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
August 5, 1996 (July 19, 1996)
Date of Report (Date of earliest event reported)
DT INDUSTRIES, INC.
(Exact name of registrant as specified in charter)
Delaware
(State or other jurisdiction of incorporation)
0-23400 44-0537828
(Commission File Number) (I.R.S. Employer Identification No.)
1949 East Sunshine, Suite 2-300, Springfield, MO 65804
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(Address of principal executive offices)
(Zip Code)
(417) 890-0102
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(registrant's telephone number, including area code)
441 West Elm St., Lebanon, MO 65536
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(Former name, former address and former fiscal year,
if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On July 19, 1996, DT Industries, Inc. (the "Company"), acquired the issued
and outstanding stock of Mid-West Automation Enterprises, Inc. ("Mid-West")
through a subsidiary merger transaction. Prior to the acquisition, the stock
of Mid-West was held by RGA Associates, an Illinois limited partnership and
Robert Eitzinger Trust No. 1. Both of these entities are beneficially owned
by Robert Eitzinger and his immediate family. Robert Eitzinger will remain
as president of Mid-West. By virtue of the acquisition, the Company has
acquired control of Mid-West, the underlying assets of which consist of cash
and investments, machinery and equipment, accounts receivable, inventory and
general intangibles. Mid-West is a Chicago-area designer and manufacturer of
integrated precision assembly systems. The Company intends to continue
operating Mid-West in the markets served and, accordingly, intends to
continue to use its assets in the same manner they were used prior to the
acquisition.
The purchase price paid by the Company was approximately $77 million, net of
cash acquired, all of which was obtained by the Company pursuant to an
amendment to the Company's Amended and Restated Term and Revolving Loan
Agreement with Boatmen's National Bank of St. Louis and Dresdner Bank AG as
Co-Agents. The purchase price was determined by negotiation between the
Company and the former stockholders of Mid-West. The acquisition will be
accounted for under the purchase method of accounting with the excess
purchase price over the estimated fair value of net assets acquired recorded
as goodwill.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Mid-West for the fiscal years ended May 29,
1996, May 28, 1995 and May 29, 1994*.
(b) Pro forma financial information for the Company for the fiscal year
ended June 30, 1996*.
(c) Agreement and Plan of Merger by and among Automation Acquisition
Corporation, DT Industries, Inc., Mid-West Automation Enterprises, Inc.
and the Stockholders.
(d) Indemnification and Escrow Agreement.
(e) Second Amended and Restated Credit Facilities Agreement.
(f) Press Release of the Company dated July 22, 1996.
* It is impractical for the Company, at the time of this filing, to
provide financial statements for Mid-West or pro forma financial information
for the Company relative to the acquisition of Mid-West. Pursuant to the
instructions for Item 7 of Form 8-K, the Company will furnish such required
financial statements and pro forma financial information as soon as
practicable.
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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.
DT INDUSTRIES, INC.
Date: August 5, 1996 by /s/ Bruce P. Erdel
----------------------------------------
Bruce P. Erdel
Vice President - Finance and Secretary
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EXHIBIT INDEX
Exhibit No. Description
2.1 Agreement and Plan of Merger by and
among Automation Acquisition Corporation,
DT Industries, Inc., Mid-West Automation
Enterprises, Inc. and the Stockholders.
2.2 Indemnification and Escrow Agreement.
10 Second Amended and Restated Credit
Facilities Agreement.
99 Press Release of the Company dated
July 22, 1996.
AGREEMENT and Plan of Merger
by and among
Automation Acquisition Corporation,
DT Industries, Inc.,
Mid-West Automation Enterprises, Inc.
