<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(D)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 4)
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GLOBAL INDUSTRIAL TECHNOLOGIES, INC.
(Name of Subject Company)
------------------------------
HEAT ACQUISITION CORP.
AND
RHI AG
(Bidders)
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COMMON STOCK, PAR VALUE $0.25 PER SHARE
(Title of Class of Securities)
------------------------------
379335102
(CUSIP Number of Class of Securities)
------------------------------
DR. GEORG OBERMEIER
CHIEF EXECUTIVE OFFICER
RHI AG
MOMMSENGASSE 35
A-1040 VIENNA, AUSTRIA
43-1-50213-123
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications on Behalf of Bidders)
------------------------------
COPIES TO:
ROBERT A. PROFUSEK, ESQ.
JONES, DAY, REAVIS & POGUE
599 LEXINGTON AVENUE
NEW YORK, NEW YORK 10022
(212) 326-3939
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<PAGE>
This Amendment No. 4 amends the Tender Offer Statement on Schedule 14D-1, as
amended (the "Statement"), filed by RHI AG, an Austrian stock corporation
("Parent"), and Heat Acquisition Corp., a Delaware corporation and an indirect,
wholly owned subsidiary of Parent ("Purchaser"), relating to the offer by
Purchaser to purchase all of the outstanding shares of common stock, par value
$0.25 per share (together with the associated preferred share purchase rights
issued pursuant to the Rights Agreement, dated October 31, 1995, as amended,
between Global Industrial Technologies, Inc., a Delaware corporation ("the
Company"), and The Bank of New York, the "Shares"), of the Company at a purchase
price of $13.00 per Share, net to the seller in cash.
Except as otherwise indicated herein, the information set forth in the
Statement remains unchanged, and each capitalized term used herein and not
defined herein has the meaning ascribed to such term in the Statement.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The information set forth in Item 4 is hereby amended and restated as
follows:
Purchaser estimates that the total amount of funds required to purchase the
fully diluted number of shares in the Offer and the Merger will be $300 million.
Purchaser estimates that the total amount of funds that may be required to repay
the Net Debt of the Company will be no more than $240 million. Purchaser
estimates that the total amount of funds required to consummate the transactions
contemplated by the Merger Agreement, including fees and expenses related to the
Offer and the Merger and initial expenditures, will be no more than $635
million.
Purchaser plans to obtain funds needed for the Offer and the Merger through
a capital contribution from Parent or a subsidiary of Parent. Parent intends to
fund substantially all of this capital contribution through the equity offering
of Parent shares completed on October 13, 1999 and credit facilities to be made
available pursuant to the Credit Agreement entered into on October 13, 1999 (the
"Credit Agreement") between RHI Finance ApS, a subsidiary of Parent, as borrower
(the "Borrower"), and Raiffeisen Zentralbank Osterreich Aktiengesellschaft,
Creditanstalt AG, ABN Amro Bank N.V., Filiale Wien, Bank Austria
Aktiengesellschaft, Bank fur Arbeit und Wirtschaft AG, Erste Bank der
oesterreichischen Sparkassen AG and Osterreichische Volksbanken AG, as lenders
(collectively referred to as the "Lenders").
On October 13, 1999, Parent completed an equity offering which increased its
capital by 6,000,000 new shares and resulted in proceeds of Euro 143 million.
Pursuant to the Credit Agreement, the Lenders have agreed to provide Euro
440 million to Borrower subject to the terms and conditions of the Credit
Agreement and the General Terms and Conditions of the Austrian credit
institutions generally, in their current version. The credit facilities will be
comprised of a term A loan of up to Euro 88 million (the "Term A Loan") and a
term B loan of up to Euro 352 million (the "Term B Loan", together with the Term
A Loan, the "Credit Facilities"). The proceeds of the Credit Facilities must be
used to finance the acquisition of the Shares pursuant to the Offer and the
Merger, the financing of any expenses incurred or to be incurred in connection
with the acquisition of Shares pursuant to the Offer and the Merger and,
following such acquisition, to refinance existing indebtedness of the Company
and its subsidiaries. The loans must be drawn by March 31, 2000.
The Credit Agreement is conditioned, among other things, upon: (i) Parent
making an equity contribution of not less than Euro 130,811,101 to Purchaser to
finance the acquisition of Shares pursuant to the Offer and the Merger, (ii)
issuance of bill guaranties by Oesterreichische Kontrollbank Aktiengesellschaft
("OeKB") and the execution of re-financing documents by the Lenders and OeKB for
Euro 440 million, (iii) the execution and delivery of security agreements
evidencing pledges of (A) all issued shares of Purchaser and (B) all Shares
acquired by Purchaser pursuant to the Offer, (iv) the execution and delivery of
guaranties of borrowings by both Parent and certain subsidiaries of Parent, (v)
the execution and delivery of a control agreement between Purchaser, the Lenders
and the Depositary, (vi) the completion of the Offer on the terms set forth in
the Merger Agreement and the Offer to Purchase in existence on the date of the
execution of the Credit Agreement, and (vii) confirmation of certain information
with respect to the good standing and authority of Purchaser and the Borrower
and the enforceability against Purchaser and the Borrower of the agreements
executed by such parties.
<PAGE>
The Lenders have the ability to terminate the credit agreement and
accelerate payment of any borrowings outstanding in the following circumstances:
(i) if Borrower fails to meet its payment obligations when due, (ii) if Borrower
or any subsidiary of Parent with an obligation under the Credit Agreement or the
security agreements fails to meet any of its obligations despite a request for
performance and a two week cure period, (iii) upon a breach or partial breach or
an inaccurate representation made pursuant to the Credit Agreement or the
security agreements referenced therein, which continues uncured for a period of
two weeks, (iv) upon a material worsening of Parent's credit solvency, (v) upon
a payment default by Parent or any of its subsidiaries in an amount exceeding
Euro 10 million owed to a third party creditor, which default remains uncured
for 30 days after notice by the Lenders and which non-payment was not the result
of a good faith dispute as to the payment obligation, or (vi) in the event the
securities pledged or offered materially depreciate in value or upon the threat
of such material depreciation and additional securities are not provided within
two weeks to satisfy the Lenders.
Interest rates for Term A Loan are the variable procedural interest rate of
OeKB applicable to the respective calendar quarter and published in the Official
Journal of the newspaper WIENER ZEITUNG plus a margin of 0.75% per year.
Interest rates for the Term B Loan are fixed at the basic interest rate
applicable for credit terms of 5 to 8 years and published by OeKB with validity
for the third calendar quarter of 1999 plus a margin of 0.75% per year.
The Term A Loan must be repaid in the following installments: (i) Euro 44
million on September 30, 2000 and (ii) Euro 44 million on September 30, 2001.
The Term B Loan must be repaid in the following installments: (i) Euro 42
million on September 30, 2002, (ii) Euro 42 million on September 30, 2003, (iii)
Euro 42 million on September 30, 2004, (iv) Euro 42 million on September 30,
2005, (v) Euro 42 million on September 30, 2005, (vi) Euro 42 million on
September 30, 2006, and (vii) Euro 142 million on September 30, 2007. In the
event that any portion of the Credit Facilities has not been utilized, the
payment installments shall be reduced to reflect the actual utilization of the
Credit Facilities.
The foregoing summary of the Credit Agreement is qualified in its entirety
by reference to the English Translation of the Credit Agreement, which is filed
as an exhibit to the Schedule 14D-1, of which this Offer to Purchase is an
exhibit.
As a result of the Financing Condition, the Purchaser's obligation to accept
and pay for the Shares tendered in the Offer is conditioned upon Parent and
Purchaser having available to them the Financing on terms reasonably
satisfactory to Parent given the structure of the financing contemplated by the
Merger Agreement, including, without limitation, the financing contemplated to
be arranged by Parent.
