, the Subsidiary or the ERISA Affiliate, as
applicable.
7.10 End of Fiscal Years; Fiscal Quarters. The Borrower will,
for financial reporting purposes, cause (i) each of its, and each of its
Subsidiaries', fiscal years and fourth fiscal quarters to end on December 31 of
each year and (ii) each of its, and each of its Subsidiaries', first three
fiscal quarters to end on March 31, June 30 and September 30 of each year.
7.11 Additional Security; Further Assurances. (a) The Borrower
will, and will cause each of its Domestic Subsidiaries to, grant to the
Collateral Agent Liens on such assets and properties of the Borrower and its
Domestic Subsidiaries acquired after the Restatement Effective Date that are
not covered by the Security Documents, and that may be reasonably requested
from time to time by the Agent or the Required Banks (collectively, the
"Additional Security Documents") provided that no such Liens shall be required
to be created in respect of any interest in newly acquired Real Property unless
such Real Property has a fair market value of more than $1,000,000. In addition
and without the necessity of any request by the Agent or Required Banks, each
Domestic Subsidiary created after the Restatement Effective Date (or that,
after such date, first acquires a Subsidiary or first becomes a Material
Subsidiary) will if, but only if, (x) it is a Material Subsidiary or it has a
Subsidiary, execute and deliver to the Agent a
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counterpart of the Subsidiary Guaranty, (y) it has any Domestic Subsidiary or
any Foreign Subsidiary, execute and deliver to the Collateral Agent a
counterpart of a Domestic Subsidiary Pledge Agreement or a Foreign Subsidiary
Pledge Agreement, respectively, and/or (z) it is a Material Subsidiary, execute
and deliver to the Collateral Agent a counterpart of a Security Agreement. All
such security interests and mortgages shall be granted pursuant to
documentation reasonably satisfactory in form and substance to the Agent and
shall constitute valid and enforceable perfected Liens superior to and prior to
the rights of all third Persons and subject to no other Liens except for
Permitted Liens and Permitted Encumbrances. The Additional Security Documents
or instruments related thereto shall have been duly recorded or filed in such
manner and in such places as are required by law to establish, perfect,
preserve and protect the Liens in favor of the Collateral Agent required to be
granted pursuant to the Additional Security Documents and all taxes, fees and
other charges payable in connection therewith shall have been paid in full.
(b) The Borrower will, and will cause each of its Domestic
Subsidiaries to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require. Furthermore, the
Borrower shall cause to be delivered to the Collateral Agent such opinions of
counsel, title insurance and other related documents as may be reasonably
requested by the Agent to assure themselves that this Section 7.11 has been
complied with, including opinions of counsel to the effect that the filings
effected in connection with the Original Credit Agreement are sufficient to
create security interests and Liens in favor of the Collateral Agent in respect
of the Obligations.
(c) The Borrower agrees that each action required above by
this Section 7.11 shall be completed as soon as possible, but in no event later
than 60 days after such action is requested to be taken by the Agent or the
Required Banks.
7.12 Real Estate Leases. (a) The Borrower will, and will cause
each Subsidiary to, promptly perform and observe all of the material terms,
covenants, agreements and conditions required to be performed and observed by
the Borrower or any Subsidiary under any Principal Real Property Lease under
which the Borrower of any Subsidiary is a lessee and do all things necessary to
preserve and to keep unimpaired its material rights thereunder and (ii)
promptly to notify the Administrative Agent of any default by the Borrower or
any Subsidiary under any such Principal Real Property Lease in the performance
or observance of any of the material terms, covenants, agreements or conditions
on the part of the Borrower or such Subsidiary to be performed or observed
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thereunder or of the giving of any notice by the lessor under a Principal Real
Property Lease to the Borrower or such Subsidiary (x) claiming such a default
or (y) of such lessor's intention to exercise its right to terminate such
Principal Real Property Lease or any other right of the lessor which would have
a materially adverse effect on the rights of the Borrower or any Subsidiary as
lessee thereunder.
(b) The Borrower will, and will cause each Subsidiary to,
perform and observe all of the terms, covenants, agreements or conditions
required to be performed or observed by it in connection with any such interest
it has in any of the Principal Real Property Leases, including, without
limitation, payment of all rent, debt service, insurance premiums, taxes and
any other impositions and charges thereunder whatsoever and shall comply with
the provisions of all applicable Principal Real Property Leases or, but only to
the extent of their obligations thereunder, any mortgages, deeds of trust,
deeds to secure debt or other similar instruments affecting the applicable Real
Property, except for any absence of performance or compliance which,
individually or in the aggregate, would not have a Material Adverse Effect.
7.13 Annual Bank Meetings. Within 120 days after the close of
each fiscal year, the Borrower shall, at the request of the Agent or the
Required Banks, hold a meeting at a time and place selected by the Borrower and
acceptable to the Agent with all of the Banks that choose to attend at which
meeting shall be reviewed the financial results of the previous fiscal year and
the financial condition of the Borrower and its Subsidiaries and the budgets
presented for the current fiscal year of the Borrower and its Subsidiaries.
7.14 Clarke Sale. In the event that the Clarke Sale is not
completed within two days after the Restatement Effective Date, each entity
listed on Annex IX herein (each a "Clarke Entity") shall deliver a Subsidiary
Guaranty, an amendment to each Security Document to which it is a party under
the Original Credit Agreement, and such opinions of counsel, title insurance
and other related documents as may be reasonably requested by the Agent to
maintain a valid and enforceable first priority mortgage lien on Existing
Mortgaged Properties owned by such Clarke Entities free and clear of all
defects and Encumbrances except Permitted Encumbrances, it being understood
that if the Clarke Sale shall be completed within such time frame, each Clarke
Entity shall be released from the relevant Security Documents and Subsidiary
Guaranty Agreement to which it is a party.
7.15 Security Trust Agreements. Each Security Trust Agreement
between the Agent and Stoody Deloro Stellite, Inc. and Victor Equipment Company
executed pursuant to the Original Credit Agreement shall be deemed to have been
amended to reflect the terms of this Agreement.
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7.16 Compliance with Restrictions. Any consensual restrictions
or encumbrances permitted under Section 8.10 (a "Permitted Restriction") shall
be deemed required pursuant to this Agreement to the extent the Borrower or any
of its Subsidiaries enters into any such Permitted Restriction, delivers a
written notice to the Agent requesting that such Permitted Restriction be
deemed required hereunder and the Agent consents thereto. Notwithstanding that
a Permitted Restriction may be deemed required pursuant to this Section 7.16,
the Borrower's or any of its Subsidiaries' failure to comply with such
Permitted Restriction shall not be deemed a Default unless such failure to
comply with such Permitted Restriction could reasonably be expected to result
in a Material Adverse Effect.
SECTION 8. Negative Covenants. The Borrower hereby covenants
and agrees that as of the Restatement Effective Date, and thereafter for so
long as this Agreement is in effect and until the Commitments have terminated,
no Letters of Credit or Notes are outstanding and the Loans, together with
interest, Fees and all other Obligations (other than any indemnities described
in Section 12.13 hereof which are not then due and payable) incurred hereunder,
are paid in full:
8.01 Changes in Business. The Borrower will not permit at any
time the business activities taken as a whole conducted by the Borrower and its
Subsidiaries to be materially different from the business activities taken as a
whole (including incidental activities and businesses complimentary to the
business or similar or related businesses) conducted by the Borrower and its
Subsidiaries on the Restatement Effective Date.
8.02 Indebtedness. The Borrower will not, and will not permit
any Subsidiary to, incur or at any time be liable with respect to any
Indebtedness except:
(a) Indebtedness outstanding under this Agreement and the
other Credit Documents;
(b) Indebtedness of the Borrower evidenced by the Senior Notes
and the Subordinated Notes;
(c) other Existing Indebtedness (including any refinancing,
modification, renewal, amendment, replacement or extension of any
thereof provided that (A) at the time such refinancing, modification,
renewal, amendment, replacement or extension is consummated and
immediately after giving effect thereto, no Default or Event of
Default would exist, (B) there is no increase in the principal amount
of the Existing Indebtedness at such time or the interest rate
applicable thereto, no shortening of the maturity thereof, no increase
in the rate of payment thereof, no change in any subordination
provisions relating thereto, unless any such change in
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such subordination provisions would not have a material adverse effect
on the rights of the Agent or the Banks hereunder, no material
increase in the burdens on the obligor thereunder and no other change
that could adversely affect the rights of the Agents or the Banks
under the Credit Documents and (C) in the case of a Guaranty, the
modified, renewed, amended, replacement or amended Guaranty is binding
only on the obligor or obligors under the Guaranty that is being so
modified, renewed, amended, replaced or extended);
(d) subject to clause (h) below, Indebtedness (but not any
Guaranties thereof except contribution agreements in respect thereof
in form reasonably satisfactory to the Agent) of a Subsidiary owing to
the Borrower or to another Subsidiary, whether or not evidenced by a
promissory note (with all such Indebtedness owing by a Subsidiary
Guarantor to a Foreign Subsidiary to be evidenced by a promissory
note) which, if evidenced by a promissory note and if owed by a
Subsidiary Guarantor, contains subordination provisions substantially
similar to those set forth in Annex XII; provided that (x) any
Indebtedness owed to a Subsidiary that is not a Wholly-Owned
Subsidiary shall be pursuant to an arm's length agreement and (y) in
the case of any such Indebtedness payable to the Borrower or any
Subsidiary Guarantor that is evidenced by a promissory note, such
promissory note shall be pledged pursuant to the Pledge Agreements;
(e) Indebtedness (including, without limitation, Indebtedness
with respect to Capital Leases and non- recourse Purchase Money
Indebtedness) not constituting Existing Indebtedness up to an
aggregate amount of $20,000,000 at any one time outstanding, provided
that the Borrower may guarantee up to $20,000,000 of Indebtedness
(other than Indebtedness for borrowed money) permitted under this
clause (e) and incurred by any of the Domestic Subsidiaries;
(f) Indebtedness (but not any Guaranties thereof) evidenced by
foreign currency exchange contracts entered into in the ordinary
course of business;
(g) Indebtedness (but not any Guaranties thereof except as
permitted under clause (e) above) secured by Liens permitted by
Section 8.03 (r), (s) and (t);
(h) Indebtedness not constituting Existing Indebtedness
evidencing loans from the Borrower and/or any Domestic Subsidiary to a
Foreign Subsidiary or Foreign Subsidiaries (x) in an aggregate amount
not to exceed $20,000,000 at any one time outstanding for all such
loans and/or (y) incurred pursuant to, and as part of, any investment
permitted by Section 8.06(l);
(i) Indebtedness of Foreign Subsidiaries, other than TD
Australia or its Subsidiaries, borrowed in local currencies from
foreign financing institutions in an
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aggregate amount (including all such amounts constituting Existing
Indebtedness) not to exceed $25,000,000, which Indebtedness shall not
be Guaranteed by the Borrower or any Domestic Subsidiary and neither
the Borrower nor any Domestic Subsidiary shall have any obligations to
make any payments with respect thereto;
(j) any Guaranty that is an endorsement of a check for
collection in the ordinary course of business;
(k) Indebtedness (but not any Guaranties thereof other than
Letters of Credit) evidenced by the recourse obligations of the
Borrower on the sale of international receivables pursuant to
agreements on terms and conditions reasonably satisfactory to the
Required Banks, not exceeding $8,000,000 in the aggregate at any one
time outstanding;
(l) Indebtedness (but not any Guaranties thereof) of the
Borrower which is (i) incurred in connection with the redemption,
purchase or repurchase by the Borrower of rights under compensation
plans held by members of management of the Borrower or any of the
Subsidiaries upon the termination of their employment, (ii) approved
by a majority of the directors of the Borrower (including by a
majority of the Borrower's independent directors) and (iii)
subordinated to the obligations of the Borrower to the Banks in a
manner satisfactory to the Agent, provided that the aggregate amount
of any such Indebtedness which may be incurred shall not exceed
$500,000;
(m) Indebtedness (but not any Guaranties thereof except
contribution agreements in respect thereof satisfactory to the Agent)
evidencing loans from any Subsidiary to the Borrower, whether or not
evidenced by a promissory note (provided that all such Indebtedness
owed to any Subsidiary not a Subsidiary Guarantor will be evidenced by
a promissory note), which, if evidenced by a promissory note, contains
subordination provisions substantially similar to those set forth in
Annex XII, provided that in the case of any such Indebtedness
evidenced by a promissory note (other than Indebtedness owed to a
Foreign Subsidiary), such promissory note shall be pledged pursuant to
a Pledge Agreement;
(n) Indebtedness in an aggregate amount not exceeding 40
million Australian dollars owing (directly or indirectly through
Guaranties) by TD Australia and/or any of its wholly-owned
Subsidiaries pursuant to documentation satisfactory to the Agent,
together with an unsecured Guaranty of such Indebtedness issued by the
Borrower pursuant to documentation satisfactory to the Agent;
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(o) any Guaranty by the Borrower and/or any Subsidiary of
Indebtedness of Foreign Subsidiaries in an aggregate amount not to
exceed $10,000,000 at any time outstanding; and
(p) other Indebtedness in an amount not to exceed $5,000,000.