and
the Stockholders listed herein
July 19, 1996
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TABLE OF CONTENTS
PAGE
RECITALS ........................................................... 1
ARTICLE I - DEFINITIONS ............................................ 1
Section 1.1 Definitions .................................... 1
Section 1.2 Interpretive Rules ............................. 3
ARTICLE II - THE MERGER ............................................ 4
Section 2.1 The Merger ..................................... 4
Section 2.2 Effective Time of the Merger ................... 4
Section 2.3 Articles of Incorporation ...................... 4
Section 2.4 By-Laws ........................................ 4
Section 2.5 Directors and Officers ......................... 4
Section 2.6 Conversion of Shares ........................... 4
Section 2.7 Closing of the Company Transfer Books .......... 5
Section 2.8 Supplementary Action ........................... 5
ARTICLE III - MERGER CONSIDERATION; CLOSING ........................ 5
Section 3.1 Merger Consideration ........................... 5
Section 3.2 Payment of Merger Consideration ................ 5
Section 3.3 Payment for Stock .............................. 6
Section 3.4 Closing ........................................ 6
ARTICLE IV - ADDITIONAL AGREEMENTS ................................. 7
Section 4.1 Indemnification and Escrow Agreement ........... 7
Section 4.2 Releases ....................................... 7
Section 4.3 Lease Agreement ................................ 7
Section 4.4 Employment and Noncompetition Agreement ........ 7
Section 4.5 HSR Act ........................................ 7
Section 4.6 Termination of Agreements ...................... 7
Section 4.7 Bonus Arrangements ............................. 8
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ARTICLE V - REPRESENTATIONS AND WARRANTIES
OF THE COMPANY ......................................... 9
Section 5.1 Corporate Organization ......................... 9
Section 5.2 Valid and Binding Agreement .................... 9
Section 5.3 No Violation ................................... 10
Section 5.4 Consents and Approvals ......................... 10
Section 5.5 Capitalization ................................. 10
Section 5.6 Subsidiaries and Affiliates .................... 11
Section 5.7 Financial Statements ........................... 11
Section 5.8 Absence of Undisclosed Liabilities ............. 12
Section 5.9 Interim Operations and Absence of Certain
Changes ........................................ 12
Section 5.10 Taxes .......................................... 13
Section 5.11 Employee Benefit Plans ......................... 15
Section 5.12 Compliance with Law ............................ 17
Section 5.13 Litigation; Claims ............................. 18
Section 5.14 Contracts and Commitments ...................... 18
Section 5.15 Intellectual Property Rights ................... 18
Section 5.16 Liens .......................................... 19
Section 5.17 Insurance ...................................... 19
Section 5.18 Accounts Receivable and Accounts Payable ....... 19
Section 5.19 Inventories and Backlog ........................ 20
Section 5.20 Tangible Personal Property ..................... 20
Section 5.21 Real Property .................................. 21
Section 5.22 Environmental Matters .......................... 21
Section 5.23 Governmental Authorizations .................... 23
Section 5.24 Employees ...................................... 23
Section 5.25 Employee Relations ............................. 24
Section 5.26 Customers and Vendors .......................... 24
Section 5.27 Distributors and Representatives ............... 24
Section 5.28 Broker's or Finder's Fees ...................... 24
Section 5.29 Disclosure ..................................... 25
Section 5.30 Certain Transactions ........................... 25
Section 5.31 Absence of Questionable Payments ............... 25
Section 5.32 Directors and Officers; Bank Accounts .......... 25
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Section 5.33 Defects in Products or Designs; Product Safety . 25
Section 5.34 Product Warranties ............................. 26
ARTICLE VI - REPRESENTATIONS AND WARRANTIES OF THE
STOCKHOLDERS .......................................... 26
Section 6.1 Ownership of Stock ............................. 26
Section 6.2 Valid and Binding Agreements ................... 26
Section 6.3 Consents and Approvals ......................... 26
Section 6.4 Broker's or Finder's Fees ...................... 27
ARTICLE VII - REPRESENTATIONS AND WARRANTIES OF THE
BUYER AND THE GUARANTOR .............................. 27
Section 7.1 Corporate Organization ......................... 27
Section 7.2 Valid and Binding Agreements ................... 27
Section 7.3 No Violation ................................... 27
Section 7.4 Consents and Approvals ......................... 27
Section 7.5 Broker's or Finder's Fees ...................... 27
ARTICLE VIII - COVENANTS ........................................... 27
Section 8.1 Compliance with Law ............................ 27
Section 8.2 Operation of Business Prior to Closing ......... 27
Section 8.3 Access ......................................... 30