It is anticipated that indebtedness incurred by Borrower under the Credit
Facilities will be repaid from a variety of sources, including, without
limitation, funds generated internally by Purchaser or its successor, through
additional borrowings, or through a combination of such sources. No final
decisions have been made concerning the method Borrower will employ to repay
such indebtedness. Such decisions when made will be based on Parent's and
Borrower's review from time to time of the advisability of particular actions,
including the availability of cash flow generated by Parent and its
subsidiaries, prevailing interest rates, market conditions and other financial
and economic conditions.
ITEM 5. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE BIDDER.
The information set forth in Item 5(b) is hereby amended and supplemented as
follows:
On September 3, 1999, the FTC indicated to Parent that it would not object
to the consummation of the Merger if Parent, prior to the consummation of the
Merger, enters into binding agreements to divest certain assets relating to the
manufacture of certain refractory products on terms and to one or more buyers
approved by the FTC.
<PAGE>
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
*(a)(1) Offer To Purchase, dated July 16, 1999
*(a)(2) Letter of Transmittal
*(a)(3) Notice of Guaranteed Delivery
*(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees
*(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
*(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form
W-9
*(a)(7) Form of Summary Advertisement, dated July 19, 1999
*(a)(8) Text of Joint Press Release of Parent and the Company, dated July 12, 1999
*(a)(9) Text of Press Release of Parent, dated August 4, 1999
*(a)(10) Text of Press Release of Parent, dated August 6, 1999
*(a)(11) Text of Press Release of Parent, dated September 29, 1999
(a)(12) Text of Press Release of Parent, dated October 14, 1999 (Free English Translation
for Convenience Purposes Only)
(b)(1) Credit Agreement, dated October 13, 1999, between RHI Finance ApS, as Borrower, and
Raiffeisen Zentralbank Osterreich Aktiengesellschaft, Creditanstalt AG, ABN Amro
Bank N.V., Filiale Wien, Bank Austria Aktiengesellschaft, Bank fur Arbeit und
Wirtschaft AG, Erste Bank der oesterreichischen Sparkassen AG and Osterreichische
Volksbanken AG, collectively, the Lenders, for [EURO]440 million (Free English
Translation for Convenience Purposes Only)
(b)(2) Guaranty Agreement dated October , 1999, between Parent and the Lenders (Free
English Translation for Convenience Purposes Only)
*(c)(1) Agreement and Plan of Merger, dated July 12, 1999, among Parent, Purchaser and the
Company
(d) Not applicable
(e) Not applicable
(f) Not applicable
</TABLE>
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* Previously filed.
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
<TABLE>
<S> <C> <C>
HEAT ACQUISITION CORP.
By: /s/ JAKOB MOSSER
-----------------------------------------
Name: Jakob Mosser
Title: President
RHI AG
By: /s/ JAKOB MOSSER
-----------------------------------------
Name: Jakob Mosser
Title: Member of Management Board
</TABLE>
Dated: October 15, 1999
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
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<S> <C>
*(a)(1) Offer To Purchase, dated July 16, 1999
*(a)(2) Letter of Transmittal
*(a)(3) Notice of Guaranteed Delivery
*(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees
*(a)(5) Form of Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees
*(a)(6) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9
*(a)(7) Form of Summary Advertisement, dated July 19, 1999
*(a)(8) Text of Joint Press Release of Parent and the Company, dated July 12, 1999
*(a)(9) Text of Press Release of Parent, dated August 4, 1999
*(a)(10) Text of Press Release of Parent, dated August 6, 1999
*(a)(11) Text of Press Release of Parent, dated September 29, 1999
(a)(12) Text of Press Release of Parent, dated October 14, 1999 (Free English Translation for Convenience
Purposes Only)
(b)(1) Credit Agreement, dated October 13, 1999, between RHI Finance ApS, as Borrower, and Raiffeisen
Zentralbank Osterreich Aktiengesellschaft, Creditanstalt AG, ABN Amro Bank N.V., Filiale Wien, Bank
Austria Aktiengesellschaft, Bank fur Arbeit und Wirtschaft AG, Erste Bank der oesterreichischen
Sparkassen AG and Osterreichische Volksbanken AG, collectively, the Lenders, for [EURO]440 million (Free
English Translation for Convenience Purposes Only)
(b)(2) Guaranty Agreement, dated October 14, 1999, between Parent and the Lenders (Free English Translation for
Convenience Purposes Only)
(b) Not applicable
*(c)(1) Agreement and Plan of Merger, dated July 12, 1999, among Parent, Purchaser and the Company
(d) Not applicable
(e) Not applicable
(f) Not applicable
</TABLE>
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* Previously filed.
<PAGE>
Exhibit (a)(12)
FREE ENGLISH TRANSLATION FOR
CONVENIENCE PURPOSES ONLY
News - OVERVIEW
CAPITAL INCREASE OF RHI SUCCESSFULLY COMPLETED
o PRICE OF NEW SHARES SET AT EUR 23,90
o CAPITAL INCREASE OVERSUBSCRIBED
The capital increase of RHI AG ended yesterday successfully. Taking into
consideration yesterdays closing price of the shares, RHI in coordination with
the lead manager of the transaction, Erste Bank, set the final price of the new
shares at EUR 23,90.
Despite the recently difficult situation on the capital markets, the demand by
private investors as well as institutional investors was very high. Therefore
institutional investors not holding the necessary subscription rights had to be
reduced. Private customers were rationed preferred.
The transaction and therefore the planned takeover of GIT / Harbison-Walker,
which ensures RHI's world-wide leading position in the refractories market, was
honored by the capital market.
The increase of RHI's capital by 6,000.000 new shares results in proceeds of EUR
143 million., or ATS 1.97 billion. As announced earlier, the additional credit
facilities are already in place. Therefore the total financing of the planned
acquisition of GIT / Harbison-Walker is concluded with this successful capital
increase.
The new RHI shares are expected to be listed at the Vienna and Frankfurt Stock
Exchanges on October 19, 1999. As of November 22, 1999 the new shares will be
part of the ATX, ATX50 and ATX50P indices.
FOR FURTHER INFORMATION PLEASE CONTACT:
RHI AG / Peter Hofmann
Phone (+43)(1) 50213-123
Fax (+43)(1) 50213-130
e-mail: [email protected]
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<PAGE>
Exhibit b(1)
FREE ENGLISH TRANSLATION FOR
CONVENIENCE PURPOSES ONLY
[UNOFFICIAL TRANSLATION - FOR WORKING PURPOSES ONLY]
CREDIT AGREEMENT
between
RHI FINANCE APS
Strandvejen 44, 2900 Hellerup
Denmark
as borrower
(hereinafter referred to as "BORROWER")
and
RAIFFEISEN ZENTRALBANK OSTERREICH AKTIENGESELLSCHAFT
Am Stadtpark 9, 1030 Vienna
(hereinafter referred to as "RZB")
CREDITANSTALT AG
Schottengasse 6-8, 1010 Vienna
(hereinafter referred to as "CA")
ABN AMRO BANK N.V., FILIALE WIEN
Schottenring 35, 1010 Vienna
BANK AUSTRIA AKTIENGESELLSCHAFT
Vordere Zollamtsstra(beta)e 13, 1030 ViENNA
BANK FUR ARBEIT UND WIRTSCHAFT AG
Seitzergasse 2-4, 1010 Vienna
ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG
Graben 21, 1010 Vienna
OSTERREICHISCHE VOLKSBANKEN AG
Perergringasse 3, 1090 Vienna
as lenders
(hereinafter collectively referred to as "LENDERS")
FOR EURO 440 MILLION
<PAGE>
1. BASIS OF THE AGREEMENT, FINANCING OBJECTIVE
1.1 GIT SHARE ACQUISITION
Borrower is a wholly-owned direct subsidiary of RHI AG, Mommsengasse 35, 1040
Vienna (hereinafter referred to as "RHI AG"). RHI AG is the sole shareholder of
Heat Acquisition Corp. (hereinafter referred to as "HEAT"), a company under the
laws of the U.S. Federal State of Delaware with its registered office in
Cleveland, Ohio, through Veitsch-Radex GmbH, VRD Americas B.V. (hereinafter
referred to as "VRD"), a Dutch company, and North American Refractories Company
(hereinafter referred to as "NARCO").