8.03 Liens. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or suffer to exist any Lien on any asset
(including, without limitation, any Owned Real Property), its interest in any
lease (including, without limitation, any Real Property Lease), agreement or
other property now owned or hereafter acquired by it (including, without
limitation, any Real Property), or upon any income or profits therefrom, except
(the following exceptions are herein referred to as the "Permitted Liens"):
(a) Liens which are listed, and the property subject
thereto described in, Annex VII existing on the date hereof securing
Existing Indebtedness (including any extension, renewal or refunding
thereof as permitted pursuant to Section 8.02(c));
(b) inchoate Liens for Taxes not yet due and payable
provided that adequate reserves with respect thereto are maintained on
the books of the Borrower or the Subsidiaries, as the case may be, in
conformity with GAAP;
(c) carriers', warehousemen's, landlord's, mechanics',
materialmen's, repairmen's or other similar Liens arising in the
ordinary course of business, but only if (i) payment thereof shall not
at the time be required to be made and foreclosure, distraint, sale or
other similar proceedings shall not have been commenced, or (ii) the
underlying obligations of such Liens are being contested in good faith
by appropriate proceedings with adequate reserves therefor in
accordance with GAAP;
(d) pledges or deposits made in the ordinary course of
business in connection with obligations under workers' compensation,
unemployment insurance and other social security legislation provided
that the amount of all such pledges and deposits for the Borrower and
all Subsidiaries shall not exceed $5,000,000, but only so long as the
amount of such pledges and deposits applied by the secured party to
the repayment of the obligations secured thereby after the Restatement
Effective Date does not exceed in the aggregate $5,000,000;
(e) Liens created by the Security Documents;
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(f) Liens securing the Indebtedness permitted by (i)
Section 8.02(e) (but only with respect to Purchase Money Indebtedness
and Capital Leases) provided that (A) in the case of Capital Leases,
such Liens shall only encumber the property leased or the proceeds
thereof and shall be non-recourse to any other property of the
applicable party; and (B) in the case of Purchase Money Indebtedness,
only if, in the case of each such Lien, (x) such Lien shall at all
times be confined solely to the property or asset (or the proceeds
thereof) the purchase price of which was financed through the
incurrence of the Purchase Money Indebtedness secured by such Lien and
to fixed improvements thereafter erected on such property or asset and
(y) such Lien attached to such property or asset within 30 days of the
acquisition of such property or asset); (ii) Section 8.02(i) or (n)
(but only on assets of the applicable Foreign Subsidiaries); and (iii)
Section 8.02(k) (but only on the receivables being sold);
(g) Liens of lessors or sublessors on any equipment
leased or subleased to the Borrower or any of the Subsidiaries;
(h) Liens constituting licenses entered into by the
Borrower or any of the Subsidiaries in the ordinary course of
business;
(i) encumbrances consisting of zoning restrictions,
rights-of-way, encroachments, protrusions, minor title deficiencies,
easements or other restrictions on the use of Real Property, provided
that such items do not materially impair the Borrower's or any
Subsidiary's use of such property for the purposes intended;
(j) judgment Liens that would not constitute a Default or
Event of Default;
(k) Liens (other than Liens permitted by clauses (a) and
(d) above) arising under federal, state, local or foreign law (other
than Liens imposed pursuant to Section 401(a)(29) or 412(n) of the
Code or by ERISA or by any Environmental Law), which do not materially
affect the ability of the Borrower or any Material Subsidiary to
perform its obligations hereunder; provided that (i) the aggregate
amount secured by all such Liens does not at any time exceed, for the
Borrower and all Subsidiaries, $2,000,000, but only so long as the
amount of collateral subject to such Liens applied by the secured
parties to the repayment of the obligations secured thereby after the
Restatement Effective Date does not exceed, in the aggregate,
$2,000,000, and (ii) no such Lien encumbers any asset material to the
operation of the Borrower or any Subsidiary;
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<PAGE> 57
(l) Liens not in excess of $1,000,000 in the aggregate,
for the Borrower and all Subsidiaries, with respect to leases as to
which the Borrower or any of the Subsidiaries are lessors, but only so
long as the amount of collateral subject to such Liens applied by the
secured parties to the repayment of the obligations secured thereby
after the Restatement Effective Date does not exceed, in the
aggregate, $1,000,000;
(m) rights of banks to set off deposits against debts
owed to said banks;
(n) Liens securing the performance of tenders, statutory
obligations, surety bonds, stay bonds, customs bonds, appeal bonds,
statutory bonds, bids, leases, government contracts, trade contracts
and other similar obligations provided that the amount of all such
obligations, for the Borrower and all Subsidiaries, secured by such
Liens shall not exceed $1,000,000, but only so long as the amount of
collateral subject to such Liens applied by the secured parties to the
repayment of the obligations secured thereby after the Restatement
Effective Date does not exceed, in the aggregate, $1,000,000;
(o) Permitted Encumbrances;
(p) deposits made in the ordinary course of business to
secure liability to insurance carriers provided such deposits do not,
for the Borrower and all Subsidiaries, exceed an aggregate amount
equal to $750,000 at any one time outstanding;
(q) any interest or title of a lessor, sublessor,
licensee or licensor under any lease or license agreement permitted by
this Agreement;
(r) Liens in favor of parties (other than any Bank) to
foreign exchange or hedging agreements securing obligations not to
exceed $750,000 in the aggregate, for the Borrower and all
Subsidiaries, at any one time outstanding, but only so long as the
amount of collateral subject to such Liens applied by the secured
parties to the repayment of the obligations secured thereby after the
Restatement Effective Date does not exceed, in the aggregate,
$750,000;
(s) Liens on the assets or property of the Borrower or
its Subsidiaries existing prior to the time such assets or property
were acquired by the Borrower or its Subsidiaries and not incurred as
a result of (or in connection with or in anticipation of) such
acquisition provided that such Liens do not extend to or cover any
property or assets of the Borrower or its Subsidiaries other than the
property or assets so acquired;
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(t) Liens securing reimbursement obligations with respect
to trade letters of credit issued in the ordinary course of business
provided that the amount of the reimbursement obligations secured by
such Liens, for the Borrower and all Subsidiaries, does not exceed
$1,000,000 at any time, but only so long as the amount of collateral
subject to such Liens applied by the secured parties to the repayment
of the obligations secured thereby after the Restatement Effective
Date does not exceed, in the aggregate, $1,000,000;
(u) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties in
connection with the importation of goods provided that such Liens
arise by operation of law and are limited to the goods imported;
(v) Liens arising from precautionary UCC financing
statement filings regarding operating leases entered into by the
Borrower or any of its Subsidiaries in the ordinary course of
business;
(w) Liens arising out of the existence of judgments or
awards not constituting an Event of Default hereunder, provided that
no cash or property is deposited or delivered to secure the respective
judgment or award;
(x) Liens arising out conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into
by the Borrower or any of its Subsidiaries in the ordinary course of
business and otherwise permitted by this Agreement;
(y) Deposits made to secure statutory obligations in the
form of excise taxes; and
(z) Liens arising out of barter transactions or similar
arrangements for the sale or purchase of goods or services entered
into by the Borrower or any of its Subsidiaries in the ordinary course
of its business.
8.04 Consolidations, Mergers and Disposition of Assets. (a)
The Borrower will not, and will not permit any Subsidiary to, consolidate or
merge with or into any other Person provided that (x) the Borrower may, subject
to the other provisions of this Agreement and the other Credit Documents, merge
with a Subsidiary so long as (i) the Borrower is the surviving corporation and
(ii) immediately prior thereto and immediately after giving effect thereto, no
Default or Event of Default shall have occurred and be continuing and (y) any
Subsidiary may consolidate with or merge with or into another Subsidiary if (A)
the corporation surviving such consolidation or merger is a Wholly-Owned
Subsidiary (and if the non-surviving Subsidiary was a Credit Party
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<PAGE> 59
immediately prior to such merger or consolidation, such surviving Subsidiary is
a Credit Party party to a Subsidiary Guaranty, a Security Agreement and any
other applicable Security Documents) or (B) such merger or consolidation is
effectuated in connection with a Disposition permitted by Section 8.04(b) of
the Borrower's Investment in such Subsidiary, and, in any such case, after
giving effect thereto, no Default or Event of Default shall exist.
(b) The Borrower will not, and will not permit any Subsidiary
to make any Disposition of any of its assets (including, but not limited to,
the Owned Real Property and the Leased Real Property) to any other Person
provided that the Borrower or any of the Subsidiaries may make (i) Dispositions
of its assets or any interest therein to the Borrower or a Subsidiary (provided
that (A) any disposition to a non-Wholly-Owned Subsidiary shall be upon arm's-
length terms, (B) no such Disposition may be made to a Foreign Subsidiary 65%
of the issued and outstanding shares of capital stock of which have not been
pledged pursuant to a Pledge Agreement, (C) no such Disposition may be made to
a Foreign Subsidiary which is prohibited by the Applicable Law of its
jurisdiction of organization from repatriating its earnings to the United
States (it being agreed that the imposition of a tax or other charge on
repatriating income shall not constitute such a prohibition), (D) no such
Disposition may be made from a Domestic Subsidiary to a Foreign Subsidiary
unless the book value of the assets which are the subject of all such
Dispositions by all Domestic Subsidiaries does not exceed $1,000,000 in any
fiscal year of the Borrower and any such Disposition is in the ordinary course
of business of such Domestic Subsidiary provided that dispositions in the
ordinary course of business of inventory may be made between any Subsidiary so
long as the Disposition price is (x) not less than the cost thereof to the
transferor or (y) where the transferee is a Subsidiary Guarantor not more than
the fair market value of such inventory and (E) no such Disposition may be made
to any Domestic Subsidiary that is not a party to a Subsidiary Guaranty, a
Security Agreement and any other applicable Security Documents), (ii)
Dispositions (including any such Dispositions made to a Subsidiary) in the
ordinary course of business of inventory or used, worn-out, surplus or obsolete
equipment not used or useful in its business, (iii) Asset Dispositions (other
than Dispositions of Owned Real Property or any right, title or interest it may
have in and to any Leased Real Property) the aggregate Net Cash Proceeds of
which do not exceed $5,000,000 in the aggregate for the Borrower and the
Subsidiaries during any fiscal year of the Borrower in arm's-length
transactions for not less than the fair market value of the assets disposed of,
(iv) Dispositions of property listed on Annex XIII, (v) Dispositions pursuant
to sales of receivables under the agreements referred to in Section 8.02(k),
(vi) Dispositions of assets or interests therein the Net Cash Proceeds of which
do not exceed $50,000, (vii) transfers resulting from any casualty or
condemnation of property or assets, (viii) Dispositions of non-material
licenses or sublicenses of intellectual property and of non-material leases or
subleases of other property in the ordinary course of business and which do not
materially interfere with the business, (ix) the Clarke Sale, (x) Dispositions
of equipment the book
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value of which does not exceed $1,000,000 in any fiscal year of the Borrower
provided that the assets or equipment so disposed of are replaced within 30
days of the date of such Disposition with assets or equipment of a like nature
and used for a similar purpose and (xi) Disposition of Receivables Program
Assets as provided in and pursuant to the Receivables Documents; and
(c) To the extent the Required Banks (or all of the Banks as
shall be required by Section 12.12) waive the provisions of this Section 8.04
with respect to the sale, transfer or other disposition of any Collateral, or
any Collateral is sold, transferred or disposed of as permitted by this Section
8.04, (i) such Collateral shall be sold, transferred or disposed of free and
clear of the Liens created by the respective Security Document; (ii) if such
Collateral includes all of the capital stock of a Subsidiary Guarantor, such
capital stock shall be released from the relevant Pledge Agreement and such
Subsidiary shall be released from the Subsidiary Guaranty; and (iii) the Agent
and the Collateral Agent shall be authorized to take actions deemed appropriate
by them in order to effectuate the foregoing.
8.05 Restricted Payments. The Borrower will not, and will not
permit any Subsidiary to, make, declare, set aside or otherwise become
obligated to make, any Restricted Payment, except:
(a) payments in respect of any inter-company Indebtedness
which is not prohibited by Section 8.02 and Guarantees of Foreign
Subsidiary Indebtedness permitted by Section 8.02;
(b) so long as such payment is not prohibited by the
subordination provisions of the Subordinated Notes Indenture,
regularly scheduled interest payments on the Subordinated Notes;
(c) unless a Default under Section 9.01 or Event of
Default shall have occurred and be continuing, regularly scheduled
interest payments on the Senior Notes;
(d) unless a Default under Section 9.01 or an Event of
Default shall have occurred and be continuing, Senior Notes and/or
Subordinated Notes may be repurchased by the Borrower provided that
(x) the aggregate principal amount of Senior Notes and Subordinated
Notes that may be repurchased pursuant to this clause (d) shall not
exceed $50,000,000 and (y) the aggregate principal amount of
Subordinated Notes that may be repurchased pursuant to this clause (d)
shall not exceed $20,000,000;
(e) Investments permitted pursuant to Section 8.06;
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(f) transactions permitted pursuant to Section 8.07; and
(g) the redemption, repurchase or other acquisition or
retirement for value of any Capital Securities of the Borrower
provided that the aggregate amount of all such redemptions,
repurchases and other acquisitions and retirements for value during
any 12 month period do not exceed $1,000,000.
8.06 Limitations on Investments. The Borrower will not, and
will not permit any Subsidiary to, make or acquire any Investment or have any
Investment outstanding in any Person, except for Investments in the ordinary
course and:
(a) Investments in the Borrower, or any Domestic
Subsidiary or any Foreign Subsidiary, as contemplated by Section
8.02(d);
(b) Equity investments in Wholly-Owned Subsidiaries in an
aggregate principal amount not to exceed $2,000,000;
(c) (i) cash and (ii) Cash Equivalents;
(d) the Investments of the Borrower and its Subsidiaries
existing on the Restatement Effective Date;
(e) Investments in the ordinary course of business in a
trade debtor of the Borrower or a Subsidiary that has filed a petition
in bankruptcy in an amount not in excess of the amount of the
Borrower's or such Subsidiary's claim in bankruptcy against such trade
debtor;
(f) currency swap agreements which are permitted by
Section 8.02(f);
(g) reorganizations and mergers permitted by Section
8.04;
(h) loans to customers contemplated by the agreements
referred to in Section 8.02(k);
(i) advances to employees, officers or agents of the
Borrower or any of the Subsidiaries for travel, relocation and other
reasonable and ordinary business expenses;
(j) each of the Borrower and the Subsidiaries may acquire
and hold receivables owing to it, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance
with customary trade terms (provided that nothing in this clause (i)
shall prevent the Borrower or any Subsidiary from
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offering such concessions of trade terms as management deems
reasonable in the circumstances);
(k) transactions permitted pursuant to Section 8.07;
(l) additional Investments (including direct and/or
indirect Investments in joint ventures and/or partnerships) effected
at a time when no Default or Event of Default exists or would result
therefrom provided that the aggregate consideration expended by the
Borrower, and its Subsidiaries (including cash, the fair market value
of property paid (including the stock of the Borrower) and
Indebtedness assumed or guaranteed) shall not exceed $30,000,000 for
any such Investment provided that (x) the Agent shall have received
all material documentation related to each such Investment prior to
the consummation thereof and (y) the covenants set forth in Sections
8.16 and 8.17 would have been complied with on a pro forma basis as of
the end of the last fiscal year or fiscal quarter, as the case may be,
then ended as if such Investment had been made prior to the end of
such year or quarter, respectively; and
(m) promissory notes and other similar non-cash
consideration received by the Borrower and its Subsidiaries in
connection with Dispositions permitted hereunder which in the
aggregate principal amount shall not exceed $5,000,000.