ARTICLE IX - CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE BUYER AND THE GUARANTOR ........................... 30
Section 9.1 Representations and Warranties ................. 30
Section 9.2 Covenants, Agreements and Conditions ........... 30
Section 9.3 Proceedings .................................... 30
Section 9.4 Corporate Proceedings .......................... 31
Section 9.5 Governmental Approvals ......................... 31
Section 9.6 No Material Adverse Effect ..................... 31
Section 9.7 Insurance ...................................... 31
Section 9.8 Deliveries ..................................... 31
Section 9.9 HSR Act Requirements ........................... 32
Section 9.10 Opinion of Counsel ............................. 32
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Section 9.11 Tax Status Certification ....................... 32
Section 9.12 Payment of Indebtedness ........................ 32
Section 9.13 Evidence of Termination ........................ 32
ARTICLE X - CONDITIONS PRECEDENT TO OBLIGATIONS OF
THE COMPANY AND THE STOCKHOLDERS ....................... 32
Section 10.1 Representations and Warranties ................. 32
Section 10.2 Covenants, Agreements and Conditions ........... 33
Section 10.3 Proceedings .................................... 33
Section 10.4 Corporate Proceedings .......................... 33
Section 10.5 Governmental Approvals ......................... 33
Section 10.6 Deliveries ..................................... 33
Section 10.7 HSR Act Requirements ........................... 33
Section 10.8 Opinion of Counsel ............................. 34
ARTICLE XI - OTHER MATTERS ......................................... 34
Section 11.1 Confidentiality ................................ 34
Section 11.2 Further Assurances ............................. 34
ARTICLE XII - TERMINATION .......................................... 34
Section 12.1 Methods of Termination ......................... 34
Section 12.2 Procedure Upon Termination ..................... 35
ARTICLE XIII - MISCELLANEOUS 35
Section 13.1 Survival of Representations, Warranties and
Agreements ..................................... 35
Section 13.2 Service of Process ............................. 35
Section 13.3 Notices ........................................ 35
Section 13.4 Governing Law .................................. 37
Section 13.5 Modification; Waiver ........................... 37
Section 13.6 Entire Agreement ............................... 37
Section 13.7 Assignment; Successors and Assigns ............. 37
Section 13.8 Public Announcements ........................... 37
Section 13.9 Severability ................................... 37
Section 13.10 No Third Party Beneficiary ..................... 38
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Section 13.11 Expenses ....................................... 38
Section 13.12 Actions by the Stockholders .................... 38
Section 13.13 Execution in Counterpart ....................... 38
EXHIBIT A Stockholders
EXHIBIT B Form of Indemnification and Escrow Agreement
EXHIBIT C Calculation of Key Employee Bonus
EXHIBIT D Form of Articles of Merger
EXHIBIT E Form of Stockholder Release
EXHIBIT E-1 Form of Release from Robert Eitzinger
EXHIBIT F Form of Building Lease
EXHIBIT F-1 Form of Parking Lot Lease
EXHIBIT G Form of Employment and Noncompetition Agreement
EXHIBIT H Form of Opinion of Rudnick & Wolfe
EXHIBIT I Form of Opinion of Dickstein Shapiro Morin & Oshinsky L.L.P.
EXHIBIT J Form of Press Release
Schedule 1 Persons with Knowledge
Schedule 5.1 Foreign Qualifications
Schedule 5.5 Capitalization
Schedule 5.6 Subsidiaries and Affiliates
Schedule 5.7 Company Audited Financial Statements
Schedule 5.7A Subsidiary Unaudited Financial Statements
Schedule 5.7B Year End Adjustments and Exceptions to Subsidiary Unaudited
Financial Statements
Schedule 5.7C Company Cash Receipts and Disbursements
Schedule 5.8 Liabilities and Obligations
Schedule 5.9 Changes During Interim Operations
Schedule 5.10 Tax Matters
Schedule 5.11 Employee Benefit Plans
Schedule 5.13 Litigation; Claims
Schedule 5.14 Contracts and Commitments
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Schedule 5.15 Intellectual Property Rights
Schedule 5.16 Liens
Schedule 5.17 Insurance
Schedule 5.19 Inventories and Backlog
Schedule 5.20 Locations Tangible Personal Property Owned
Schedule 5.20A Tangible Personal Property Leased
Schedule 5.21 Real Property Leased
Schedule 5.23 Governmental Authorizations
Schedule 5.24 Employees
Schedule 5.25 Employee Relations
Schedule 5.26 Customers and Vendors
Schedule 5.27 Distributors and Representatives
Schedule 5.30 Certain Transactions
Schedule 5.32 Directors and Officers; Bank Accounts
Schedule 5.33 Defects in Products or Designs
Schedule 6.1 Encumbrances on Stock
Schedule 7.5 Broker's or Finder's Fees
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), dated July 19,
1996, by and among Automation Acquisition Corporation, an Illinois
corporation (the "Buyer"), DT Industries, Inc., a Delaware corporation (the
"Guarantor"), Mid-West Automation Enterprises, Inc., an Illinois corporation
(the "Company"), and the stockholders of the Company listed on Exhibit A
hereto (the "Stockholders").