In connection with a merger agreement (hereinafter referred to as "MERGER
AGREEMENT") concluded on July 12, 1999 with Global Industrial Technologies Inc.,
a company under the laws of the U.S. Federal State of Delaware with its
registered office in Dallas, Texas (hereinafter referred to as "GIT"), Heat on
July 16, 1999 published a so-called tender offer (hereinafter referred to as
"TENDER OFFER") to the shareholders of GIT with which Tender Offer Heat offered
to acquire shares in GIT for a purchase price of US$ 13.00 per share at
conditions set out more precisely in the Tender Offer.
As a result of an extension, the Tender Offer is valid until October 26, 1999.
According to the provisions of the Tender Offer, the shareholders wishing to
accept the offer are obligated to deposit the shares to be sold with the Bank of
New York, New York (hereinafter referred to as the "DEPOSITORY"). After
fulfillment of all conditions contained in the Tender Offer, the Depository must
transfer the acquired shares step by step to Heat in exchange for payment of the
purchase price.
1.2 FINANCING OF SHARE ACQUISITION AND OTHER FINANCING OBJECTIVES
Borrower shall make available a total amount of up to Euro 440 Million
(hereinafter referred to as "BORROWED PART") to the borrowers listed below as a
loan for the following financing objectives:
- to Heat for payment of the purchase price owed under the
Tender Offer; and
- to GIT or its direct or indirect holding companies for the
discharge of the obligations of the respective borrower; and
- to Heat for other expenditures in connection with the
acquisition of GIT shares by Heat by means of the Tender
Offer.
From an increase of at least ATS 1.8 billion in its authorized capital in
accordance with the resolution of its Board of Directors dated September 28,
1999, RHI AG shall make available an amount of at least Euro 130,811,101.00
(hereinafter referred to as "EQUITY SHARE") to Heat by means of the holdings
specified in Section 1.1 above for the purpose of acquisition of GIT shares.
The Borrowed Part shall be provided by means of the credit agreed herein. In
accordance with the agreements made herein, Borrower shall convey the amounts
financed by this credit
<PAGE>
in the form of loans and subject the payment of such loans to the proviso that
the loan amount may not be used for any purposes other than those agreed in this
Credit Agreement.
2. LENDERS, RE-FINANCING
2.1 SEPARATE AGREEMENTS, REPRESENTATION BY RZB AND CA
The credit agreed herein shall be granted by Lenders in the following shares:
RZB Euro 100.0
CA Euro 95.5
ABN Amro Bank NV Euro 66.0
Bank Austria AG Euro 95.5
Bank fur Arbeit und Wirtschaft AG Euro 29.0
Erste Bank der oesterreichischen Sparkassen AG Euro 44.0
Osterreichische Volksbanken AG Euro 10.0
Lenders are not in any joint or joint and several relationship with Borrower.
Hence, none of Lenders shall be liable to Borrower for the performance of the
obligations of the other Lenders under this Agreement. Each of the Lenders shall
be entitled to assert its claims and rights under this Credit Agreement
independently.
Notwithstanding the foregoing paragraph, any arrangements in respect of this
credit shall be completed by RZB and CA on behalf of Lenders. In this respect,
RZB and CA represent Lenders in relation to Borrower, the parties furnishing
securities, and third parties. Except as otherwise provided in Section 3.2
regarding credit disbursement, binding declarations and other correspondence
from Borrower and third parties to Lenders shall have effect against all Lenders
if directed to RZB or CA; binding declarations from Lenders shall be made by RZB
and CA jointly. Credit disbursement for CA, Bank Austria AG, and Bank fur Arbeit
und Wirtschaft AG shall be executed through CA, for the remaining Lenders
through RZB. Payments owed by Borrower to Lenders shall have debt-discharging
effect if made in equal shares to RZB and CA, who shall be concerned with
distributing such payments on a pro-rata basis, fair in terms of foreign
currency, to those Lenders for whom such credit payments had been made. Lenders
shall be entitled to amend the provisions contained in this paragraph by
unilateral act in accordance with the relevant agreements entered into between
Lenders and by notifying Borrower accordingly.
Lenders shall irrevocably be entitled to exchange among each other any available
information concerning Borrower, the credit agreed herein, the securities
existing thereto, and the financed transaction.
2.2 RE-FINANCING
Oesterreichische Kontrollbank Aktiengesellschaft (hereinafter referred to as
"OEKB") will issue bill guaranties [WECHSELBURGSCHAFTSZUSAGEN] (hereinafter
referred to as "BILL GUARANTIES") to each Lender for the credit agreed herein.
On the basis of these Bill Guaranties, Lenders shall conclude re-financing
agreements (hereinafter referred to as "RE-FINANCING AGREEMENTS") with OeKB for
a total of the credit line. Lenders shall assign their claims arising from the
credit agreed herein to OeKB for the purpose of providing security
<PAGE>
for the claims under the re-financing agreements and shall irrevocably be
entitled to provide OeKB with any information available to them pertaining to
this business matter.
2.3 THIRD-PARTY PARTICIPATIONS
With Borrower's consent, Lenders shall be entitled to grant sub-participations
in their respective credit share to other domestic and foreign credit
institutions or to entirely or partially transfer the position of Lender. In the
event of a sub-participation, the legal position as Lender shall in the external
relationship remain attached exclusively to the respective Lender.
In addition, Lenders shall be entitled, with Borrower's consent, to entirely or
partially assign their claims under this credit transaction to third parties.
The consent of Borrower shall not be required for assignments among Lenders or
credit institutions with sub-participations, assignments or sub-participations
after occurrence of any of the grounds for termination determined in Section 9
below, or assignments in connection with the re-financing of Lenders.
Insofar as the consent of Borrower is required in accordance with the foregoing,
Borrower shall only withhold its consent for cause. Should Borrower not reply to
a written inquiry in this regard by Lenders within 10 banking days, Borrower's
consent shall be deemed as given.
In connection with the sub-participations, transfers, and assignments specified
in this Section, Lenders are entitled to pass on all information available to
them concerning Borrower, the credit agreed herein, the securities existing
thereto, and the financed transaction to third parties which are to check on a
sub-particpation or to whose benefit an assignment or transfer is to be
executed.
3. CREDIT AMOUNT, CREDIT PORTIONS AND UTILIZATION
3.1 CREDIT AMOUNT AND CREDIT PORTIONS
Lenders grant to Borrower a credit in the maximum amount of
Euro 440 million
(in words: Euro four hundred and forty million)
which may be utilized once. From such total amount, the shares specified in
Section 2.1 above shall be attributed to the individual Lenders.
20% of each credit amount claimed shall be charged by Lenders to a credit
account A; 80% of each such credit amount to a credit account B. The respective
total liable [AUSHAFTEND] balance in credit accounts A regarding Lenders is
hereinafter referred to as "CREDIT PORTION A", the liable balance in credit
account B regarding Lenders as "CREDIT PORTION B".
3.2 CREDIT UTILIZATION IN GENERAL
The credit may be utilized in full or in partial amounts until March 31, 2000 at
the latest, provided that all agreed payment requirements and - unless later
performance is expressly
<PAGE>
agreed - all representations agreed with Borrower and the parties furnishing
security specified in Section 7 below (in particular RHI AG) have been fulfilled
and all related records and documents have been handed over to Lenders as
agreed.
Utilization is executed by means of written notices of drawing from Borrower,
which must be received by RZB and CA, for equal amounts, 5 banking days prior to
the intended date of utilization.