8.07 Transactions with Affiliates. The Borrower will not, and
will not permit any Subsidiary to, (i) make any Investment in an Affiliate;
(ii) sell, lease or otherwise transfer any assets to an Affiliate; (iii)
purchase or acquire assets from an Affiliate; or (iv) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including, without limitation, Guaranties and assumptions of obligations of an
Affiliate); provided that the Borrower or a Subsidiary may, unless otherwise
prohibited by this Agreement, enter into any such transaction with an Affiliate
in the ordinary course of the Borrower's or such Subsidiary's business if the
monetary or business consideration arising therefrom would be substantially as
advantageous to the Borrower or such Subsidiary as the monetary or business
consideration which would be obtained in a comparable arm's length transaction
with a Person not an Affiliate. Notwithstanding the foregoing, the Borrower and
the Subsidiaries may (i) compensate any inside directors or officers pursuant
to compensation and incentive plans approved by its Board of Directors (the
"Incentive Plans"), and (ii) make any Restricted Payment permitted by Section
8.05 and any other Investments permitted by Section 8.06, incur any
Indebtedness permitted by Section 8.02 and make any Dispositions permitted by
Section 8.04. This Section shall not prohibit the Borrower or any of Randall
Curran and James Tate from performing their respective obligations under the
employment agreements between the Borrower and the Domestic Subsidiaries, on
the one hand, and each of them on the other hand.
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8.08 Amendment or Termination of Certain Documents. (a) The
Borrower will not consent to any amendment, modification, supplement or
termination of, or be a party to any such amendment, modification, supplement
or termination of, any of the provisions of any of the Senior Notes Documents
and/or the Subordinated Notes Documents without the prior written consent of
the Agent (with the approval of the Required Banks).
(b) The Borrower will not, and will not permit any Subsidiary
to, amend or modify, in the case of the Borrower its certificate of
incorporation, bylaws or any other constituent documents or, in the case of any
Subsidiary whose shares are pledged pursuant to a Pledge Agreement, its
certificate of incorporation, bylaws or any other constituent documents, in
each case in a manner so as to restrict the transfer of its shares or the
voting or dividend rights of its shareholders or in any other manner which
could adversely affect the rights of the Collateral Agent or any Bank in, or
the value of, the Collateral.
8.09 Taxes of Other Persons. The Borrower will not, and will
not permit any Subsidiary to, (a) file a consolidated tax return with any other
Person other than, in the case of the Borrower, a Consolidated Subsidiary and,
in the case of any such Subsidiary, the Borrower or a Consolidated Subsidiary,
or (b) except as required by Applicable Law, pay or enter into any Contract to
pay any taxes owing by any Person other than the Borrower or a Consolidated
Subsidiary.
8.10 Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries. The Borrower will not, and will not permit any
Subsidiary to, create, assume or otherwise cause or suffer to exist or to
become effective any consensual encumbrance or restriction on the ability
(whether by covenant, event of default, subordination or otherwise) of any
Subsidiary to (a) pay dividends or make any other distributions on its capital
stock to the Borrower or any other Subsidiary; (b) make payments in respect of
any Indebtedness owed to the Borrower or any other Subsidiary (other than as
permitted or required by any of the Credit Documents); (c) make loans or
advances to or investments in the Borrower or any of the Wholly-Owned
Subsidiaries; (d) transfer any of its property or assets to the Borrower or any
of the Wholly-Owned Subsidiaries; or (e) create any Lien upon its property or
assets whether now owned or hereafter acquired or upon any income or profits
therefrom provided that the following restrictions shall not be prohibited
pursuant to this Section 8.10: (i) consensual encumbrances or restrictions
binding upon any Foreign Subsidiary to the extent created in connection with
the incurrence of any Indebtedness by such Foreign Subsidiary as permitted by
Section 8.02(c), (i) or (o); (ii) consensual encumbrances or restrictions
binding upon any Person at the time such Person becomes a Subsidiary so long as
such encumbrances or restrictions are not created, incurred or assumed in
contemplation of such Person becoming a Subsidiary; (iii) consensual
encumbrances and restrictions set forth in the Senior Notes Indenture; (iv)
consensual encumbrances and restrictions set
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forth in the Subordinated Notes Indenture; (v) any covenant or restriction of
the type contained in Section 8.03 that is contained in any contract evidencing
or providing for the creation of or concerning Purchase Money Indebtedness;
(vi) any consensual encumbrances or restrictions contained in any Credit
Document or (vii) any consensual encumbrances and restrictions contained in the
Receivables Documents.
8.11 Issuance and Disposition of Capital Securities. The
Borrower will not, and will not permit any Subsidiary to, (a) issue any of its
Capital Securities, except that this Section 8.11(a) shall not apply to any
issuance by the Borrower of any shares of its common stock or to any issuance
by a Subsidiary to the Borrower or a Subsidiary Guarantor or (b) sell, assign,
transfer or otherwise dispose of any Capital Securities of any Subsidiary,
except to the Borrower or another Subsidiary Guarantor.
8.12 Foreign Deposit Accounts. The Borrower will not, and will
not permit any of its Subsidiaries to, maintain at any time payments and
proceeds received or derived from or in connection with the operation or
business of the Borrower or any of the Subsidiaries or payments constituting
proceeds of any asset or any other amounts received by the Borrower or any of
the Subsidiaries from any source whatsoever in Deposit Accounts located outside
the United States aggregating in excess of $20,000,000 for all such foreign
Deposit Accounts.
8.13 Subsidiaries. The Borrower will not, and will not permit
any of its Subsidiaries to, create any Subsidiary which is not (i) a
Wholly-Owned Subsidiary or (ii) an entity the Investment in which was made
pursuant to Section 8.06(l).
8.14 Capital Expenditures. (a) The Borrower will not permit
the Capital Expenditures made by the Borrower and the Subsidiaries, on a
consolidated basis, during each fiscal year of the Borrower set forth below to
exceed the amount set forth opposite such fiscal year:
<TABLE>
<CAPTION>
Fiscal Year Ending Amount
------------------ ------
<S> <C>
December 31, 1996 $20,000,000
December 31, 1997 $22,500,000
Thereafter $25,000,000
</TABLE>
(b) Notwithstanding anything to the contrary contained in
clause (a) above, to the extent that Capital Expenditures made by the Borrower
and its Subsidiaries, on a consolidated basis, during any fiscal year are less
than the maximum amount permitted to be made for such fiscal year pursuant to
clause (a) (without taking into account any increase in the amount permitted
during such period as a result of this clause
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(b)), such unused amount may be carried forward to the immediately succeeding
fiscal year.
8.15 Minimum Consolidated Current Ratio. The Borrower will not
permit the Consolidated Current Ratio, as measured on the last day of each
fiscal quarter of the Borrower, to be less than 1.5 to 1.0.
8.16 Maximum Consolidated Funded Indebtedness to Consolidated
EBITDA. The Borrower will not permit, as of the last day of each fiscal year of
the Borrower set forth below, the ratio of Consolidated Funded Indebtedness as
of such date to the Consolidated EBITDA for such fiscal year:
<TABLE>
<CAPTION>
Fiscal Year Ending Ratio
------------------ -----
<S> <C>
December 31, 1996 5.25:1.0
December 31, 1997 5.00:1.0
Thereafter 4.75:1.0
</TABLE>
8.17 Minimum Interest Coverage Ratio. The Borrower will not
permit the Interest Coverage Ratio to be less than 2.0 to 1.0 as at the end of
any fiscal quarter of the Borrowing commencing the fiscal quarter ending
September 30, 1997.
SECTION 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of the Loans or (ii) default, and such default shall
continue unremedied for three or more days, in the payment when due of any
Unpaid Drawing, any interest on the Loans or any Fees or any other amounts
owing hereunder or under any other Credit Document; or
9.02 Representations, etc. Any representation, warranty or
statement made by the Borrower or any Credit Party herein or in any other
Credit Document or in any statement or certificate delivered pursuant hereto or
thereto shall prove to be untrue in any material respect on the date as of
which made or deemed made; or
9.03 Covenants. The Borrower shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 7.11 or 8, or (b) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in Section 9.01,
9.02 or clause (a) of this Section 9.03) contained
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in this Agreement and such default shall continue unremedied for a period of at
least 30 days after written notice to the Borrower by the Agent or the Required
Banks; or
9.04 Default Under Other Agreements. (A) (a) The Borrower or
any of its Subsidiaries shall (i) default in any payment with respect to any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
provided in the instrument or agreement under which Indebtedness was created or
(ii) default in the observance or performance of any agreement, covenant or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause any such
Indebtedness to become due prior to its stated maturity; or (b) any
Indebtedness (other than the Obligations) of the Borrower or any of its
Subsidiaries shall be declared to be due and payable, or shall be required to
be prepaid other than by a regularly scheduled required prepayment or as a
mandatory prepayment (unless such required prepayment or mandatory prepayment
results from a default thereunder or an event of the type that constitutes an
Event of Default), prior to the stated maturity thereof; provided, that it
shall not constitute an Event of Default pursuant to clause (a) or (b) of this
Section 9.04 unless the principal amount of any one issue of such Indebtedness,
or the aggregate amount of all such Indebtedness referred to in clauses (a) and
(b) above, exceeds $5,000,000 at any one time; or
(B) A default shall be continuing under any Contract (other
than a Contract relating to Indebtedness to which clause (A) of this Section
9.04 is applicable) binding upon the Borrower or any Subsidiary, except a
default that, together with all other such defaults, has not had a Material
Adverse Effect; or
9.05 Bankruptcy, etc. The Borrower or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the Borrower or any of its Subsidiaries and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Borrower or any of its Subsidiaries; or the Borrower or any of its
Subsidiaries commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to the Borrower or any of its Subsidiaries; or there is
commenced against the Borrower or any of its Subsidiaries any such proceeding
which remains undismissed for a period of 60 days; or the Borrower or any of
its Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief
or other order approving any such case or proceeding is entered; or the
Borrower or any of its Subsidiaries suffers any
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appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by the Borrower or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412
of the Code or Section 302 of ERISA or a waiver of such standard or extension
of any amortization period is sought or granted under Section 412 of the Code
or Section 303 or 304 of ERISA, a Reportable Event shall have occurred, any
Plan which is subject to Title IV of ERISA shall have had or is likely to have
a trustee appointed to administer such Plan, any Plan which is subject to Title
IV of ERISA is, shall have been or is likely to be terminated or to be the
subject of termination proceedings under ERISA, any Plan (which is subject to
Title IV of ERISA and/or Section 412 of the Code) shall have an Unfunded
Current Liability, a contribution required to be made with respect to a Plan
has not been timely made, the Borrower or any Subsidiary of the Borrower or any
ERISA Affiliate has incurred or is likely to incur any liability to or on
account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the
Code or on account of a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or
the Borrower or any Subsidiary of the Borrower has incurred or is likely to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) that provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
Plans; (b) there shall result from any such event or events the imposition of a
lien, the granting of a security interest, or a liability or a material risk of
incurring a liability; and (c) such lien, security interest or liability,
individually, and/or in the aggregate, in the reasonable opinion of the
Required Banks, has had, or could reasonably be expected to have, a Material
Adverse Effect; or
9.07 Security Documents. (a) Except in each case to the extent
resulting from the negligent or willful failure of the Collateral Agent to
retain possession of the applicable Pledged Securities, any Security Document
shall cease to be in full force and effect for any reason other than repayment,
release or partial release, or shall cease to give the Collateral Agent the
Liens, rights, powers and privileges purported to be created thereby in favor
of the Collateral Agent, or (b) any Credit Party shall default in the due
performance or observance of any material term, covenant or agreement on its
part to be performed or observed pursuant to any such Security Document and any
such default shall have continued uncured for at least 30 days; or
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9.08 Subsidiary Guaranty. The Subsidiary Guaranty or any
provision thereof shall cease to be in full force and effect, or any Subsidiary
Guarantor or any Person acting by or on behalf of such Subsidiary Guarantor
shall deny or disaffirm such Subsidiary Guarantor's obligations under the
Subsidiary Guaranty; or
9.09 Judgments. (a) One or more judgments or decrees shall be
entered against the Borrower or any of its Subsidiaries involving the payment
of money (to the extent not paid or covered by insurance) in excess of
$5,000,000 for all such judgments and decrees and such judgments or decrees
shall not have been vacated, paid, discharged or stayed or bonded pending
appeal within 60 days from the entry thereof or an enforcement proceeding shall
have been commenced upon such judgment or decree or (b) in the case of any
judgment or decree for other than the payment of money, such judgment or decree
could, in the reasonable judgment of the Required Banks, together with all
other such judgments or orders, have a Material Adverse Effect on the Borrower
and its Subsidiaries (on a consolidated basis), taken as a whole; or
9.10 Material Subsidiary. The Borrower shall cease to own 100%
of the outstanding capital stock of any Material Subsidiary unless such
Material Subsidiary was created pursuant to Section 8.06(l);
then, and in any such event, and at any time thereafter, if any Event of
Default shall then be continuing, the Agent shall, upon the written request of
the Required Banks, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent or any Bank to
enforce its claims against any Credit Party, except as otherwise specifically
provided for in this Agreement (provided, that if an Event of Default specified
in Section 9.05 shall occur with respect to the Borrower, the result which
would occur upon the giving of written notice by the Agent as specified below
shall occur automatically without the giving of any such notice): (i) declare
the Total Commitment (or the unutilized portion thereof) terminated, whereupon
the Commitment of each Bank (or the unutilized portion thereof) shall forthwith
terminate immediately and any Commitment Fees shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal of and
any accrued and unpaid interest in respect of all Loans and all obligations
owing hereunder (including Unpaid Drawings) to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any
or all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; and (v) direct the Borrower to pay (and the Borrower
hereby agrees upon receipt of such notice, or upon the occurrence of any Event
of Default specified in Section 9.05, to pay) to the Collateral Agent at the
Payment Office such additional amounts of cash, to be held as security for
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the Borrower's reimbursement obligations in respect of Letters of Credit then
outstanding, equal to the aggregate Stated Amount of all Letters of Credit then
outstanding.