RECITALS
WHEREAS, the respective boards of directors of the Buyer and the
Company have approved the merger of the Buyer with and into the Company (the
"Merger"), pursuant to and subject to the conditions set forth herein;
WHEREAS, the Guarantor, as the owner of all of the issued and
outstanding capital stock of the Buyer, has agreed to guaranty the Buyer's
obligations hereunder;
WHEREAS, the Buyer, the Company and the Stockholders desire to make
certain representations, warranties and agreements in connection with the
Merger and to prescribe various conditions to the Merger;
NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties and covenants which are to be made and performed
by the respective parties, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS
SECTION 13.10 DEFINITIONS.
The following terms when used in this Agreement have the
meanings set forth below:
(a) "Accountants" means Altschuler, Melvoin and Glasser LLP,
independent certified public accountants of the Company and its Subsidiaries.
(b) "Affiliate" means any Person now or hereinafter
controlling, controlled by or under common control with another Person.
(c) "Articles of Merger" has the meaning set forth in
Section 2.2.
(d) "BCA" means the Illinois Business Corporation Act of 1983,
as amended.
(e) "CERCLA" has the meaning set forth in Section 5.22(a).
(f) "CERCLIS" has the meaning set forth in Section 5.22(f).
(g) "Closing" has the meaning set forth in Section 3.4.
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(h) "Closing Date" has the meaning set forth in Section 3.4.
(i) "Code" means the United States Internal Revenue Code of
1986, as amended.
(j) "Company Audited Financial Statements" has the meaning set
forth in Section 5.7.
(k) "Subsidiary Unaudited Financial Statements" has the meaning
set forth in Section 5.7.
(l) "Constituent Corporations" means the Buyer and the Company.
(m) "Debt" means all indebtedness, including outstanding
principal and interest and any success fees, prepayment premiums, make-whole
premiums or penalties for borrowed money of the Company and its Subsidiaries
owed to banks, other financial institutions, Stockholders or third parties.
(n) "ERISA" means the Employment Retirement Income Security
Act of 1974, as amended.
(o) "Effective Time" has the meaning set forth in Section 2.2.
(p) "Environmental Laws" has the meaning set forth in
Section 5.22(c).
(q) "Escrow Agent" means the escrow agent selected by the
parties to act pursuant to the Indemnification and Escrow Agreement.
(r) "Escrow Amount" has the meaning set forth in
Section 3.2(b).
(s) "Expenses" means the expenses incurred by the Company and
the Stockholders in connection with the negotiation of this Agreement, the
performance of their respective obligations hereunder and the consummation of
the transactions contemplated herein to the extent such expenses are an
expense, liability or obligation of the Company and its Subsidiaries.
(t) "GAAP" means generally accepted accounting principles of
the United States applied in a manner consistent with past practice of the
Company and its Subsidiaries.
(u) "HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
(v) "Hazardous Material" has the meaning set forth in
Section 5.22(a).
(w) "Indemnification and Escrow Agreement" means an
indemnification and escrow agreement substantially in the form attached
hereto as Exhibit B.
(x) "Intellectual Property" means any and all inventions, Marks
(including trademarks, service marks, certification marks, collective marks,
and collective membership marks whether word, logo, or other forms of Marks,
all of the foregoing collectively referred to as "Marks"), trade names,
copyrights, applications therefor, patents thereon, registrations thereof and
licenses thereof, royalty rights, any and all goodwill associated with the
business or represented by the assets of the Company and its Subsidiaries,
trade secrets, secret processes and procedures, engineering, production,
assembly, installation and design encompassed in any and all embodiments
including, but not limited to technical drawings and specifications, working
notes and memos, market studies, consultants' reports, technical and
laboratory
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data, competitive samples, engineering prototypes, and confidential information,
know-how, and all similar property of any nature, tangible or intangible,
including all property listed or described on Schedule 5.15.
(y) "IRS" means the United States Internal Revenue Service.
(z) "Knowledge" means, with respect to the Company, the
knowledge of the Persons listed on Schedule 1.
(aa) "Leased Improvements" has the meaning set forth in
Section 5.21(b).
(ab) "Leased Property" has the meaning set forth in Section
5.21(b).