Regardless of the foregoing agreements, payment of the utilized amount is
executed as soon as Lenders have received the corresponding re-financing funds
out of their Re-Financing Agreements. Should these re-financing funds not be
made available in due time, payment shall be executed upon Borrower's request in
accordance with the re-financing funds which Lenders are able to obtain on the
money market. In this event, the credit shall bear interest at the money market
interest rates charged to Lenders plus a margin of 1.5 percent per year until
arrival of the re-financing funds out of the Re-Financing Agreement
3.3 FIRST UTILIZATION
The first utilization of the credit shall be made in the form of at least a
partial amount of Euro 50 million, whereby the utilized amount shall exclusively
be used for credit transfer to the Depository for the purpose of payment of the
purchase price for the GIT shares in accordance with the Tender Offer. Such
first utilization is subject to the condition that, by means of a corresponding
written confirmation by the transferring bank to RZB and CA, it is evidenced
that the amount to be provided from the Equity Share for the share purchase
price has been transferred to the Depository no later than on the date of the
transfer of the credit funds.
3.4 FURTHER UTILIZATION
Any following utilization shall be made in the form of minimum amounts of Euro
20 million after acquisition of at least 51% of GIT shares by Heat. Such
utilization shall be made exclusively for
- further credit transfers to the Depository for the purpose of
payment of the purchase price of the GIT shares according to
the Tender Offer; or
- payment of cash expenses already incurred, or to be incurred,
by Heat in connection with the acquisition of GIT shares; or
- credit transfers aimed at discharging obligations of GIT or
its direct or indirect holding companies.
Unless a utilization for a payment to the Depository is given, written evidence
of the use of the utilized credit funds within the meaning of the agreements
contained in this Section shall be submitted to Lenders together with the
respective notice of drawing. In particular, in the event of utilization for the
purpose of discharge of the obligations of GIT or its direct or indirect holding
companies, the following shall be evidenced by means of corresponding
contractual documents:
- the creditor and legal basis of the obligation; and
<PAGE>
- the unconditional consent of the creditor to the release of a
security possibly obtained from the company assets of GIT or
its direct or indirect holding companies for the discharged
obligation on receipt of the payment ordered.
The notice of drawing shall indicate the respective payee and the account to
which payment is to be credited.
4. FURTHER PAYMENT REQUIREMENTS
Regardless of the provisions of Section 3 above, payments out of the credit
agreed herein shall only be executed if the following is at Lenders' disposal in
a form satisfactory to Lenders:
4.1 REGARDING RE-FINANCING
a) Bill Guaranties;
b) Re-Financing Agreements.
4.2 REGARDING THE SECURITIES AGREED IN SECTION 7
all agreements concluded in a legally binding form on the securities agreed in
Section 7 of this Credit Agreement, together with written evidence of
fulfillment of all requirements of effective performance of these agreements.
4.3 REGARDING THE ACQUISITION OF GIT SHARES IN GENERAL
copy of the Merger Agreement and a complete executed copy of the Tender Offer,
together with the written confirmation from RHI AG that, apart from the
extension of the Tender Offer until October 26, 1999, the submitted versions
correspond to the versions known to Lenders dated July 16, 1999.
4.4 REGARDING BORROWER
a) Articles of Association of Borrower;
b) evidence of the registration of Borrower in the competent
commercial register in Denmark;
c) evidence of the authorization of the present Credit Agreement
by the responsible bodies of Borrower;
d) evidence of sufficient authorization of the individuals
representing Borrower in the conclusion of the Credit
Agreement and related agreements;
e) confirmation by an attorney-at-law registered in Denmark and
acceptable to Lenders that
- Borrower is duly established and existing under the
laws of Denmark;
- the Credit Agreement is legally binding for Borrower
and is enforceable against Borrower in accordance
with its terms;
- all internal and external authorizations possibly
required for this Credit Agreement and the
transactions thereby financed are available; and
- arbitral awards and/or judgements of the courts
determined in this Credit Agreement are enforced in
Denmark.
<PAGE>
4.5 REGARDING HEAT
a) Articles of Association of Heat;
b) evidence of Heat's registration in the competent commercial
register in Delaware;
c) evidence of the authorization of the pledge agreement on GIT
shares stipulated in Section 7 of the present Credit Agreement
by the responsible bodies of Heat;
d) evidence of sufficient authorization of the individuals
representing Heat in the conclusion of the pledge agreement
specified in c) above and related agreements;
e) confirmation by an attorney-at-law registered in the United
States and acceptable to Lenders that
- Heat is duly established and existing under the laws
applicable to it;
- the Tender Offer meets all requirements of the applicable laws
and that, in accordance with the Tender Offer, Heat acquires
title to the GIT shares delivered to the Depository on the
basis of the Tender Offer;
- the pledge agreement specified in c) above is legally binding
for Heat and that, on the basis of this agreement, Lenders
acquire liens on the shares delivered to the Depository as
soon as title to such shares passes to Heat;
- all internal and external authorizations possibly required for
the security agreement specified in c) are available; and
- arbitral awards and/or judgements of the courts agreed in this
Credit Agreement and in the pledge agreement specified in c)
are enforced in the United States against the assets of Heat.
4.6 REGARDING GIT
a) Articles of Association of GIT;
b) evidence of the registration of GIT in the competent
commercial register in Delaware;
c) audited financial statements of GIT as at December 31, 1998.
5. INTEREST, COSTS
5.1 INTEREST
5.1.1 Credit Portion A
Credit Portion A shall bear interest at the variable procedural interest rate of
OeKB which is applicable to the respective calendar quarter and published in the
Official Journal of the newspaper WIENER ZEITUNG plus a margin of 0.75% per
year.
5.1.2 Credit Portion B
Credit Portion B shall bear interest fixed at the basic interest rate applicable
for credit terms of 5 to 8 years and published by OeKB with validity for the
third calendar quarter of 1999 plus a margin of 0.75% per year.
<PAGE>
5.1.3 Default Interest
Whenever Borrower is behind schedule with a payment owed under this Credit
Agreement, the overdue amounts shall be subject to an interest rate exceeding
the maximum interest rate agreed in Sections 5.1.1 and 5.1.2 above by 1 (one)
percent. A claim by Lenders to reimbursement of any greater damage, for example
arising from the re-financing of overdue interest payments on the money market,
shall is reserved.
5.2 CHARGING OF INTEREST
Interest is charged for each calendar quarter in arrears on the last day of the
respective calendar quarter on a current account basis of 365/360, whereby
interest accrues as of the value date of payment until the date on which the
respective receipt is credited. Default interest is calculated in the same way,
but shall be due immediately on accrual. In a timely fashion prior to the due
date, Borrower shall receive from Lenders a direction on the default interest
respectively due.
5.3 INCREASED COSTS
Lenders shall be entitled to increase the agreed interest rate if and insofar as
the costs incurred by Lenders in connection with this granting of credit
increase as a result of an amendment to a law or any other statutory provision,
administrative practice, or court rulings (in this instance, taxes on income,
earnings, and property, or charges similar to such taxes shall not be taken into
account). Lenders shall furnish a respective basis of calculation evidencing the
scope of the necessary change in interest rate.
5.4 COSTS OF BILL GUARANTIES, OTHER COSTS
The costs of the Bill Guaranties (handling fee and bill guaranty charge) shall
be borne by Borrower. The respective amounts shall be charged by OeKB to
Borrower's account with CA by means of direct debit order.
All fees, taxes, and other charges which have arisen or will arise in connection
with this Credit Agreement or its performance, or the securities relating
thereto, shall be borne by Borrower. Borrower shall immediately reimburse
Lenders for such expenses against rendering of accounts. The same shall apply to
any expenditures incurred by Lenders in connection with the preparation and
performance of the security agreements determined herein as well as the
enforcement of Lenders' claims against Borrower and the parties furnishing
securities, including any costs incurred in connection with external counsels.
6. REPAYMENT
6.1 SCHEDULED REPAYMENT
Credit Portions A and B shall be repaid as follows:
Credit Portion A:
<PAGE>
Euro 44 million on September 30, 2000
Euro 44 million on September 30, 2001
Credit Portion B:
Euro 42 million on September 30, 2002
Euro 42 million on September 30, 2003
Euro 42 million on September 30, 2004
Euro 42 million on September 30, 2005
Euro 42 million on September 30, 2006
Euro 142 million on September 30, 2007
In the event that the credit is not entirely utilized, the installments
determined above shall be reduced by the differential amount of the actual
utilization and the credit line.