SECTION 10. Definitions. As used herein, the following terms
shall have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural the singular:
"Additional Security Documents" shall have the meaning provided
in Section 7.11.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to all
directors and officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power (i) to
vote 5% or more of the securities having ordinary voting power for the election
of directors of such corporation or (ii) to direct or cause the direction of
the management and policies of such corporation, whether through the ownership
of voting securities, by contract or otherwise.
"Agent" shall have the meaning provided in the first paragraph
of this Agreement and shall include any successor to the Agent appointed
pursuant to Section 11.10.
"Agreement" shall mean this Credit Agreement, as the same may
be from time to time modified, amended, restated and/or supplemented.
"Applicable Base Rate Margin" shall mean the margin determined
in accordance with the below schedule based on the Ratio for the four fiscal
quarters last ended and as determined from the most recent financial statements
of the Borrower timely delivered to the Banks pursuant to Section 7.01(a) or
(b), as the case may be; and so long as the Borrower is in default under
Section 7.01(a) or (b), as the case may be, then the margin shall be 1.25%:
<TABLE>
<CAPTION>
Applicable
Ratio Base Rate Margin
----- ----------------
<S> <C>
Greater than 4.75:1 1.25%
Less than or equal to 1.00%
4.75:1 but greater
than 4.25:1
</TABLE>
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<TABLE>
<S> <C>
Less than or equal to 4.25:1 .75%
but greater than 3.75:1
Less than or equal to .50%
3.75:1
</TABLE>
"Applicable CC Rate" shall mean (x) at any time when the Ratio
for the four fiscal quarters last ended and as determined from the most recent
financial statements of the Borrower timely delivered to the Banks pursuant to
Section 7.01(a) or (b), as the case may be, is equal to or less than 4.25:1,
.375% per annum and (y) at any other time, .50% per annum.
"Applicable Eurodollar Margin" shall mean the margin
determined in accordance with the below schedule based on the Ratio for the
four fiscal quarters last ended and as determined from the most recent
financial statements of the Borrower timely delivered to the Banks pursuant to
Section 7.01(a) or (b), as the case may be; and so long as the Borrower is in
default under Section 7.01(a) or (b), as the case may be, then the margin shall
be 2.25%:
<TABLE>
<CAPTION>
Applicable
Eurodollar
Ratio Rate Margin
----- -----------
<S> <C>
Greater than 4.75:1 2.25%
Less than or equal to 2.00%
4.75:1 but greater
than 4.25:1
Less than or equal to 4.25:1 1.75%
but greater than 3.75:1
Less than or equal to 3.75:1 1.50%
</TABLE>
"Applicable Law" shall mean (a) all applicable common law and
principles of equity and (b) all applicable provisions of all (i)
constitutions, statutes, rules, regulations and orders of governmental bodies,
(ii) Governmental Approvals and (iii) orders, decisions, judgments and decrees
of all courts (whether at law or in equity or admiralty) and arbitrators.
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"Asset Disposition" shall mean any Disposition of any asset of
the Borrower or any Subsidiary, or any interest in any such asset, the Net Cash
Proceeds of which exceed $50,000.
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement substantially in the form of Exhibit H
(appropriately completed).
"Authorized Officer" shall mean the President, any Vice
President or the Treasurer of the Borrower.
"Bank" shall have the meaning provided in the first paragraph
of this Agreement.
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any incurrence of Loans
or to fund its portion of any unreimbursed payment under Section 2.04(c) or
(ii) a Bank having notified the Agent and/or the Borrower that it does not
intend to comply with the obligations under Section 1.01 or under Section
2.04(c), in the case of either (i) or (ii) as a result of the appointment of a
receiver or conservator with respect to such Bank at the direction or request
of any regulatory agency or authority.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" at any time shall mean the highest of (x) the rate
which is 1/2 of 1% in excess of the Federal Funds Effective Rate and (y) the
Prime Lending Rate.
"Base Rate Loan" shall mean each Loan bearing interest at the
rates provided in Section 1.08(a).
"Borrower" shall mean Thermadyne Holdings Corporation, a
Delaware corporation.
"Borrowing" shall mean and include (i) the incurrence of
Swingline Loans from BTCo on a given date and (ii) the incurrence of one Type
of Loan by the Borrower from all of the Banks on a pro rata basis on a given
date (or resulting from conversions on a given date), having in the case of
Eurodollar Loans the same Interest Period; provided, that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of any related
Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company and any successor
corporation thereto by merger, consolidation or otherwise.
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"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day excluding Saturday, Sunday and any day
which shall be in the City of New York a legal holiday or a day on which
banking institutions are authorized by law or other governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in U.S. dollar deposits in the New York interbank
Eurodollar market.
"Capital Expenditures" shall mean, with respect to the
Borrower and the Subsidiaries, any expense or Liability incurred or expenditure
made, in each case in connection with long-lived tangible assets used for the
production of goods or services, which is required in accordance with GAAP to
be capitalized on the Borrower's consolidated balance sheet provided that for
the purposes of Section 8.14, Capital Expenditures shall not include any
expenditure made to restore or replace property or assets damaged, destroyed or
subjected to condemnation to the extent that such expenditure is paid from the
proceeds of insurance or condemnation awards received with respect to such
damage, destruction or condemnation.
"Capital Lease," as applied to any Person, shall mean any
lease of any property (whether real, personal or mixed) by that Person as
lessee which, in conformity with GAAP, is accounted for as a capital lease on
the balance sheet of that Person.
"Capital Security" shall mean with respect to any Person, (a)
any share of capital stock of such Person or (b) any security, convertible
into, or any option, warrant or other right to acquire, any share of capital
stock of such Person.
"Capitalized Lease Obligations" shall mean all obligations
under Capital Leases of the Borrower or any of its Subsidiaries in each case
taken at the amount thereof accounted for as liabilities in accordance with
GAAP.
"Cash Collateral Agreement" shall have the meaning provided in
Section 12.17.
"Cash Equivalents" shall mean (a) direct obligations of the
United States or any agency thereof, or obligations guaranteed by the United
States or any agency thereof, (b) time deposits with, including certificates of
deposits issued by, any office of any Bank, (c) repurchase agreements entered
into with any Bank, (d) commercial paper maturing no more than 90 days from the
date of creation thereof and, at the time of acquisition, having the highest
rating available from Standard & Poor's Corporation and Moody's Investors
Service, Inc., (e) with respect to Investments made by Subsidiaries doing
business outside the United States of America, investments comparable to those
described in clauses (a)
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and (d) above but denominated in currencies other than U.S. dollars which are
customary for temporary investment of cash in the jurisdiction where such
Subsidiary does business provided that in each case that any such Investment
described in clauses (a) through (e) by its terms requires, or permits the
holder thereof at its option to require, repayment, redemption or repurchase
thereof within three months from the date of acquisition thereof by the
Borrower or a Subsidiary and (f) investments in money market funds to the
extent substantially all of funds therein are invested in the instruments
described in clauses (a), (b), (c) and (d) above.
"Change of Control" shall mean either (i)(a)(1) funds and
accounts managed or advised by Fidelity or by its Affiliates either themselves,
collectively, or acting in concert with one or more other Persons (as such term
is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934)
shall, or (2) funds and accounts managed or advised by Magten or by its
Affiliates either themselves, collectively, or acting in concert with on or
more other Persons (as so defined) shall, as a result of a tender or exchange
offer, open market purchases, privately negotiated purchases or otherwise, have
become the direct or indirect beneficial owner (within the meaning of Rule
13d-3 and Rule 13d-5 under the Securities Exchange Act of 1934, except that an
entity shall be deemed to have "beneficial ownership" of all shares that any
such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time) (a "Beneficial Owner") of more
than (x) in the case of Fidelity, 40% of the issued and outstanding shares of
the Borrower's common stock and (y) in the case of Magten, 50% of the issued
and outstanding shares of the Borrower's common stock or (b) any other Person
(as defined above) (other than the funds and accounts referred to in clause
(i)(a) hereof) and its Affiliates or group of Persons (other than the funds and
accounts referred to in clause (i)(a) hereof) acting in concert shall, as a
result of a tender or exchange offer, open market purchases, privately
negotiated purchases or otherwise, have become the direct or indirect
Beneficial Owner of more than 30% of the issued and outstanding shares of the
Borrower's common stock, or (ii) less than a majority of the members of the
Borrower's board of directors shall be Persons who either (a) were serving as
directors on the Restatement Effective Date or (b) were nominated as directors
and approved by the vote of the majority of the directors who are directors
referred to in clause (a) above or this clause (b).
"Clarke" shall mean Clarke Industries, Inc., a Delaware
corporation.
"Clarke Entity" shall have the meaning provided in Section
7.14 herein.
"Clarke Proceeds" shall mean the Net Cash Proceeds resulting
from the Clarke Sale.
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"Clarke Sale" shall mean a sale of all of the capital stock of
Clarke or its direct parent company, Clarke Holding Corporation substantially
on the terms set forth in the Stock Purchase Agreement and otherwise on a basis
reasonably satisfactory to the Agent, which transaction includes the sale of
those companies listed on Annex IX.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at the
date of this Agreement and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all of the Collateral as defined in
each of the Security Documents.
"Collateral Agent" shall mean the Agent acting as collateral
agent for the Banks.
"Commitment" shall mean at any time, with respect to each
Bank, the amount set forth opposite such Bank's name in Annex I as the same may
be reduced from time to time pursuant to Section 3.02 or 9 or adjusted from
time to time as a result of assignments to or from such Bank as provided for in
Section 1.13 and in 12.04
"Commitment Fee" shall have the meaning provided in Section
3.01(a).
"Consolidated Current Assets" shall mean, at any time, the
current assets of the Borrower and the Consolidated Subsidiaries, determined on
a consolidated basis, excluding cash and Cash Equivalents.
"Consolidated Current Liabilities" shall mean, at any time,
the consolidated current liabilities of the Borrower and the Consolidated
Subsidiaries as of such time, excluding (a) accrued interest, (b) accrued taxes
and (c) the then current maturities of any outstanding Consolidated Funded
Indebtedness (which for this purpose shall include the Revolving Loans
outstanding at such time).
"Consolidated Current Ratio" shall mean the ratio of
Consolidated Current Assets to Consolidated Current Liabilities.
"Consolidated EBITDA" shall mean, for any period, the sum of
(a) the Consolidated Net Income of the Borrower and the Consolidated
Subsidiaries, determined on an after-tax basis, before interest income,
Consolidated Interest Expense and provision for taxes and without giving effect
to any extraordinary gains or losses or gains or losses from sales of assets
other than inventory sold in the ordinary course of business, and (b)
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all amortization of intangibles, depreciation and other non-cash charges (to
the extent deducted in calculating the amount set forth in clause (a))
determined in each case on a pro forma basis as if each Investment made
pursuant to Section 8.06(l) during such period were consummated on the first
day of such period (and as if any Indebtedness incurred or assumed to finance
such Investment were incurred or assumed on such first day).
"Consolidated Funded Indebtedness" shall mean (a) all
Indebtedness of the Borrower and the Consolidated Subsidiaries as reflected, or
that ought to be reflected, on a consolidated balance sheet of the Borrower and
the Consolidated Subsidiaries (exclusive of Indebtedness owing to the Borrower
or a Consolidated Subsidiary, (b) except to the extent included in clause (a),
the undisbursed amount of all letters of credit issued for the account of the
Borrower or the Subsidiaries and (c) the Ongoing Receivables Proceeds.
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated interest expense of the Borrower and the Consolidated
Subsidiaries for such period, net of any interest income received or accrued in
the ordinary course (calculated without regard to any limitations on the
payment thereof, but excluding any amortization of deferred financing costs
incurred by the Borrower or the Consolidated Subsidiaries) plus, without
duplication, (a) that portion of Capitalized Lease Obligations of the Borrower
and the Consolidated Subsidiaries representing the interest factor for such
period and (b) any discount on the sale of the Receivables Program Assets and
any other interest expense related to the transfer of the Receivables Program
Assets.
"Consolidated Net Income" shall mean, for any period, the
amount of consolidated net income of the Borrower and the Consolidated
Subsidiaries for such period (taken as a cumulative whole).
"Consolidated Subsidiary" shall mean, with respect to any
Person at any time, any Subsidiary or other Person the accounts of which would
be consolidated with those of such first Person in its consolidated financial
statements as of such time; unless otherwise specified, "Consolidated
Subsidiary" means a Consolidated Subsidiary of the Borrower.