(ac) "Material Adverse Effect" means, with respect to any
Person, any event, fact, condition, occurrence or effect which is reasonably
expected to be materially adverse to the business, properties, assets,
liabilities, capitalization, stockholders equity, financial condition,
operations, licenses or other franchises, results of operations or prospects
of such Person.
(ad) "Merger Consideration" has the meaning set forth in
Section 3.1(a).
(ae) "Pension Plans" has the meaning set forth in Section
5.11(c)(i).
(af) "Permits" has the meaning set forth in Section 5.23.
(ag) "Person" means and includes an individual, a partnership, a
joint venture, a corporation or trust, an unincorporated organization, a
group or a government or other department or agency thereof.
(ah) "Plans" has the meaning set forth in Section 5.11(a).
(ai) "Price Waterhouse" means Price Waterhouse LLP, certified
public accountants for the Buyer.
(aj) "Stock" means the common stock of the Company, par value
$0.10 per share.
(ak) "Stockholder Release" means the releases referred to in
Section 4.2.
(al) "Subsidiaries" or "Subsidiary" means each direct or
indirect subsidiary of the Company, including Mid-West Automation Systems,
Inc., an Illinois corporation.
(am) "Surviving Corporation" has the meaning set forth in
Section 2.1.
(an) "Tax" has the meaning set forth in Section 5.10(c).
(ao) "Taxing Authority" has the meaning set forth in
Section 5.10(a).
(ap) "Tax Return" has the meaning set forth in Section 5.10(d).
SECTION 1.2 INTERPRETIVE RULES.
For purposes of this Agreement, except as otherwise expressly
provided herein or unless the context otherwise requires: (a) defined terms
include the plural as well as the singular and the use of any gender shall be
deemed to include the other gender; (b) references to "Articles," "Sections"
and other subdivisions and to "Schedules" and "Exhibits" without reference to
a document, are to designated Articles, Sections and
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other subdivisions of, and to Schedules and Exhibits to, this Agreement;
(c) the use of the term "including" means "including but not limited to"; and
(d) the words "herein," "hereof," "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular provision.
ARTICLE II
THE MERGER
SECTION 2.1 THE MERGER.
At the Effective Time, the Buyer shall be merged with and into
the Company in accordance with the applicable provisions of the BCA and the
separate existence of the Buyer shall thereupon cease, and the Company, as
the surviving corporation in the Merger (the "Surviving Corporation"), shall
continue its corporate existence in accordance with the BCA under the name
Mid-West Automation Enterprises, Inc.
SECTION 2.2 EFFECTIVE TIME OF THE MERGER.
At the Closing, the Company shall cause the Merger to be
consummated by filing with the Secretary of State of Illinois appropriate
articles of merger in substantially the form set forth as Exhibit D (the
"Articles of Merger") duly executed in accordance with this Agreement and the
BCA. The date and time at which the Articles of Merger become effective
under the BCA is referred to herein as the "Effective Time."
SECTION 2.3 ARTICLES OF INCORPORATION.
The Articles of Incorporation of the Company shall be the
Articles of Incorporation of the Surviving Corporation as amended pursuant to
the Articles of Merger.
SECTION 2.4 BY-LAWS.
The By-Laws of the Buyer as in effect at the Effective Time
shall be the By-Laws of the Surviving Corporation.
SECTION 2.5 DIRECTORS AND OFFICERS.
The directors of the Surviving Corporation at the Effective Time
shall be the directors of the Buyer in office immediately prior to the
Effective Time, to serve in accordance with the By-Laws of the Surviving
Corporation. The officers of the Surviving Corporation at the Effective Time
shall be the officers of the Buyer immediately prior to the Effective Time,
to serve in accordance with the By-Laws of the Surviving Corporation.
SECTION 2.6 CONVERSION OF SHARES.
At the Effective Time, by virtue of the Merger and without any
action on the part of the holder of any securities of the Constituent
Corporations:
(a) each share of Stock then outstanding, other than Stock to
be canceled pursuant to Section 2.6(b), and all rights with respect thereto,
shall be
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converted into and represent the right to receive the amounts of cash set forth
in Section 3.1, payable as provided in Section 3.2;
(b) each share of Stock, if any, held in the Company's treasury
or owned beneficially by the Buyer or by any Subsidiary shall be canceled and
retired without payment of any consideration therefor; and
(c) each issued and outstanding share of common stock of the
Buyer, $0.01 par value per share, outstanding immediately prior to the
Effective Time shall remain outstanding and unchanged as a share of common
stock of the Surviving Corporation.