Any amounts owed by Borrower under this Credit Agreement, which have not been
paid by September 30, 2007, shall become due for payment on this day,
irrespective of any different agreements contained herein.
6.2 REPAYMENT PRIOR TO THE DUE DATE
Borrower shall be entitled to repay the respective liable [AUSHAFTEND] credit
amount pursuant to this Section 6.2 in its entirety prior to the due date,
provided that Borrower terminates the Credit Agreement upon three months' notice
to the end of a calendar month.
In the event of sales in connection with the shares or assets of GIT acquired by
Heat resulting in a reduction of the book value of the interest in GIT relevant
for RHI AG's consolidated financial statements, Borrower shall be obligated to
repay the amount corresponding to the reduction of such book value prior to the
due date.
In the event of repayment prior to the due date, Borrower shall be obligated to
immediately indemnify Lenders for any losses and expenses incurred as a result
of the cancellation of the refinancing agreements prior to the due date after
corresponding rendering of account. This shall in particular apply to all
payments Lenders are obligated to make to OeKB in connection with the
cancellation of refinancing prior to the due date. This obligation of Borrower
shall also apply if repayment prior to the due date is made on the grounds of
termination by Lenders in accordance with Section 10 of this Credit Agreement.
7. SECURITIES
For all current and future claims of Lenders in connection with this Credit
Agreement, the following securities are agreed upon:
a) pledge of all shares in Heat held by Narco in the form of a pledge
agreement substantially corresponding to the text attached hereto as
Annex 1;
<PAGE>
b) (i) pledge of all GIT shares acquired by Heat in connection with
the Tender Offer in the form of a pledge agreement
substantially corresponding to the text attached hereto as
Annex 2; as well as
(ii) conclusion of a control agreement between Heat, the
Depository, and Lenders substantially corresponding to the
text of the agreement attached hereto as Annex 3, which shall
ensure that the Depository
- uses all amounts credited to it exclusively for the
purpose of paying the purchase price of the Tender
Offer; and
- holds in pledge for Lenders the share title to which
passes to Heat by reason of the Depository effecting
payment to the sellers of the GIT shares from the
credited amount; and
- retransfers to Lenders the amount still held by the
Depository from such transfer as at January 15, 2000.
c) guaranty by RHI AG as well as Veitsch-Radex GmbH, Heraklith AG, and
Narco for all obligations of Borrower under this Credit Agreement as
well as eight acceptances in blank accepted by RHI including
corresponding declarations of purpose [WIDMUNGSERKLARUNG], each in the
form attached hereto as Annexes 4 and 5;
d) acceptances of bills by Borrower for all repayment installments agreed
upon in this Section 6.1. Each Lender shall issue separate bills for
its share in any such installments, falling due on the due date of such
installment, which shall be accepted by Borrower. Such bills, bearing a
bill guaranty by the Republic of Austria, shall be transferred by
Lenders to OeKB with pledge endorsement for the purpose of providing
security for refinancing. In addition, Borrower shall provide Lenders
with eight acceptances in blank including corresponding declarations of
purpose [WIDMUNGSERKLARUNG], which Lenders may complete upon maturity
of their claims against Borrower and use for the purpose of enforcing
their claims in accordance with the intended use.
8. OBLIGATION TO REPORT
8.1 GENERAL INFORMATION AND INSPECTION RIGHTS
Upon request, Borrower shall at any time furnish information to Lenders and OeKB
regarding its legal, economic, and financial situation and shall on its own
initiative immediately notify Lenders in writing of any important events beyond
the ordinary course of business. This shall in particular apply to material
losses incurred by Borrower in connection with its accounts receivable, any
material damage, official requirements, investment projects, material changes in
the corporate structure, etc.
Upon request, Borrower shall immediately furnish evidence to Lenders and OeKB
regarding the use of the credit funds in accordance with the intended purpose
and permit inspection of all documents pertaining to this business matter.
Borrower shall permit Lenders at any time to inspect its corporate books,
records, and any other business documents.
<PAGE>
8.2 EVIDENCE RELATING TO ACCOUNTING
Borrower shall provide Lenders with its audited financial statements on an
annual basis no later than 6 (six) months after the close of the respective
fiscal year.
9. TERMINATION
Given good cause, Lenders shall be entitled to terminate this credit at any time
with immediate effect and accelerate maturity of the entire debt or parts
thereof. Such good cause shall be deemed given
a) if Borrower fails to meet any of its payment obligations
hereunder when due; or
b) if Borrower fails to meet any of its other obligations
hereunder or any obligation of a party furnishing security in
accordance with the security agreements pursuant to Section 7
hereof (in particular the Guaranty Agreement concluded with
RHI AG) despite a request for performance and granting of an
additional period of 2 weeks for this purpose;
c) in the event of a breach, or partial breach, or inaccuracy of
a representation made in this Credit Agreement or any of the
security agreements pursuant to Section 7 hereof (in
particular Section 5 the Guaranty Agreement concluded with RHI
AG) not being remedied despite a corresponding request and
granting of an additional period of 2 weeks for this purpose;
d) in the event of material worsening in RHI AG's credit
solvency, i.e. in the event of non-fulfillment of at least one
of the representations pursuant to Section 5.2 of the Guaranty
Agreement with RHI AG; or
e) in the event that either Borrower, Narco, Heat, GIT, any of
its direct or indirect holding companies, or RHI AG or any
other company belonging to the RHI AG Group is in default with
payment of an amount exceeding Euro 10 million owed to a third
party creditor and such default is not remedied within a
period of 30 days after corresponding warning by Lenders to
RHI and is not exclusively a result of the fact that the
debtor concerned denied the existence of such payment
obligation in good faith;
f) in the event that the securities furnished or offered
sustainably and materially depreciate in value or if such
depreciation is threatened and Borrower does not meet its
obligation to furnish additional valuable securities after a
request by Lenders and granting of an additional period of 2
weeks.
10. OTHER PROVISIONS
10.1 BANKING DAYS
In the event that a date determined herein falls on a day which is not a banking
day in Austria, such date shall be replaced by the next banking day. A banking
day shall be deemed any day on which banks in Vienna are generally open for
customers.
<PAGE>
10.2 PAYMENTS BY BORROWER
Any payments by Borrower shall be made by credit transfer to the respective
account last determined by RZB and CA with the value date corresponding to the
due date of the liability discharged by such payment.
In connection with Lenders' claims asserted against Borrower in accordance with
this Credit Agreement, Borrower waives the current or future enforcement of any
liens, rights of retention, or any other rights, in particular any right of
setoff. The payments made by Borrower under this Credit Agreement shall be made
without any deductions and all taxes and charges possibly imposed on such
payments shall be borne by Borrower. In the event that Borrower is under a legal
obligation to make deductions on its payments, Borrower shall increase the
amount due in such a way that Lenders receive the amount owed to them under the
terms of this Agreement without any reduction.
In the event that a payment by Borrower is not sufficient to meet all Lenders'
claims due, such payment shall be set off according to the order specified below
whereby, within the individual items, such setoff shall be based on the due
date, commencing with the latest due date:
- claims to reimbursement of costs, expenses, and cash
expenditures of any kind;
- default interest;
- interest overdue;
- capital overdue;
- interest due at the time of receipt of payment;
- capital due at the time of receipt of payment.
Lenders shall be entitled to unilaterally deviate from such order if this
appears justified in order to safeguard their interests.
10.3 GENERAL TERMS AND CONDITIONS
In addition to the terms of this Credit Agreement, the General Terms and
Conditions of the Austrian credit institutions in their current version shall
apply. Supplementing Section 7 of such General Terms and Conditions, Lenders
shall be entitled to setoff if the debts, whether due or not, are in different
currencies or are subject to different giro agreements.