"Contract" shall mean (a) any agreement (whether bi-lateral or
uni-lateral or executory or non- executory and whether a Person entitled to
rights thereunder is so entitled directly or as a third-party beneficiary),
including an indenture, lease or license, (b) any deed or other instrument of
conveyance, (c) any certificate of incorporation or charter and (d) any by-law.
"Credit Documents" shall mean this Agreement, the Notes, the
Subsidiary Guaranty and each Security Document, each as amended, restated or
revised from time to time.
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"Credit Event" shall mean the making of a Loan or the issuance
of a Letter of Credit.
"Credit Party" shall mean the Borrower and each Subsidiary
Guarantor.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Deposit Account" shall mean a demand, time, savings passbook
or like account with a bank, thrift, savings and loan association, credit union
or like organization, other than an account evidenced by a negotiable
certificate of deposit.
"Disposition" shall mean any sale, assignment, lease, transfer
or other disposition, whether voluntary or involuntary.
"Domestic Subsidiary" shall mean each Subsidiary of the
Borrower which is not a Foreign Subsidiary.
"Domestic Subsidiary Pledge Agreements" shall mean and include
(x) the Domestic Subsidiary Pledge Agreements executed and delivered pursuant
to the Original Credit Agreement as amended pursuant to the amendments executed
and delivered pursuant to Section 5.01(k)(A) and (y) each pledge agreement, in
the form of the pledge agreements referred to in clause (x), as amended as
described therein, executed and delivered pursuant to Section 7.11, as amended,
supplemented, restated and/or revised from time to time pursuant to the terms
thereof or hereof.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution or other "accredited investor" (as defined in SEC
Regulation D), in each case which is not a direct competitor of the Borrower or
engaged in the same or similar business as the Borrower, or any of its
Subsidiaries, or is not an Affiliate of any such competitors of the Borrower or
any of its Subsidiaries.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of non-compliance or violation, investigations or proceedings relating
in any way to any Environmental Law (hereafter "Claims") or any permit issued
under any such law, including without limitation (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims under
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or pursuant to Environmental Laws by any third party seeking damages,
contribution, indemnification, cost recovery, compensation or injunctive relief
resulting from Hazardous Materials or arising from alleged injury or threat of
injury to health, safety or the environment.
"Environmental Law" shall mean any applicable federal, state,
foreign or local statute, law, rule, regulation, ordinance, code, legally
binding policy or rule of common law now or hereafter in effect and in each
case as amended, and any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment,
relating to the environment, health, safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, as
amended, 33 U.S.C. Section 1251 et seq.; the Toxic Substances Control Act, 15
U.S.C. Section 7401 et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.;
the Safe Drinking Water Act, 42 U.S.C. Section 3808 et seq.; the Oil Pollution
Act of 1990, 33 U.S.C. Section 2701 et seq.; and any applicable state and local
or foreign counterparts or equivalents.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with the Borrower or a Subsidiary of the
Borrower would be deemed to be a "single employer" (i) within the meaning of
Section 414(b), (c), (m) or (o) of the Code or (ii) as a result of the Borrower
or a Subsidiary of the Borrower being or having been a general partner of such
person.
"Eurodollar Loans" shall mean, each Revolving Loan bearing
interest at the rates provided in Section 1.08(b).
"Eurodollar Rate" shall mean with respect to each Interest
Period for a Eurodollar Loan, (i) the arithmetic average (rounded to the
nearest 1/100 of 1%) of the offered quotations to first-class banks in the New
York interbank Eurodollar market by the Agent for U.S. dollar deposits of
amounts in same day funds comparable to the outstanding principal amount of the
Eurodollar Loan of the Agent for which an interest rate is then being
determined with maturities comparable to the Interest Period to be applicable
to such Eurodollar Loan, determined as of 10:00 A.M. (New York time) on the
date which is two Business Days prior to the commencement of such Interest
Period divided (and rounded upward to the next whole multiple of 1/16 of 1%) by
(ii) a percentage equal to 100% minus the then stated maximum rate of all
reserve requirements (including, without limitation, any marginal, emergency,
supplemental, special or other
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reserves specified by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section
9.
"Existing Indebtedness" shall have the meaning provided in
Section 6.21.
"Existing Letters of Credit" shall have the meaning provided
in Section 2.01(d).
"Existing Mortgaged Properties" shall mean all Real Property
encumbered as of the Restatement Effective Date by the Existing Mortgages and
listed on Annex VI.
"Existing Mortgages" shall mean all Real Estate Security
Agreements executed and delivered pursuant to the Original Credit Agreement and
which have not been released prior to the Restatement Effective Date and which
are not to be released on the Restatement Effective Date (i.e. other than those
on Real Property owned or leased by entities being sold pursuant to the Clarke
Sale).
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Federal Funds Effective Rate" shall mean for any period, a
fluctuating interest rate equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three Federal
Funds brokers of recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to, or referred
to in, Section 3.01.
"Fidelity" shall mean Fidelity Management Research Company and
its Affiliates.
"Foreign Subsidiary" shall mean each Subsidiary of the
Borrower that is not incorporated under the laws of any state of the United
States of America or in the District of Columbia.
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"Foreign Subsidiary Pledge Agreements" shall mean and include
(x) the Foreign Subsidiary Pledge Agreements executed and delivered pursuant to
the Original Credit Agreement as amended pursuant to the amendments executed
and delivered pursuant to Section 5.01(k)(A) and (y) each pledge agreement, in
the form of the appropriate pledge agreements referred to in clause (x), as
amended as described therein, executed and delivered pursuant to Section 7.11,
as amended, supplemented, restated and/or revised from time to time pursuant to
the terms thereof or hereof.
"GAAP" shall mean generally accepted accounting principles in
the United States of America as in effect from time to time; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(a).
"Governmental Approval" shall mean any authorization, consent,
approval, license or exemption of, registration or filing with, or report or
notice to, any governmental unit.
"Guaranty" of any Person shall mean (a) any obligation,
contingent or otherwise, of such Person to pay any Liability of any other
Person or to otherwise protect, or having the practical effect of protecting,
the holder of any such Liability against loss (whether such obligation arises
by virtue of such Person being a partner of a partnership or participant in a
joint venture or by agreement to pay, to keep well, to purchase assets, goods,
securities or services or to take or pay, or otherwise) (b) without limiting
the generality of the foregoing, any obligation, direct or indirect, contingent
or otherwise, of such Person with respect to the Indebtedness of such other
Person, or (c) any obligation, contingent or otherwise, of such Person incurred
in connection with the issuance by a third Person of a Guaranty of any
Liability of any other Person (whether such obligation arises by agreement to
reimburse or indemnify such third Person or otherwise). The word "Guarantee"
when used as a verb has the correlative meaning. The amount of any Guaranty
shall be deemed to be the lesser of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guaranty
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith, and (b) the maximum
amount for which such Person may be liable pursuant to the terms of the
Guaranty, unless such primary obligation and the maximum amount for which such
Person may be liable are not stated or determinable, in which case the amount
of such Guaranty shall be such Person's maximum reasonably anticipated
liability in respect thereof as determined by the Borrower in good faith.
"Hazardous Materials" shall mean (a) any petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam
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insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls in excess of 50 parts per
million, and radon gas; and (b) any chemicals, materials or substances defined
as or included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "restricted hazardous materials," "extremely hazardous
wastes," "restrictive hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of similar meaning and
regulatory effect under any applicable Environmental Law.
"Incentive Plans" shall have the meaning provided in Section
8.07.
"Indebtedness" of any Person shall mean, without duplication,
(a) any obligation of such Person for borrowed money, (b) any obligation of
such Person evidenced by a bond, debenture, note or other similar instrument
and all securities providing for mandatory payments of money, whether or not
contingent, (c) any obligation of such Person to pay the deferred purchase
price of property or services, except a trade account payable that arises in
the ordinary course of business but only if and so long as the same is payable
on customary trade terms, (d) any obligation of such Person as lessee under a
Capital Lease, (e) any Mandatorily Redeemable Stock of such Person owned by any
Person other than such Person or an Indebtedness-Free Subsidiary of such Person
(the amount of such Mandatorily Redeemable Stock to be determined for this
purpose as the higher of the liquidation preference of and the amount payable
upon redemption of such Mandatorily Redeemable Stock), (f) any obligation of
such Person to purchase securities or other property that arises out of or in
connection with the sale of the same or substantially similar securities or
property, (g) any obligation of such Person to reimburse or prepay any other
Person in respect of amounts paid under a letter of credit, banker's acceptance
or other Guaranty issued by such other Person (whether drawn or undrawn), (h)
any obligation with respect to an interest rate or currency swap or similar
obligation obligating such Person to make payments, whether periodically or
upon the happening of a contingency, except that if any agreement relating to
such obligation provides for the netting of amounts payable by and to such
Person thereunder or if any such agreement provides for the simultaneous
payment of amounts by and to such Person, then in each such case, the amount of
such obligation shall be the net amount thereof, (i) any Indebtedness of others
secured by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) a Lien on any asset of such Person
(whether or not such Indebtedness is assumed by such Person but, if not
assumed, the amount of such Indebtedness shall be limited to the net book value
of the asset securing such Indebtedness) (j) recourse or repurchase obligations
in connection with the sale of receivables, (k) any obligations of such Person
pursuant to revolving credit agreements or similar arrangements, and (l) any
Indebtedness of others Guaranteed by such Person.
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"Indebtedness-Free Subsidiary" shall mean a Subsidiary (a) all
of the Capital Securities, other ownership interests and rights to acquire
ownership interests of which are owned or controlled by the Borrower, by one or
more other Indebtedness-Free Subsidiaries or by the Borrower and one or more
other Indebtedness-Free Subsidiaries and (b) that has no Indebtedness other
than the Loans and Indebtedness owing to the Borrower or another
Indebtedness-Free Subsidiary.
"Interest Coverage Ratio" shall mean, as at any date, the
ratio of (a) Consolidated EBITDA for the four consecutive fiscal quarters of
the Borrower (taken as one accounting period) then ended to (b) Consolidated
Interest Expense for such period and determined on a pro forma basis as if each
Investment made pursuant to Section 8.06(l) during such period were consummated
on the first day of such period (and as if any Indebtedness incurred or assumed
to finance such Investment were incurred or assumed on such first day).
"Interest Period," with respect to any Eurodollar Loan, shall
mean the interest period applicable thereto, as determined pursuant to Section
1.09.
"Interest Rate Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest rate collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Investment" of any Person shall mean (a) any Capital
Security, evidence of Indebtedness or other security or instrument issued by
any other Person, (b) any loan, advance or extension of credit to, or any
contribution to the capital of, any other Person, (c) any acquisition of
substantially all of the assets or business of any other Person by purchase,
merger, consolidation or other form of acquisition of the operating assets or
business of such other Person, and (d) any other investment in any other
Person.
"Leased Real Property" shall mean any real property (including
any buildings and other improvements thereon) now or hereafter used or occupied
by the Borrower and/or any Subsidiary, or which the Borrower and/or any
Subsidiary, has the right to use or occupy, now or in the future, pursuant to
any Real Property Lease. Any reference to the "assets" and/or "properties" of
the Borrower or any Subsidiary shall include, without limitation, the "Leased
Real Property."
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
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"Letter of Credit Issuer" shall mean BTCo and shall include
each L/C Issuer with respect to each Interim Letter of Credit while
constituting an Interim Letter of Credit.
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (i) the aggregate Stated Amount of all outstanding
Letters of Credit and (ii) the aggregate amount of all Unpaid Drawings in
respect of all Letters of Credit.
"Letter of Credit Request" shall have the meaning provided in
Section 2.02(a).
"Liability" of any Person means any indebtedness, liability,
obligation, covenant or duty of or binding upon, or any term or condition to be
observed by or binding upon, such Person or any of its assets, of any kind,
nature or description, direct or indirect, absolute or contingent, due or not
due, contractual or tortious, liquidated or unliquidated, whether arising under
contract, applicable law, or otherwise, whether now existing or hereafter
arising, and whether for the payment of money or the performance or
non-performance of any act.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any agreement to give any of
the foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any similar
recording or notice statute, and any lease having substantially the same effect
as the foregoing).
"Loan" shall mean each and every Loan made by any Bank
hereunder, including Revolving Loans or Swingline Loans.
"Magten" shall mean Magten Asset Management Corporation and
its Affiliates.
"Mandatorily Redeemable Stock" shall mean, with respect to any
Person, any share of such Person's capital stock to the extent that it is (a)
redeemable, payable or required to be purchased or otherwise retired or
extinguished, or convertible into any Indebtedness or other Liability of such
Person, (i) at a fixed or determinable date, whether by operation of a sinking
fund or otherwise, (ii) at the option of any Person other than such Person or
(iii) upon the occurrence of a condition not solely within the control of such
Person, such as a redemption required to be made out of future earnings or (b)
convertible into Mandatorily Redeemable Stock.
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(b).
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"Margin Stock" shall have the meaning provided in Regulation
U.
"Material Adverse Effect" shall mean a material adverse effect
on the business, properties, operations, results of operations, assets,
liabilities, condition (financial or otherwise) or prospects of the Borrower
and its Subsidiaries taken as a whole.
"Material Subsidiary" shall mean any Subsidiary listed on
Annex V under the heading "Material Subsidiary" and any other Subsidiary that
has total assets of at least $5,000,000 or net sales of at least $10,000,000,
in either case as of the date of calculation, as determined in accordance with
GAAP, provided that except for the purposes of Section 9 once a Subsidiary
constitutes a Material Subsidiary, it shall be deemed to continue as a Material
Subsidiary until the Maturity Date.
"Maturity Date" shall mean June 30, 2001.
"Maximum Swingline Amount" shall mean $10,000,000.