SECTION 2.7 CLOSING OF THE COMPANY TRANSFER BOOKS.
At the Effective Time, the stock transfer books of the Company
shall be closed and there shall be no further registration of transfers of
Stock thereafter. If, after the Effective Time, subject to the terms and
conditions of this Agreement, certificates representing any such shares are
presented to the Surviving Corporation, they shall be canceled and exchanged
for cash in accordance with Section 2.6.
SECTION 2.8 SUPPLEMENTARY ACTION.
If at any time after the Effective Time, any further assignments
or assurances in law or any other things are necessary or desirable to vest
or to perfect or confirm of record in the Surviving Corporation the title to
any property or rights of either of the Constituent Corporations, or
otherwise to carry out the provisions of this Agreement, the officers and
directors of the Surviving Corporation are hereby authorized and empowered on
behalf of the respective Constituent Corporations, in the name of and on
behalf of the appropriate Constituent Corporation, to execute and deliver any
and all things necessary or proper to vest or to perfect or confirm title to
such property or rights in the Surviving Corporation, and otherwise carry out
the purposes and provisions of this Agreement.
ARTICLE III
MERGER CONSIDERATION; CLOSING
SECTION 3.1 MERGER CONSIDERATION.
The aggregate merger consideration (the "Merger Consideration")
shall be Ninety-Six Million Seven Hundred Fifty Thousand Dollars
($96,750,000.00). The Merger Consideration shall be distributed to the
individual Stockholders in accordance with the percentages listed on Exhibit
A and as provided in Section 3.2.
SECTION 3.2 PAYMENT OF MERGER CONSIDERATION.
(a) PAYMENTS TO STOCKHOLDERS. At the Closing, the Buyer shall
pay the Stockholders (i) Ninety-Six Million Seven Hundred Fifty Thousand
Dollars ($96,750,000.00) minus (ii) the Escrow Amount to be deposited with
the Escrow Agent pursuant to Section 3.2(b). The payments to the
Stockholders shall be made on the basis of the percentages listed on Exhibit
A.
(b) ESCROW AMOUNT. The Buyer shall deposit Five Million
Dollars ($5,000,000) (the "Escrow Amount") with the Escrow Agent pursuant to
the terms of the Indemnification and Escrow Agreement.
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(c) EXPENSES. Any Expenses which have not been paid by the
Stockholders at or prior to the Closing pursuant to Section 13.11, shall be
paid by the Stockholders to the Surviving Corporation within ten (10)
business days after receipt of an invoice itemizing such remaining Expenses
in reasonable detail.
(d) INTEREST. All sums to be paid subsequent to the Closing
Date pursuant to this Section 3.2 shall bear interest from and after the
Closing Date, until so paid, at the rate which is equal to the rate of
interest actually earned on the Escrow Amount during such period, computed on
the basis of a 365-day year and paid for the actual number of days elapsed.
Interest calculated in accordance with this Section 3.2(d) shall be due and
payable on the date on which the corresponding payment is due.
(e) FORM OF PAYMENTS. All payments hereunder, other than
payments originating from the Escrow Funds, shall be made by depositing, by
bank wire transfer, the required amount (in immediately available funds) in
an account of the recipient, which account shall be designated by the
recipient at least three (3) business days prior to the date of the required
payment.
SECTION 3.3 PAYMENT FOR STOCK.
(a) At the Closing, the Buyer shall make available for
disbursement in accordance with this Agreement, the aggregate Merger
Consideration (less the Escrow Amount) into which shares of the Company are
to be converted in the Merger pursuant to Section 2.6 hereof. Upon surrender
to the Buyer of an outstanding certificate or certificates, together with an
endorsement or stock power in blank, duly executed, the Buyer shall disburse
to the Stockholder entitled thereto, at the times and in the manner provided
in Section 3.2, the amount of cash into which his shares shall have been
converted in the Merger. Until so surrendered, each certificate which
immediately prior to the Effective Time represented outstanding Stock shall
be deemed for all corporate purposes to evidence only the right to receive
upon such surrender the cash into which his shares represented thereby shall
have been converted in the Merger. No interest shall accrue or be paid on
any cash payable upon the surrender of a certificate or certificates which
immediately prior to the Effective Time represented outstanding Stock. If
outstanding certificates for shares of the Company are not surrendered, or
the cash payment therefor not claimed prior to six years after the Effective
Time (or, in any particular case, prior to such earlier date on which such
cash payment would otherwise escheat to or become the property of any
governmental unit or agency), the unclaimed amounts shall, to the extent
permitted by applicable law, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person
previously entitled thereto.