10.4 PLACE OF PERFORMANCE
The place of any performance by the Parties shall be Lenders' business premises
at the addresses specified above.
10.5 DATA PROCESSING AND DISCLOSURE
For purposes of editing this Credit Agreement, Lenders shall be entitled to
collect, identify, process, store, use, transfer, or delete data by means of
Lenders' own automatic data processing systems, or those of third parties.
Borrower agrees that any data concerning Borrower and made available to Lenders
within the framework of this business relationship are processed in accordance
with bank practices, in particular by means of data processing
<PAGE>
systems, and disclosed within the organization of the respective Lender as well
as - insofar as Lenders are under a respective legal obligation - to monetary
authorities and/or public bodies, in particular in the interest of creditor
protection.
10.6 NO ASSIGNMENT OF BORROWER'S RIGHTS
Borrower shall not be entitled to assign its rights under this Credit Agreement
to any third parties or otherwise dispose of such rights.
10.7 AMENDMENTS HERETO, INVALIDITY OF INDIVIDUAL PROVISIONS
Any supplements and amendments hereto shall be in writing; the same shall apply
to any agreement that the written form requirement may be waived.
Any amendments hereto require the consent of all Parties. However, the following
deviations from the Credit Agreement shall, exceptionally, be binding for all
Lenders if the share of the Lenders having given their consent attains at least
66% of the liable [AUSHAFTEND] amount of borrowed capital:
- minor deviations from the agreed time limits or due dates
(except for any agreed payment requirements), provided that
such deviation does not comprise periods of more than 4 weeks;
as well as
- deviations from the representations given by RHI AG in Section
5.2 of the Guaranty Agreement, provided that such deviations
do not exceed XXX% of the respectively agreed scope.
Should any provisions hereof be or become legally unenforceable or invalid, this
shall not affect the validity of the remaining provisions. Such legally
unenforceable or invalid provision shall be deemed replaced by an enforceable
and valid provision coming as close as possible to the economic content of the
unenforceable or invalid provision.
10.8 ADDRESSES OF THE PARTIES
Any correspondence between the Parties shall be directed to the following
addresses:
IF TO BORROWER:
RHI Finance ApS
Strandvejen 44, 2900 Hellerup
Attention: Mr. Beest
IF TO LENDERS:
Raiffeisen Zentralbank Osterreich AG
Am Stadtpark 9, 1030 Vienna
Abteilung Exportfinanzierung
Telephone: ++43 1 71707 1159
Telefax: ++43 1 71707 1714
<PAGE>
Creditanstalt AG
Schottengasse 6-8, 1010 Vienna
Abteilung Export- und Aulandsbeteiligungsfinanzierung
Telephone: ++43 1 53131 44407
Telefax: ++43 1 53131 44490
11. APPLICABLE LAW; ARBITRATION
11.1 APPLICABLE LAW
This Credit Agreement shall be governed by the laws of the Republic of Austria.
11.2 ARBITRATION AND ORDINARY COURTS
Any disputes arising in connection with this Agreement or relating to any
breach, annulment, or invalidity of this Agreement, shall be finally settled
under the Rules of Arbitration of the International Arbitral Tribunal of the
Austrian Chamber of Commerce [INTERNATIONALES SCHIEDSGERICHT DER
WIRTSCHAFTSKAMMER OSTERREICH] in Vienna (Vienna rules) by three arbitrators
appointed in accordance with the said Rules. The language of the arbitration
proceedings shall be German. The Parties shall, however, be entitled to have
recourse to the ordinary courts having jurisdiction in the First Community
District [ERSTER GEMEINDEBEZIRK] of Vienna, or any other competent ordinary
court, instead of the agreed arbitral tribunal.
ANNEXES
1. Pledge Agreement regarding the Heat shares
2. Pledge Agreement regarding the GIT shares
3. Control Agreement regarding the GIT shares
4. Guaranty by RHI AG
5. Guaranty by Veitsch Radex GmbH, Heraklith AG, Narco
Malmo (Sweden), October 13, 1999
RHI Finance ApS
[signature]
Raiffeisen Zentralbank Osterreich AG Creditanstalt AG
[signatures] [signature]
ABN Amro Bank NV Bank Austria AG
Filiale Wien [signature]
[signature]
Bank fur Arbeit und Wirtschaft AG Erste Bank der oesterreichischen
[signature] Sparkassen AG
[signature]
Osterreichische Volksbanken AG
[signatures]
<PAGE>
FREE ENGLISH TRANSLATION FOR
CONVENIENCE PURPOSES ONLY
[UNOFFICIAL TRANSLATION - FOR WORKING PURPOSES ONLY]
GUARANTY AGREEMENT
between
RHI AG
Mommsengasse 35
1040 Vienna
(hereinafter referred to as "GUARANTOR")
and
RAIFFEISEN ZENTRALBANK OSTERREICH AKTIENGESELLSCHAFT
Am Stadtpark 9, 1030 Vienna
(hereinafter referred to as "RZB")
CREDITANSTALT AG
Schottengasse 6-8, 1010 Vienna
(hereinafter referred to as "CA")
ABN AMRO BANK N.V., FILIALE WIEN
Schottenring 35, 1010 Vienna
BANK AUSTRIA AKTIENGESELLSCHAFT
Vordere Zollamtsstra(beta)e 13, 1030 ViENNA
BANK FUR ARBEIT UND WIRTSCHAFT AG
Seitzergasse 2-4, 1010 Vienna
ERSTE BANK DER OESTERREICHISCHEN SPARKASSEN AG
Graben 21, 1010 Vienna
OSTERREICHISCHE VOLKSBANKEN AG
Peregringasse 3, 1090 Vienna
as lenders
(hereinafter collectively referred to as "LENDERS")
<PAGE>
BASIS OF THE AGREEMENT
On October 13, 1999, Lenders concluded a Credit Agreement (hereinafter referred
to as "CREDIT AGREEMENT") with RHI Finance ApS, Strandvejen 44, 2900 Hellerup
(hereinafter referred to as "BORROWER"), granting Borrower a credit in the
maximum total amount of Euro 440 million for the purpose of financing the
indirect purchase of shares in Global Industrial Technologies Inc. (hereinafter
referred to as "GIT") by Heat Acquisition Corp. (hereinafter referred to as
"Heat"), a wholly-owned subsidiary company of North American Refractories Corp.
(hereinafter referred to as "NARCO") by means of a public offer (hereinafter
referred to as "TENDER Offer"). The contents of such Credit Agreement are known
to the Guarantor. In connection with the Credit Agreement, Bill Guaranties
[WECHSELBURGSCHAFTSZUSAGEN] for the Republic of Austria by Oesterreichische
Kontrollbank AG (hereinafter referred to as "OEKB") as well as Refinancing
Agreements with OeKB are available.
In order to provide security for all claims of Lenders against Borrower under
the Credit Agreement, Lenders shall be supplied with a guaranty by Guarantor.
Therefore, Guarantor and Lenders conclude the following Guaranty Agreement.
2.) SEPARATE AGREEMENTS, REPRESENTATION BY RZB, SUB-PARTICIPATIONS
Lenders are not in a joint and several relationship with Guarantor. Hence,
Guarantor shall be liable to each Lender for each respective claim of such
Lender against Borrower under the Credit Agreement.
Vis-a-vis Guarantor, Lenders are represented by RZB and CA. Binding declarations
and other correspondence from Guarantor to Lenders shall have effect against all
Lenders if directed to RZB or CA, binding declarations of Lenders shall be made
by RZB and CA jointly. Payments owed by Guarantor to Lenders shall have
debt-discharging effect if made in equal shares to RZB and CA, who shall be
concerned with distributing such payments on a pro-rata basis, fair in terms of
foreign currency, to those Lenders for whom the credit disbursement had been
made. Lenders shall be entitled to amend the provisions contained in this
paragraph by unilateral act in accordance with the relevant agreements entered
into between Lenders and by notifying Borrower accordingly.