"Minimum Borrowing Amount" shall mean (i) for Base Rate Loans,
$1,000,000; (ii) for Eurodollar Loans, $5,000,000 and (iii) for Swingline
Loans, $250,000.
"Mortgage Amendments" shall have the meaning provided in
Section 5.01(l).
"Mortgage Policies" shall mean the Mortgage title insurance
policies issued in respect of each of the Existing Mortgaged Properties, as
modified or supplemented as provided for in Section 5.01(l), or in respect of
any Real Property subjected to a Mortgage pursuant to Section 7.11.
"Mortgages" shall mean mortgages, deeds of trust, leasehold
mortgages and leasehold deeds of trust granted in favor of the Collateral Agent
for the benefit of the Banks with respect to the Real Property pursuant to
Section 7.11, which mortgages, deeds of trust, leasehold mortgages and
leasehold deeds of trust are or shall be in a form which is satisfactory to the
Agent, with such changes as are necessary or desirable in the opinion of local
counsel to conform with applicable state law and procedure.
"Net Cash Proceeds" shall mean, with respect to the
Disposition of any asset, (a) the gross cash proceeds of such Disposition
(including (i) insurance payments and condemnation awards and (ii) principal
payments in respect of any notes or other instruments received as consideration
for such disposition) less (b) (i) all actual liability for all reasonably
anticipated taxes and reasonable transaction costs payable by the
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Borrower and the Subsidiaries in connection with such disposition, including
income taxes payable as a consequence of such disposition, (ii) the principal
amount of, and the premium, if any, and interest on, any Indebtedness (other
than the Loans) secured by such asset and required to be prepaid upon such
disposition, (iii) any underwriting, brokerage or other customary selling
commissions incurred in connection with such sale or disposition, and
reasonable legal, advisory and other fees and expenses, including title and
recording tax expenses, incurred in connection with such sale or disposition
and (iv) amounts required to be maintained as a reserve against liabilities
associated with such disposition under generally accepted accounting principles
as then in effect (provided that such amounts shall cease to be deducted from
Net Cash Proceeds and may become payable whenever they cease to be so required
to be maintained), provided that the Borrower shall take advantage of all
losses or credits available to it to minimize the income taxes payable with
respect to any Disposition. For purposes of this definition, Net Cash Proceeds
shall include any related tax benefits as a result of capital loss carryback
claims, when and as received.
"Non-Defaulting Bank" shall mean each Bank other than a
Defaulting Bank.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Agent located at
130 Liberty Street, 30th Floor, New York, New York 10006, Attention: Robert C.
Megan, or such other office as the Agent may designate to the Borrower and the
Banks from time to time.
"Obligations" shall mean all amounts, direct or indirect,
contingent or absolute, of every type or description, and at any time existing,
owing to the Agent, the Collateral Agent or any Bank pursuant to the terms of
this Agreement or any other Credit Document.
"Ongoing Receivables Proceeds" shall mean at any time the
lesser of (x) the Invested Amount and (y) the Base Amount, as both such terms
are defined in the Receivables Documents.
"Original Credit Agreement" shall have the meaning provided in
the first WHEREAS clause of this Agreement.
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"Owned Real Property" shall mean all of the real property
(including any buildings and other improvements thereon) which the Borrower
and/or any Subsidiary now owns or hereafter acquires fee simple title to. Any
reference to the "assets" and/or "properties" of the Borrower or any Subsidiary
shall include, without limitation, the "Owned Real Property."
"Participant" shall have the meaning provided in Section
2.04(a).
"Payment Office" shall mean the office of the Agent located at
One Bankers Trust Plaza, New York, New York, ABA Number: 021-001-033, Account
Name: Commercial Loan Division, Account Number: 99-401-268 Reference:
Thermadyne, Attention: Lori Marrone, (Tel) 250-7466, (Fax) 250-7351, or such
other office as the Agent may designate to the Borrower and the Banks from time
to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" shall mean at any time for each Bank, the
percentage obtained by dividing its Commitment at such time by the Total
Commitment at such time.
"Permitted Encumbrances" shall mean (i) those liens,
encumbrances and other matters affecting title to any Real Property listed in
the Mortgage Policies in respect thereof and found, on the date of delivery of
such Mortgage Policies to the Agent in accordance with the terms hereof,
reasonably acceptable by the Agent, (ii) as to any particular Real Property at
any time, such easements, encroachments, covenants, rights of way, minor
defects, irregularities or encumbrances on title which do not, in the
reasonable opinion of the Agent, materially impair such Real Property for the
purpose for which it is held by the mortgagor thereof, or the lien held by the
Collateral Agent, (iii) zoning and other municipal ordinances, which are not
violated in any material respect by the existing improvements and the present
use made by the mortgagor thereof of the Premises (as defined in the respective
Existing Mortgage or Mortgage), (iv) general real estate taxes and assessments
not yet delinquent, and (v) such other items as the Agent may consent to (such
consent not to be unreasonably withheld).
"Permitted Liens" shall have the meaning provided in Section
8.03.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute
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of) the Borrower or a Subsidiary of the Borrower or an ERISA Affiliate, and
each such plan for the five year period immediately following the latest date
on which the Borrower, or a Subsidiary of the Borrower or an ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall mean each Domestic Subsidiary Pledge
Agreement and each Foreign Subsidiary Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Principal Real Property Leases" means the Real Property
Leases set forth on Annex VI and indicated thereon as constituting Principal
Real Property Leases.
"Purchase Money Indebtedness" shall mean (a) Indebtedness of
the Borrower that is incurred to finance part or all of (but not more than) the
purchase price of a tangible asset, provided that (i) neither the Borrower nor
any Subsidiary had at any time prior to such purchase any interest in such
asset other than a security interest or an interest as lessee under an
operating lease and (ii) such Indebtedness is incurred within 30 days after
such purchase, or (b) Indebtedness that (i) constitutes a renewal, extension or
refunding of, but not an increase in the principal amount of, Purchase Money
Indebtedness that is such by virtue of clause (a) or (b) and (ii) bears
interest at a rate per annum that is commercially reasonable at the time such
Indebtedness is incurred.
"Ratio" shall mean for any period, the ratio of (x)
Consolidated Funded Indebtedness on the last day of such period to (y)
Consolidated EBITDA for such period.
"Real Property" shall mean the Owned Real Property and the
Leased Real Property.
"Real Property Lease" shall mean any lease, sublease, license
or other similar agreement now or hereafter entered into by the Borrower or any
Subsidiary pursuant to which the Borrower or any Subsidiary uses or occupies,
or has the right to use or occupy, now or in the future, any real property.
"Receivables Documents" shall mean (i) that certain
Receivables Participation Agreement dated as of December 28, 1994, as amended,
by and between Thermadyne Receivables, Inc., a Delaware corporation, and The
Bank of New York
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(successor-in-interest to NationsBank of Virginia, N.A.), as trustee, (ii) that
certain Receivables Purchase and Sale Agreement dated as of December 28, 1994,
as amended, by and between certain corporations, as Sellers, and Victor
Equipment Company, a Delaware corporation (successor-in-interest to Clark
Industries, Inc.), as Purchaser, (iii) Receivables Purchase and Sale Agreement
dated as of December 28, 1994, as amended, between Victor Equipment Company
(successor-in-interest to Clarke Industries, Inc.), as Seller and Service,
Thermadyne Receivables, Inc., as Purchaser, and Borrower, as Guarantor, and
(iv) all documents, instruments, liens, security interests, and certificates
relating to the same, all as in effect on the Restatement Effective Date and as
subsequently modified with the consent of the Agent
"Receivables Program Assets" shall mean (a) all rights of the
Borrower or any Selling Subsidiary to payment (whether constituting accounts,
chattel paper, instruments, general intangibles or otherwise, and including the
right to payment of any interest or finance charges) which are transferred by
the Borrower, any Selling Subsidiary or the Receivables Subsidiary pursuant to
the Receivables Documents, (b) all right, title and interest of the Borrower or
any Selling Subsidiary in goods relating to the sale that gave rise to such
right to payment, (c) security interests or liens (and the property subject
thereto) purporting to secure such right to payment, (d) all guaranties and
other agreements or arrangements of whatever character from time to time
supporting such right to payment and (e) lock-boxes and bank accounts of the
Borrower or any Selling Subsidiary in which proceeds of any of the foregoing
are held.
"Receivables Subsidiary" shall mean Thermadyne Receivables,
Inc., a Delaware corporation.
"Register" shall have the meaning provided in Section 12.04.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing margin requirements.
"Replaced Bank" shall have the meaning provided in Section
1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events
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as to which the 30-day notice period is waived under subsection .13, .14, .16,
.18, .19 or .20 of PBGC Regulation Section 2615.
"Required Banks" shall mean Non-Defaulting Banks, the sum of
whose Percentages exceeds 51% of the Percentages of all Non-Defaulting Banks.
"Responsible Officer" shall mean the chairman, the Chief
Executive Officer or the Chief Financial Officer of the Borrower or his
replacement in such capacity.
"Restatement Effective Date" shall have the meaning provided
in Section 5.01.
"Restricted Payment" shall mean, with respect to the Borrower
or any of the Subsidiaries, (a) any dividend or other distribution on, any
payment of interest on or principal of, or any other payment in respect of, any
of its Capital Securities (except dividends payable by a Subsidiary to the
Borrower or a Subsidiary or solely in shares of its non-redeemable Capital
Securities), (b) any payment on account of the purchase, redemption,
retirement, exchange, defeasance, conversion or acquisition of, or on account
of any claim relating to or arising out of the offer, sale or purchase of, (i)
any of its Capital Securities, (ii) any option, warrant or other right to
acquire its Capital Securities, Subordinated Debt or the Senior Notes or (iii)
any Subordinated Debt or the Senior Notes (including, without limitation, any
payment, prepayment, defeasance, redemption, purchase pursuant to tender offer
or other acquisition or retirement for value prior to or at its scheduled
maturity or the setting apart of any money for a sinking, defeasance, or other
analogous fund for the payment, prepayment, defeasance, redemption, purchase
pursuant to tender offer or other acquisition or retirement for value prior to
or at its scheduled maturity), (c) any payment of principal, interest, premium
or any other amount owing in respect of Subordinated Debt or the Senior Notes,
or (d) any Investment in or Guaranty on behalf of, directly or indirectly, any
Foreign Subsidiary. For the purposes of this definition, a "payment" shall
include the transfer of any asset or the incurrence of any Indebtedness or
other Liability (the amount of such payment to be the fair market value of such
asset or the amount of such obligation, respectively) but shall not include the
issuance of any Capital Securities of the Borrower other than Mandatorily
Redeemable Stock.
"Revolving Loan" shall have the meaning provided in Section
1.01(A).
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"Scheduled Reduction" shall have the meaning provided in
Section 3.03.
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"SEC" shall mean the Securities and Exchange Commission or any
successor thereto.
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditor" shall have the meaning provided in the
Security Documents.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement.
"Security Agreements" shall mean and include (x) the Security
Agreements executed and delivered pursuant to the Original Credit Agreement as
amended pursuant to the amendments executed and delivered pursuant to Section
5.01(k)(B) and (y) each security agreement, in the form of the security
agreements referred to in clause (x), as amended as described therein, executed
and delivered pursuant to Section 7.11, as amended, supplemented, restated
and/or revised from time to time pursuant to the terms thereof or hereof.
"Security Documents" shall mean and include the Security
Agreements, the Pledge Agreements, any Cash Collateral Agreement, each Existing
Mortgage as amended by the respective Mortgage Amendment and to the extent
delivered pursuant to Section 7.11, each Additional Security Document, as
amended, restated, revised and/or supplemented from time to time.
"Selling Subsidiary" shall mean any Domestic Subsidiary other
than the Receivables Subsidiary.
"Senior Notes" shall mean the Borrower's 10-1/4% Senior Notes
due 2002, as in effect on the Restatement Effective Date and as the same may be
modified, supplemented or amended from time to time pursuant to the terms
hereof and thereof.
"Senior Notes Documents" shall mean and include each of the
documents and other agreements (including, without limitation, the Senior Notes
Indenture) governing or evidencing the Senior Notes, as in effect on the
Restatement Effective Borrowing Date and as the same may be entered into,
modified, supplemented or amended from time to time pursuant to the terms
hereof and thereof.
"Senior Notes Indenture" shall mean the Indenture entered into
by and between the Borrower and IBJ Schroder Bank & Trust Co., as trustee
thereunder, as in
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effect on the Restatement Effective Date and as the same may be modified,
amended or supplemented from time to time in accordance with the terms hereof
and thereof.
"Stated Amount" of each Letter of Credit shall mean the
maximum amount available to be drawn thereunder (regardless of whether any
conditions for drawing could then be met).
"Stock Options" shall mean those options to acquire up to
1,428,570 shares of certain common stock to be granted to certain executive
officers, directors and key employees of the Borrower and its Subsidiaries
pursuant to the Management Option Plan between the Borrower and certain member
of senior management and key employees of the Borrower or any of its
Subsidiaries.
"Stock Purchase Agreement" shall mean the Stock Purchase
Agreement dated April 19, 1996, among Incentive A/S, Thermadyne Holdings
Corporation and Clarke Holding Corporation.
"Subordinated Debt" shall mean (a) the Subordinated Notes and
(b) any other Indebtedness of the Borrower which (i) requires no payment of
principal to be made prior to November 1, 2003, (ii) is junior in right of
payment of principal and interest to the Loans and (iii) is governed by
provisions (including financial terms, subordination provisions, guarantees,
covenants, defaults, remedies and the like) reasonably acceptable to, and
approved in writing by, the Required Banks.
"Subordinated Notes" shall mean the Borrower's 10-3/4%
Subordinated Notes due 2003, as in effect on the Restatement Effective Date and
as the same may be modified, supplemented or amended from time to time pursuant
to the terms hereof and thereof.
"Subordinated Notes Documents" shall mean and include each of
the documents and other agreements (including, without limitation, the
Subordinated Notes Indenture) governing or evidencing the Subordinated Notes,
as in effect on the Restatement Effective Date and as the same may be entered
into, modified, supplemented or amended from time to time pursuant to the terms
hereof and thereof.
"Subordinated Notes Indenture" shall mean the Indenture
entered into by and between the Borrower and Chemical Bank, N.A., as trustee
thereunder, as in effect on the Restatement Effective Date and as the same may
be modified, amended or supplemented from time to time in accordance with the
terms hereof and thereof.
"Subsidiary" of any Person shall mean and include (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof
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ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries, has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean at any time each Domestic
Subsidiary of the Borrower party to the Subsidiary Guaranty.
"Subsidiary Guaranty" shall mean and include (x) the
Subsidiary Guaranty Agreements executed and delivered pursuant to the Original
Credit Agreement as amended pursuant to the amendments executed and delivered
pursuant to Section 5.01(j) and (y) each guaranty, in the form of the
guaranties referred to in clause (x), as amended as described therein, executed
and delivered pursuant to Section 7.11.
"Swingline Expiry Date" shall mean the date which is five
Business Days prior to the Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(B).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Date" shall mean the earlier of (x) the date
which is 30 days after the Restatement Effective Date and (y) the date upon
which the Agent determines in its sole discretion (and notifies the Borrower)
that the primary syndication (and the resulting addition of institutions as
Banks pursuant to Section 12.04) has been completed.
"Tax Allocation Agreement" shall have the meaning provided in
Section 5.01(f).
"Taxes" shall have the meaning provided in Section 4.04.
"TD Australia" shall mean Thermadyne Australia Pty Limited.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of all the Banks at such time.
"Total Unutilized Commitment" shall mean, at any time, (i) the
Total Commitment at such time less (ii) the sum of the aggregate principal
amount of all Loans at such time plus the Letter of Credit Outstandings at such
time.
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"Type" shall mean any type of Loan determined with respect to
the interest option applicable thereto, i.e., a Base Rate Loan or Eurodollar
Loan.
"UCC" shall mean the Uniform Commercial Code as in effect in
the State of New York.
"Unfunded Current Liability" of any Plan means the amount, if
any, by which the actuarial present value of the accumulated plan benefits
under the Plan as of the close of its most recent plan year exceeds the fair
market value of the assets allocable thereto, each determined in accordance
with Statement of Financial Accounting Standards No. 87, based upon the
actuarial assumptions used by the Plan's actuary in the most recent annual
valuation of the Plan.
"Unpaid Drawing" shall have the meaning provided in Section
2.03(a).
"Unutilized Commitment" shall mean for each Bank at any time
(i) the Commitment of such Bank at such time less (ii) the sum of the aggregate
principal amount of all Loans made by such Bank plus an amount equal to such
Bank's Percentage of the Letter of Credit Outstandings at such time.
"Wholly-Owned Subsidiary" shall mean, with respect to any
Person, any Subsidiary of such Person all of the Capital Securities and all
other ownership interests and rights to acquire ownership interests of which
(except directors' qualifying shares and nominee shares) are, directly or
indirectly, owned or controlled by such Person or one or more Wholly-Owned
Subsidiaries of such Person or by such Person and one or more of such
Subsidiaries; unless otherwise specified, "Wholly-Owned Subsidiary" means a
Wholly-Owned Subsidiary of the Borrower.
"Written" or "in writing" shall mean any form of written
communication or a communication by means of telex, facsimile device, telegraph
or cable.
SECTION 11. The Agent.
11.01 Appointment. Each Bank hereby irrevocably designates and
appoints BTCo as Agent of such Bank (such term to include for purposes of this
Section 11, BTCo acting as Collateral Agent) to act as specified herein and in
the other Credit Documents, and each such Bank hereby irrevocably authorizes
BTCo as the Agent to take such action on its behalf under the provisions of
this Agreement and the other Credit Documents and to exercise such powers and
perform such duties as are expressly delegated to the Agent by the terms of
this Agreement and the other Credit Documents, together with such other powers
as are reasonably incidental thereto. The Agent agrees to
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act as such upon the express conditions contained in this Section 11.
Notwithstanding any provision to the contrary elsewhere in this Agreement or in
any other Credit Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein or in the other
Credit Documents, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against the Agent. The
provisions of this Section 11 are solely for the benefit of the Agent and the
Banks, and neither the Borrower nor any of its Subsidiaries shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and the Agent does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with
or for the Borrower or any of its Subsidiaries.
11.02 Delegation of Duties. The Agent may execute any of its
duties under this Agreement or any other Credit Document by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care except to the extent otherwise required by Section 11.03.
11.03 Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall
be (i) liable for any action lawfully taken or omitted to be taken by it or
such Person under or in connection with this Agreement or the other Credit
Documents (except for its or such Person's own gross negligence or willful
misconduct) or (ii) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower, any
of its Subsidiaries or any of their respective officers contained in this
Agreement or the other Credit Documents or for any failure of the Borrower or
any of its Subsidiaries or any of their respective officers to perform its
obligations hereunder or thereunder. The Agent shall not be under any
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or the other Credit Documents, or to inspect the properties, books or
records of the Borrower or any of its Subsidiaries. The Agent shall not be
responsible to any Bank for the effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Agreement or any other
Credit Document or for any representations, warranties, recitals or statements
made herein or therein or made in any written or oral statement or in any
financial or other statements, instruments, reports, certificates or any other
documents in connection herewith or therewith furnished or made by the Agent to
the Banks or by or on behalf of the Borrower or any of its Subsidiaries to the
Agent or any Bank or be required to ascertain or inquire as to the performance
or observance of any of the terms, conditions, provisions, covenants or
agreements contained herein or therein or
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as to the use of the proceeds of the Loans or of the existence or possible
existence of any Default or Event of Default.
11.04 Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram,
facsimile, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons and upon advice and statements of
legal counsel (including, without limitation, counsel to the Borrower or any of
its Subsidiaries), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Credit Document unless it shall first
receive such advice or concurrence of the Required Banks as it deems
appropriate or it shall first be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this
Agreement and the other Credit Documents in accordance with a request of the
Required Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks.
11.05 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has actually received notice from a Bank or the
Borrower referring to this Agreement, describing such Default or Event of
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 Banks. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Banks; 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 Event of
Default as it shall deem advisable in the best interests of the Banks.
11.06 Non-Reliance on Agent, and Other Banks. Each Bank
expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the Agent
hereinafter taken, including any review of the affairs of the Borrower or any
of its Subsidiaries, shall be deemed to constitute any representation or
warranty by the Agent to any Bank. Each Bank represents to the Agent that it
has, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Borrower and its Subsidiaries and
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made its own decision to make its Loans hereunder and enter into this
Agreement. Each Bank also represents that it will, independently and without
reliance upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, assets, operations, property, financial and other
condition, prospects and creditworthiness of the Borrower and its Subsidiaries.
The Agent shall not have any duty or responsibility to provide any Bank with
any credit or other information concerning the business, operations, assets,
property, financial and other condition, prospects or creditworthiness of the
Borrower or any of its Subsidiaries which may come into the possession of the
Agent or any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates.
11.07 Indemnification. The Banks agree to indemnify the Agent
in its capacity as such ratably according to their respective "percentages" as
used in determining the Required Banks at such time, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, reasonable expenses or disbursements of any kind whatsoever which
may at any time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, incurred by or asserted against the
Agent in its capacity as such in any way relating to or arising out of this
Agreement or any other Credit Document, or any documents contemplated by or
referred to herein or the transactions contemplated hereby or any action taken
or omitted to be taken by the Agent under or in connection with any of the
foregoing, but only to the extent that any of the foregoing is not paid by the
Borrower or any of its Subsidiaries; provided, that no Bank shall be liable to
the Agent for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting solely from the gross negligence or willful misconduct
of the Agent. To the extent any Bank would be required to indemnify the Agent
pursuant to the immediately preceding sentence but for the fact that it is a
Defaulting Bank, such Defaulting Bank shall not be entitled to receive any
portion of any payment or other distribution hereunder until each other Bank
shall have been reimbursed for the excess, if any, of the aggregate amount paid
by such Bank under this Section 11.07 over the aggregate amount such Bank would
have been obligated to pay had such first Bank not been a Defaulting Bank. If
any indemnity furnished to the Agent for any purpose shall, in the opinion of
the Agent be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished. The agreements in this Section 11.07
shall survive the payment of all Obligations.
11.08 Agent in its Individual Capacity. The Agent and its
affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower and its Subsidiaries as though the Agent
were not the Agent hereunder. With
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respect to the Loans made by it and all Obligations owing to it, the Agent
shall have the same rights and powers under this Agreement as any Bank and may
exercise the same as though it were not the Agent and the terms "Bank" and
"Banks" shall include the Agent in its individual capacity.
11.09 Holders. The Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Agent. Any request, authority or consent of any
Person or entity who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
11.10 Resignation of the Agent; Successor Agent. The Agent may
resign as the Agent upon 20 days' notice to the Banks. Upon the resignation of
the Agent, the Required Banks shall appoint from among the Banks a successor
Agent which is a bank or a trust company for the Banks subject to prior
approval by the Borrower (such approval not to be unreasonably withheld),
whereupon such successor agent shall succeed to the rights, powers and duties
of the Agent, and the term "Agent" shall include such successor agent effective
upon its appointment, and the resigning Agent's rights, powers and duties as
the Agent shall be terminated, without any other or further act or deed on the
part of such former Agent or any of the parties to this Agreement. After the
resignation of the Agent hereunder, the provisions of this Section 11 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees to: (i)
whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Agent (including, without
limitation, the reasonable fees and disbursements of White & Case) in
connection with the negotiation, preparation, execution and delivery of the
Credit Documents and the documents and instruments referred to therein and any
amendment, waiver or consent relating thereto and in connection with the
Agent's syndication efforts with respect to this Agreement; (ii) pay all
reasonable out-of-pocket costs and expenses of the Agent and each of the Banks
in connection with the enforcement of the Credit Documents and the documents
and instruments referred to therein and, after an Event of Default shall have
occurred and be continuing, the protection of the rights of the Agent and each
of the Banks thereunder (including, without limitation, the reasonable fees and
disbursements of counsel for the Agent and for each of the Banks); (iii) pay
and hold each of the Banks harmless from and against any and all
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present and future stamp and other similar taxes with respect to the foregoing
matters and save each of the Banks harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Bank) to pay such taxes; and (iv) indemnify
the Agent, the Collateral Agent and each Bank, its officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all losses, liabilities, claims, damages or expenses incurred
by any of them as a result of, or arising out of, or in any way related to, or
by reason of, any investigation, litigation or other proceeding (whether or not
the Agent, the Collateral Agent or any Bank is a party thereto) related to the
entering into and/or performance of this Agreement or any other Credit Document
or the use of the proceeds of any Loans hereunder or the Transaction or the
consummation of any other transactions contemplated in any Credit Document
(whether any such counsel's fees are incurred in connection with any
investigation, litigation or other proceeding between the Borrower and the
Agent or any Bank or between the Agent or any third Person or otherwise) or (b)
the actual or alleged presence of Hazardous Materials in the air, surface water
or groundwater or on the surface or subsurface of any Real Property owned or at
any time operated by the Borrower or any of its Subsidiaries, the release,
generation, storage, transportation, handling or disposal of Hazardous
Materials at any location, whether or not owned or operated by the Borrower or
any of its Subsidiaries, the non- compliance of any Real Property with foreign,
federal, state and local laws, regulations, and ordinances (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the Borrower, any of its Subsidiaries or
any Real Property owned or at any time operated by the Borrower or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any such
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified), including, without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation,
litigation or other proceeding.
12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance
of an Event of Default, each Bank is hereby authorized at any time or from time
to time, without presentment, demand, protest or other notice of any kind to
the Borrower or any of its Subsidiaries or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other Indebtedness at any time held
or owing by such Bank (including, without limitation, by branches and agencies
of such Bank wherever located) to or for the credit or the account of the
Borrower or any Subsidiary Guarantor against and on account of the Obligations
and liabilities of the Borrower or any of its Subsidiaries to such Bank under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations of
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the Borrower or any of its Subsidiaries purchased by such Bank pursuant to
Section 12.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Bank shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
12.03 Notices. Except as otherwise expressly provided herein,
all notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered, if to any Credit Party,
at the address specified opposite its signature below or in the other relevant
Credit Documents, as the case may be; if to any Bank, at its address specified
for such Bank on Annex II hereto; or, at such other address as shall be
designated by any party in a written notice to the other parties hereto. All
such notices and communications shall be mailed, telegraphed, telexed,
telecopied or cabled or sent by overnight courier, and shall be effective when
received.
12.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, that no Credit Party
may assign or transfer any of its rights or obligations hereunder without the
prior written consent of the Banks and, provided further, that, although any
Bank may transfer, assign or grant participations in its rights hereunder, such
Bank shall remain a "Bank" for all purposes hereunder and the transferee,
assignee or participant, as the case may be, shall not constitute a "Bank"
hereunder and, provided further, that no Bank shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Letter of Credit (unless such Letter of Credit is not
extended beyond the Maturity Date) in which such participant is participating,
or reduce the rate or extend the time of payment of interest or Fees (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the participant's participation over the amount thereof then in effect (it
being understood that a waiver of any Default or Event of Default or of a
mandatory reduction in the Total Commitment shall not constitute a change in
the terms of such participation, and that an increase in any Commitment or Loan
shall be permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement to the extent relating to such participation or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Credit Documents). In the case
of any such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights
against such Bank in respect of such participation to be those set forth in the
agreement
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executed by such Bank in favor of the participant relating thereto) and all
amounts payable by the Borrower hereunder shall be determined as if such Bank
had not sold such participation.