In accordance with the conditions set forth in the Credit Agreement, Lenders
shall be entitled to entirely or partially transfer the position of Lender to
third parties also with effect against Guarantor, or to entirely or partially
assign their claims under this Credit Agreement to third parties. In this
instance, Lenders shall be entitled to pass on to third parties all available
information pertaining to Guarantor, this Guaranty Agreement, the securities
existing thereto, and the financed transaction.
2
<PAGE>
3.) GUARANTY AND UTILIZATION
Vis-a-vis Lenders, Guarantor herewith takes on the guaranty for the fulfillment
of all obligations of Borrower under the Credit Agreement in accordance with the
terms of such Agreement. Hence, Guarantor irrevocably undertakes to pay to
Lenders upon first written request, which request may be made several times,
waiving any defense or objection and without examining the legal relationship
existing between Lenders and Borrower, any amounts with regard to which Lenders
confirm in their request for payment that it would have been payable by Borrower
under the terms of the Credit Agreement and which was not paid by the due date.
This guaranty refers to all related obligations of Borrower regarding payment of
capital, interest, reimbursement of expenses (also for procedural and
out-of-court legal expenses), reimbursement of taxes and fiscal charges, and all
other supplementary charges. In addition, Guarantor undertakes to reimburse
Lenders for their own expenses incurred in connection with the bringing of an
action against Borrower or which arise from the realization of other securities,
even in the event that Lenders, despite being the prevailing party in such
action, have not been adjudicated a claim for reimbursement of costs and
expenses against Borrower or the parties furnishing securities respectively.
Payments of Guarantor shall be effected by bank transfer to the respective bank
account as named in each utilization with the value date corresponding to the
due date of Borrower's respective liability.
Lenders shall be entitled to reject payments offered by Borrower in connection
with the Credit Agreement and to claim on Guarantor in the event that Lenders
fear that the payment offered to them by Borrower is contestable for any reason
whatsoever, in particular with regard to a possible insolvency of Borrower.
Guarantor may even be claimed on if payments by Borrower, which have already
been effected, are contested or if proceeds from the realization of other
securities as a result of the contestation of such securities or their
realization with regard to Lenders are reclaimed.
4.) INDEPENDENT AGREEMENT
Guarantor's guaranty obligations shall be independent of the legally effective
conclusion of the Credit Agreement. Hence, Lenders shall be entitled to claim on
Guarantor also for sums which not owed, or not entirely owed, by Borrower as a
result of the lack of a legally effective conclusion of the Credit Agreement.
Lenders shall be entitled to grant Borrower respite for payment or prolongation
of the credit at any time without requiring Guarantor's consent. Guarantor shall
have no claims whatsoever against Lenders in connection with legal claims for
damages or any other legal titles in the event that they are in default with the
enforcement of claims against Borrower or fail to assert their claims against
Borrower in possible insolvency proceedings against Borrower. Lenders
3
<PAGE>
shall in particular be entitled to reach a settlement with Borrower regarding
the redemption of their claims without discharging Guarantor from its liability
(Section 1378 of the Austrian Civil Code).
Guarantor's obligations shall be independent and shall not depend on any other
securities provided for the guaranteed claims, in particular any other rights of
lien or other security rights which may have been provided to Lenders by
Borrower or third parties. Guarantor shall not be entitled to claim realization
of such securities, or realization for a specific purpose, by Lenders prior to
utilization of the present guaranty. Lenders shall be entitled to realize any of
their other securities and to set off the proceeds from such securities or
payments by Borrower or other obligated parties with any claim they deem
suitable. The release of any other securities of any kind, which will, or have
been, provided to Lenders in connection with their claims against Borrower,
shall not be deemed to involve any modification to the guaranty taken on
herewith or any claims for damages on the part of Guarantor.
The payments of Guarantor under this guaranty shall not have the effect of an
assignment of Lenders' claims against Borrower as long as all claims of Lenders
against Borrower, on the grounds on any legal title whatsoever, are not entirely
and uncontestably satisfied. In this instance, Section 1358 of the Austrian
Civil Code shall not apply. Lenders shall be entitled to treat payments of
Guarantor in connection with their claims under the Credit Agreement as
provision of security for such claims. In such an event, Lenders shall have a
right of lien regarding the sums paid by Guarantor providing security for the
claims in connection with the Credit Agreement and Lenders shall have the right
to satisfy their claims at any time.
5.) REPRESENTATIONS AND OTHER OBLIGATIONS OF GUARANTOR
5.1) GENERAL REPRESENTATIONS
Guarantor makes to Lenders the following representations, and warrants, within
the meaning of Section 880a of the Austrian Civil Code, compliance with such
representations by Guarantor and its respective holding companies (such term
including Heat, GIT, and their subsidiaries) listed below for the entire period
until complete satisfaction of all claims by Lenders under the Credit Agreement:
a) Guarantor's indirect participation in GIT (also regarding the
intermediate steps mediating such this participation) will not be
changed without Lenders' consent. The same shall apply to dispositions
regarding the participation of GIT in its direct or indirect holding
companies as well as to all dispositions regarding assets of Guarantor,
Narco, Heat, and GIT outside the ordinary course of business insofar as
such dispositions would sustainably and materially reduce the value of
the securities determined in the Credit Agreement, or insofar as such
value reduction would be threatened.
4
<PAGE>
b) Without Lenders' prior consent, Guarantor and its direct and indirect
holding companies will not grant to any third parties any rights of
lien or any other security regarding their current or future assets, or
parts thereof, or allow the creation of such a right, or enter into any
agreement with similar economic effect .
c) Borrower has not assumed any obligations vis-a-vis other creditors
which have not been disclosed to Lenders and Borrower will not assume
any obligations in the future which have priority over Borrower's
obligations under the Credit Agreement or with regard to which better
securities have been provided than with regard to the present guaranty
obligations.
d) Guarantor has not assumed any obligations vis-a-vis any other creditors
which have not been disclosed to Lenders in the schedule "existing
burdens of the RHI Group" handed over to Lenders, which also includes
all existing credit securities provided, and, in addition, will not
assume such obligations in the future which have priority over
Guarantor's obligations under the Credit Agreement or with regard to
which better securities have been provided than with regard to the
present guaranty obligations.
e) Irrespective of the remaining representations made herein, Guarantor
shall be obligated to grant securities for credits utilized now or in
the future by itself or by any of his direct or indirect holding
companies only if Guarantor also offers the respective security to
Lenders equally on a pro rata basis for the purpose of furnishing
security in connection with their claims under the Credit Agreement
and, in the event of their acceptance of such offer, to furnish such
securities in a legally effective manner.
f) Guarantor and all of its direct and indirect holding companies have
available at any time all official authorizations of any kind required
for the operation of their businesses and comply with all applicable
legal requirements.
g) Guarantor and its direct or indirect holding companies have taken all
precautions to ensure that the data processing systems employed in
their companies will accomplish the transition to the year 2000 without
grave shortfalls and that such systems will be able to identify this
year as a leap year.
h) Narco, GIT, and all of their direct and indirect holding companies have
taken sufficient precautions for any possible claims in connection with
actual or alleged health damage caused by the utilization of asbestos
or other health threatening substances in the products of these
companies by means of having corresponding insurance coverage and will
maintain such insurance cover.
i) From today's point of view, all necessary precautions have been taken
to prevent the future accrual of claims as set forth in h) below
against Narco, GIT, and all of their direct and indirect holding
companies.