(b) Notwithstanding the foregoing, any Bank may (x) assign all
or a portion of its Commitment (and related outstanding Obligations hereunder)
to any Affiliate of such Bank or to one or more Banks or (y) assign all, or if
less than all, a portion equal to at least $5,000,000 in the aggregate for the
assigning Bank, of its Commitment (and related outstanding Obligations
hereunder) to one or more Eligible Transferees, each of which assignees shall
become a party to this Agreement as a Bank by execution of an Assignment and
Assumption Agreement, provided that (i) at such time Annex I shall be deemed
modified to reflect the Commitments of such new Bank and of the existing Banks,
(ii) upon surrender of the old Notes, new Notes will be issued, at the
Borrowers' expense, to such new Bank and to the assigning Bank, such new Notes
to be in conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments, (iii)
the consent of the Agent and the Letter of Credit Issuer shall be required in
connection with any such assignment pursuant to clause (y) above (which consent
shall not be unreasonably withheld or delayed) and (iv) the Agent shall receive
at the time of each such assignment, from the assigning or assignee Bank, the
payment of a non-refundable assignment fee of $3,500 and, provided further,
that such transfer or assignment will not be effective until recorded by the
Agent on the Register pursuant to Section 12.04(d). To the extent of any
assignment pursuant to this Section 12.04(b), the assigning Bank shall be
relieved of its obligations hereunder with respect to its assigned Commitment.
At the time of each assignment pursuant to this Section 12.04(b) to a Person
which is not already a Bank hereunder and which is not a United States person
(as such term is defined in Section 7701(a)(30) of the Code) for Federal income
tax purposes, the respective assignee Bank shall provide to the Borrower and
the Agent the appropriate Internal Revenue Service Forms (and, if applicable a
Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent
that an assignment of all or any portion of a Bank's Commitment and related
outstanding Obligations pursuant to this Section 12.04(b) would, at the time of
such assignment, result in increased costs under Section 1.10, 1.11, 2.05 or
4.04 from those being charged by the respective assigning Bank prior to such
assignment, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower shall be obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.
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(d) The Agent shall maintain, as agent of Borrower, at its
Notice Office a copy of each Assignment Agreement delivered to and accepted by
it and a register for the recordation of the names and addresses of the Banks
and the Commitment of, and principal amount of the Loans owing to, each Bank
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Bank at any
reasonable time and from time to time upon reasonable prior notice.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Agent or any Bank in exercising any right, power or privilege
hereunder or under any other Credit Document and no course of dealing between
any Credit Party and the Agent or any Bank shall operate as a waiver thereof;
nor shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights and remedies herein expressly provided are
cumulative and not exclusive of any rights or remedies which the Agent or any
Bank would otherwise have. No notice to or demand on any Credit Party in any
case shall entitle any Credit Party to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights of the
Agent or the Banks to any other or further action in any circumstances without
notice or demand.
12.06 Payments Pro Rata. (a) The Agent agrees that promptly
after its receipt of each payment from or on behalf of any Credit Party in
respect of any Obligations of such Credit Party, it shall, except as otherwise
provided in this Agreement, distribute such payment to the Banks (other than
any Bank that has consented in writing to waive its pro rata share of such
payment) pro rata based upon their respective shares, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise) which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings or Fees, of a sum which with respect to the
related sum or sums received by other Banks is in a greater proportion than the
total of such Obligation then owed and due to such Bank bears to the total of
such Obligation then owed and due to all of the Banks immediately prior to such
receipt, then such Bank receiving such excess payment shall purchase for cash
without recourse or warranty from the other Banks an interest in the
Obligations of the respective Credit Party to such Banks in such amount as
shall result in a proportional participation by all of the Banks in such
amount; provided, that if all or any portion of such excess amount is
thereafter
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recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
12.07 Calculations; Computations. (a) The financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Banks); provided, that except as otherwise specifically
provided herein, all computations determining compliance with Section 8,
including definitions used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the December 31, 1995 financial statements delivered to
the Banks pursuant to Section 6.10(b).
(b) All computations of interest on the Loans and Fees
hereunder shall be made on the basis of the actual number of days elapsed over
a year of 360 days, as applicable.
12.08 Governing Law; Submission to Jurisdiction; Venue. (a)
This Agreement and the other Credit Documents and the rights and obligations of
the parties hereunder and thereunder shall be construed in accordance with and
be governed by the law of the State of New York. Any legal action or proceeding
with respect to this Agreement or any other Credit Document may be brought in
the courts of the State of New York or of the United States for the Southern
District of New York, and, by execution and delivery of this agreement, the
Borrower hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of the aforesaid courts. The
Borrower hereby irrevocably designates, appoints and empowers CT Corporation
System with offices on the date hereof at 1633 Broadway, New York, New York
10019 as its designee, appointee and agent to receive, accept and acknowledge
for and on its behalf, and in respect of its property, service of any and all
legal process, summons, notices and documents which may be served in any such
action or proceeding. If for any reason such designee, appointee and agent
shall cease to be available to act as such, the Borrower agrees to designate a
new designee, appointee and agent in New York City on the terms and for the
purposes of this provision satisfactory to the Agent under this Agreement. The
Borrower irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Borrower, at
its address for notices pursuant to Section 12.03, such service to become
effective 30 days after such mailing. Nothing herein shall affect the right of
the Agent, any Bank or the holder of any Note to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against the Borrower in any other jurisdiction.
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(b) The Borrower hereby irrevocably waives any objection which
it may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Agreement or
any other Credit Document brought in the courts referred to in clause (a) above
and hereby further irrevocably waives and agrees not to plead or claim in any
such court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A complete set of counterparts executed by all the parties hereto
shall be lodged with the Borrower and the Agent.
12.10 Effectiveness. The Agent will give the Borrower and each
Bank prompt written notice of the occurrence of the Restatement Effective Date.
12.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision of
this Agreement.
12.12 Amendment or Waiver. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the Required Banks and (except in the case of a waiver)
the Borrower; provided, that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) being
directly affected thereby, (i) extend the Maturity Date (it being understood
that any waiver of any prepayment shall not constitute any such extension) or
the expiration of any Letter of Credit beyond the Maturity Date, or reduce the
rate or extend the time of payment of interest thereon (other than as a result
of waiving the applicability of any post-default increase in interest rates) or
Fees, or reduce the principal amount thereof, (ii) release all or substantially
all of the Collateral (except as expressly provided in the Credit Documents),
or release any Subsidiary Guarantor from its obligations thereunder (except as
expressly provided in the Credit Documents), (iii) amend, modify or waive any
provision of this Section 12.12, (iv) reduce the percentage specified in the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, additional extensions of credit pursuant to this Agreement may
be included in the determination of the Required Banks on substantially the
same basis as the extensions of Commitments are included on the Restatement
Effective Date) or (v) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement or any other Credit
Document except in accordance with the terms hereof or thereof; provided
further, that no such change, waiver, discharge or termination shall (w)
increase the Commitments of any Bank over the amount thereof then in effect
without
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the consent of such Bank (it being understood that waivers or modifications of
conditions precedent, covenants, Defaults or Events of Default or of a
mandatory reduction in the Total Commitment shall not constitute an increase of
the Commitment of any Bank), (x) without the consent of the Letter of Credit
Issuer, amend, modify or waive any provision of Section 2 or alter its rights
or obligations with respect to Letters of Credit or (y) without the consent of
the Agent, amend, modify or waive any provision of Section 11 as same applies
to the Agent or any other provision as same relates to the rights or
obligations of the Agent; or
(b) If, in connection with any proposed change, waiver,
discharge or termination with respect to any of the provisions of this
Agreement as contemplated by clauses (i) through (v), inclusive, of the first
proviso to Section 12.12(a), the consent of the Required Banks is obtained but
the consent of one or more of such other Banks whose consent is required is not
obtained, then the Borrower shall have the right, to replace each such
non-consenting Bank or Banks (so long as all non-consenting Banks are so
replaced) with one or more Replacement Banks pursuant to Section 1.13 so long
as at the time of such replacement, each such Replacement Bank consents to the
proposed change, waiver, discharge or termination, provided that the Borrower
shall not have the right to replace a Bank solely as a result of the exercise
of such Bank's rights (and the withholding of any required consent by such
Bank) pursuant to the second proviso to Section 12.12(a).
12.13 Survival. All indemnities set forth herein including,
without limitation, in Section 1.10, 1.11, 4.04, 11.07 or 12.01, shall survive
the execution and delivery of this Agreement and the making and repayment of
the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or affiliate
of such Bank; provided, that the Borrower shall not be responsible for costs
arising under Section 1.10, 1.11, 2.06 or 4.04 resulting from any such transfer
(other than a transfer pursuant to Section 1.12) to the extent such costs would
not otherwise be applicable to such Bank in the absence of such transfer.
12.15 Confidentiality. Each of the Banks agrees that it will
use its best efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, counsel or other professional advisors,
to affiliates or to another Bank if the Bank or such Bank's holding or parent
company in its sole discretion determines that any such party should have
access to such information) any information with respect to the Borrower or any
of its Subsidiaries which is furnished pursuant to this Agreement and which is
designated by the Borrower to the Banks in writing as confidential; provided,
that any Bank may disclose any such information (a) as has become generally
available to the public, (b) as may be required or appropriate in any report,
statement or testimony submitted to any municipal, state or Federal regulatory
body
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having or claiming to have jurisdiction over such Bank or to the Federal
Reserve Board or the Federal Deposit Insurance Corporation or similar
organizations (whether in the United States or elsewhere) or their successors,
(c) as may be required or appropriate in response to any summons or subpoena or
in connection with any litigation, (d) in order to comply with any law, order,
regulation or ruling applicable to such Bank, and (e) to any prospective
transferee in connection with any contemplated transfer of any of the Notes or
any interest therein by such Bank; provided, that such prospective transferee
agrees to be bound by the provisions of this Section. No Bank shall be
obligated or required to return any materials furnished by the Borrower or any
Subsidiary. The Borrower hereby agrees that the failure of a Bank to comply
with the provisions of this Section 12.15 shall not relieve the Borrower of any
of its obligations to such Bank under this Agreement and the other Credit
Documents.
12.16 Waiver of Jury Trial. Each of the parties to this
Agreement hereby irrevocably waives all right to a trial by jury in any action,
proceeding or counterclaim arising out of or relating to this Agreement, the
other Credit Documents or the transactions contemplated hereby or thereby.
12.17 Clarke Sale Proceeds. On the date of its receipt
thereof, the Borrower shall deposit the Clarke Proceeds in a cash collateral
account maintained with the Agent, which account shall be governed by and
subject to an agreement (the "Cash Collateral Agreement") reasonably
satisfactory to the Agent, provided that the Borrower may utilize any or all of
the Clarke Proceeds to voluntarily prepay Revolving Loans pursuant to Section
4.01 and any such Clark Proceeds so utilized will not have to be deposited in
such cash collateral account and if all of the Clarke Proceeds are utilized to
make such voluntary repayment then the Cash Collateral Agreement need not be
executed and delivered and no such cash collateral account will be established.
* * *
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Agreement to be duly executed and delivered as of the date
first above written.
Address:
101 South Hanley Road THERMADYNE HOLDINGS CORPORATION
Suite 300
St. Louis, MO 63105
Attention: James H. Tate
Tel: (314) 746-4822
Fax: (314) 746-2349
By /s/ JAMES H. TATE
---------------------------------
Title: Senior Vice President
Chief Financial Officer
130 Liberty Street BANKERS TRUST COMPANY
New York, NY 10006 Individually and as Agent
Attention: Lori Marrone
Tel: (212) 250-7466
Fax: (212) 250-7351
By /s/ MARY KAY COYLE
---------------------------------
Title: Managing Director
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EXHIBIT 2.4
THERMADYNE HOLDINGS CORPORATION ANNOUNCES
DIVESTITURE OF FLOOR MAINTENANCE BUSINESS
ST. LOUIS, Missouri, June 27, 1996 - Thermadyne Holdings Corporation
(NASDAQ: TDHC) announced that it has completed the previously announced
transaction to sell its Floor Maintenance business to Incentive A/S for $115
million. The purchase price is comprised of $108.4 million in cash and
approximately $6.6 million in assumed long-term liabilities. The Floor
Maintenance business manufactures and markets commercial and industrial floor
and carpet care equipment under the "Clarke", "A.L. Cook" and "American
Lincoln" brand names and also manufactures a line of pressure washers marketed
under the "Delco" brand name. The Floor Maintenance segment had 1995 pro forma
sales of $120.6 million and sales of $32.2 million for the three months ended
March 31, 1996.
Randall E. Curran, Chairman and CEO of Thermadyne, stated, "Closing this
transaction completes the task of focusing Thermadyne on its core cutting and
welding and wear resistance businesses and meets our goal of reducing the
Company's long-term debt."
The Company also announced it entered into an Amended and Restated Bank
Credit Agreement whereby the Company converted its existing Revolving Credit
Facility, Term A loan and Term B loan, into a $250 million Revolving Credit
Facility. The new facility has a term of five years and reduces by $25 million
at the end of three years and by an additional $75 million at the end
<PAGE> 2
of the fourth year. After application of the net proceeds from the sale of the
Floor Maintenance business, approximately $115 million of indebtedness will be
outstanding under the new facility. James H. Tate, Senior Vice President and
CFO of Thermadyne, noted, "The Revolving Credit Facility provides Thermadyne
with the financial flexibility to respond quickly to future acquisition
opportunities."
Thermadyne, headquartered in St. Louis, is a multinational manufacturer of
cutting, welding, wear resistant and hardfacing products. Thermadyne had sales
of $413.9 million and $129.2 million for the year ended December 31, 1995 and
the three months ended March 31, 1996.
# # #
For more information, contact James H. Tate, Senior Vice President and
CFO, Thermadyne Holdings Corporation, (314) 746-2107