5
<PAGE>
j) The Credit Agreement and, as soon as they have been concluded, all
security agreements set forth in Section 7 are legally binding for
Lenders' respective contractual parties and are at any time enforceable
against such parties in accordance with the conditions agreed upon.
k) All measures required for the admissibility and binding effect of the
acquisition of the GIT shares by Heat by means of Tender Offer have
been taken.
l) The conditions of the Merger Agreement as well as the Tender Offer,
each in the version dated July 16, 1999, will not be modified or
cancelled without Lenders' consent.
m) All internal and external authorizations on the part of Guarantor which
are required for the assumption of the guaranty agreed herein, are
available.
n) Guarantor has accurately and completely disclosed its financial
situation to Lenders prior to the conclusion of the Credit Agreement.
o) In a fiscal year, for the first time in the fiscal year of 1999/2000,
distribution of profits and other allowances to the shareholders of
Guarantor (including interest payments and redemption payments for
possible shareholder loans) will not be effected if and as long as the
representations set forth in Section 5.2 below are not entirely
fulfilled.
p) Should GIT or any of its important direct or indirect holding companies
merge with Narco, Guarantor warrants that Lenders will immediately be
provided with a right of lien regarding all shares of the absorbing
company or the company resulting from the merger for the purpose if
furnishing security for Lenders claims. The contents of the pledge
agreement shall correspond to the pledge agreement regarding shares of
Heat provided for in the Credit Agreement.
q) Prior to the first utilization of the credit, Guarantor will prove to
Lenders that the capital increase in the minimum amount of ATS 1.8
billion was filed for registration with the court responsible for
matters pertaining to company accounts [FIRMENBUCHGERICHT].
r) Guarantor undertakes to make available to Heat the minimum amount of
ATS 1.8 billion from the capital increase by means of the
participations determined in Section 1.1 above for the purpose of
acquiring the GIT shares.
s) Guarantor warrants that neither it nor any of its direct or indirect
holding companies will be in default with payment of an amount exceeding
Euro 10 million owed to a third party creditor, unless such default
exclusively results from the fact that the debtor concerned denied the
existence of such payment obligation in good faith. Guarantor shall
inform Lenders of any such default immediately after having obtained
respective
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knowledge. Guarantor warrants that such default is remedied within 30
days after corresponding request of Lenders to Guarantor.
5.2) REPRESENTATIONS REGARDING THE ECONOMIC CIRCUMSTANCES AND DEVELOPMENT OF
GUARANTOR:
5.2.1 Bases and Definitions
The following agreements refer to Guarantor's consolidated annual financial
statements and all of his holding companies obligated to consolidate according
to ss.228 (3) HGB (Commercial Code) (hereinafter called "ANNUAL FINANCIAL
STATEMENTS"), whereby the accounting principles of the HGB are taken as a basis.
Guarantor intends to convert his accounting to the International Accounting
Standard IAS in the future. Prior to this conversion, Guarantor shall be
obligated to establish agreement regarding new comparative figures corresponding
to the new accounting principles.
The representations mentioned below are based on the following definitions,
whereby the respective positions to be itemized in the Annual Financial
Statements are referred to:
GROSS FINANCIAL OBLIGATIONS: the sum of the obligations resulting from loans,
loans against Borrower's note, and obligations to financial institutions
EBIT: operating profit or loss/operating results
EBITDA: EBIT plus depreciation
LIQUID ASSETS: the liquid assets, whereby a maximum of EUR 90.875 million is
made allowance for
NET INTEREST EXPENDITURE: the balance between the interest expenditure sum and
similar expenses on the one hand, and the sum of other interest income and
similar income on the other hand, whereby the proceeds from stocks are not taken
into account in the latter position
5.2.2 Representations:
Guarantor declares the following representations towards Lenders and warrants
their compliance pursuant to Section 880 of the Austrian Civil Code for the
entire time until complete repayment of all Lenders' claims arising from the
Credit Agreement, whereby the warranted figures unless agreed upon differently
in the following - must have been primarily achieved by September 30, 2000 and
from then on by December 31 and June 30 of each year respectively:
a) The balance between the gross financial obligations minus 80% of the
liquid assets must be less than 3.5-times the EBITDA in the years 2000
and 2001, less than three times the EBITDA in the years 2002 and 2003,
and less than 2.5 times the EBITDA from the year 2004
b) The EBIT must be larger than 2.5-times the net interest expenditure.
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c) The quota of equity capital in the sum of liabilities in the Annual
Financial Statements must at least achieve the following figures:
o without deduction of the company value: 12.5% in the year 1999
and 15% in the year 2000, after that this quota must rise by a
minimum of 2 percent each year;
o after deduction of the company value: 10% in the year 2000,
after that this quota must increase by a minimum of 2 percent
each year.
d) As long as the quota of equity capital in the sum of liabilities in the
Annual Financial Statements does not surpass 20%, Guarantor and his
direct and indirect holding companies shall, as of the year 2000, use
at least 30% of the operative cash flow earned by them (as defined in
the business report of RHI AG for the year 1998) to discharge
obligations to the bank.
6.) OBLIGATIONS TO REPORT
6.1) GENERAL INFORMATION AND INSPECTION RIGHTS
Upon request, Guarantor shall at any time disclose information to Lenders and
OeKB regarding its legal, economic, and financial circumstances and shall also
notify Lenders immediately of any important events beyond the ordinary course of
business on its own initiative in writing. This shall also apply, in particular,
to changes in the status of ownership rights, to large shortfalls which
Guarantor has sustained for its own claims in particular, material damage, and
official requirements.
Upon request, Guarantor shall immediately permit Lenders and OeKB inspection of
all documents regarding the Credit Agreement and the business matter financed
with it. Guarantor shall at any time permit Lenders inspection of the books,
records, and other business documents of its company, and shall ensure that this
inspection is also granted by Narco, Heat, GIT, and their direct or indirect
holding companies.
6.2) SUPPORTING ACCOUNTING DOCUMENTS
Guarantor shall provide Lenders with the following documents and information,
whereby - unless otherwise agreed upon in the following - the handing over shall
be effected no later than eleven weeks following the respectively stated date:
a) annually audited Annual Financial Statements of Guarantor no later than
6 (six) months following the close of the respective fiscal year;
b) consolidated reports on the development and status of the figures
agreed in the representations on the economic situation and development
of Guarantor quarterly by the end of each calendar quarter, beginning
with September 30, 1999;
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c) detailed calculations and evidence of compliance with the economic
representations as given, primarily by September 30, 2000 and
thereafter as of December 31, 2000 inclusive half-yearly by June 30 and
December 31 of each year;
d) half-yearly interim reports by March 31 and September 30 of each year
respectively regarding the current property and earning situation of
RHI AG.
7.) SECURITY FOR GUARANTY OBLIGATIONS
Guarantor hands over to Borrowers two blank drafts honored by Guarantor complete
with related declaration of purpose [WIDMUNGSERKLARUNG] as one. Lenders shall be
entitled to complete these drafts on maturity of their claims against Guarantor
in a manner which appears proper to them, and to use said drafts for the purpose
of asserting their claims against Guarantor. Guarantor shall convey to OeKB a
further blank draft accepted by Guarantor together with declaration of purpose
claimed by OeKB.
8.) GENERAL TERMS AND CONDITIONS
In addition to the agreements made herein, the General Terms and Conditions of
the Austrian credit institutions in their current version shall be applicable.
9.) APPLICABLE LAW, ARBITRATION
This Guaranty Agreement shall exclusively be governed by the laws of the
Republic of Austria .
Any disputes arising in connection with this Guaranty Agreement shall be settled
under the Rules of Arbitration of the Permanent Court of Arbitration of the
Austrian Chamber of Commerce [STANDIGES SCHIEDSGERICHT DER WIRTSCHAFTSKAMMER
WIEN] by an arbitration tribunal consisting of three arbitrators. Each Party is
also entitled to file an action at the court having jurisdiction for the First
Community District [ERSTER GEMEINDEBEZIRK] of Vienna, as well as at any other
court of law. In particular, Guarantor submits to the jurisdiction of all courts
at which Lenders admissibly file an action or any kind of application serving to
secure their claims against Borrower.
Vienna, dated October 14, 1999
RHI AG
[signature]
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[signature]
Raiffeisen Zentralbank Osterreich AG Creditanstalt AG
ABN Amro Bank NV Bank Austria AG
Filiale Wien
Bank fur Arbeit und Wirtschaft AG Die Erste Bank der
oesterreichischen
Sparkassen AG
Osterreichische Volksbanken AG
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