(b) If the Merger Consideration (or any portion thereof) is to
be delivered to a person other than the person in whose name the certificates
surrendered in exchange therefor are registered, it shall be a condition to
the payment of such Merger Consideration that the certificates so surrendered
shall be properly endorsed or accompanied by appropriate stock powers and
otherwise in proper form for transfer, that such transfer otherwise be proper
and that the person requesting such transfer pay to the Buyer any transfer or
other taxes payable by reason of the foregoing or establish to the
satisfaction of the Buyer that such taxes have been paid or are not required
to be paid. Appropriate procedures shall be implemented to deal with lost
stock certificates.
SECTION 3.4 CLOSING.
The closing of the transactions contemplated hereby (the
"Closing") shall take place at the offices of Rudnick & Wolfe, 203 North
LaSalle Street, Chicago, Illinois on July 19, 1996, or at such other place,
time or date as may be agreed upon by the parties hereto (the "Closing Date").
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ARTICLE IV
ADDITIONAL AGREEMENTS
SECTION 4.1 INDEMNIFICATION AND ESCROW AGREEMENT.
As of the Closing, the Surviving Corporation, the Stockholders
and the Escrow Agent will enter into the Indemnification and Escrow
Agreement, pursuant to which the Buyer shall deliver the Escrow Amount to be
held in escrow by the Escrow Agent.
SECTION 4.2 RELEASES.
As of the Closing, each of the Stockholders shall deliver to the
Surviving Corporation a release substantially in the form attached hereto as
Exhibit E, and Robert Eitzinger shall deliver to the Surviving Corporation a
release substantially in the form attached hereto as Exhibit E-1.
SECTION 4.3 LEASE AGREEMENT.
As of the Closing, the Surviving Corporation and the Subsidiary
shall enter into an agreement with American National Bank and Trust Company
of Chicago, not personally but solely as Trustee under Trust Agreement dated
March 1, 1985 and known as Trust No. 63442, for the lease of the premises
known as 1400 Busch Parkway, Buffalo Grove, Illinois, such agreement to be
substantially in the form attached hereto as Exhibit F. As of the Closing,
the Surviving Corporation and the Subsidiary shall enter into an agreement
with LaSalle National Trust, N.A. Trustee, Trust No. 10-38675-09 dated
June 10, 1981 for the lease of the premises known as Lot 15, Corporate Grove,
Buffalo Grove, Illinois, such agreement to be substantially in the form
attached hereto as Exhibit F-1.
SECTION 4.4 EMPLOYMENT AND NONCOMPETITION AGREEMENT.
As of the Closing, Robert Eitzinger shall enter into an
employment and noncompetition agreement with the Surviving Corporation, such
agreement to be substantially in the form attached hereto as Exhibit G.
SECTION 4.5 HSR ACT.
The Buyer, the Company and the Stockholders agree to furnish to
each other such necessary information and reasonable assistance as may be
requested in connection with any necessary filings or submissions required
pursuant to the HSR Act.
SECTION 4.6 TERMINATION OF AGREEMENTS.
All agreements, whether written or oral, direct or indirect,
between the Company or any Subsidiary and any of the Stockholders or their
Affiliates, including any guaranties of any obligations of the Stockholders
or such Affiliates to third parties, shall be terminated at or prior to the
Closing. At or prior to the Closing the Company shall have assigned its
interest in the split dollar life insurance arrangements insuring the life of
Robert Eitzinger in exchange for the value of such interests as reflected in
the accounts of the Company and its Subsidiaries.
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SECTION 4.7 BONUS ARRANGEMENTS.
(a) Prior to the Closing, the Company and the Subsidiary shall
amend their Key Employee Bonus Plan to provide that: (i) the total account
balances of the participants shall be determined as of the Closing Date and
shall include the security fund account and the full "multiplier" amount for
each participant based on a "multiplier of 2.7; (ii) no further contribution
will be made after the Closing Date; (iii) such total account balances shall
accrue interest at the rate of six percent (6%) per annum from the Closing
Date to the date of distribution; and (iv) any and all forfeitures which
arise under the Key Employee Bonus Plan shall remain within the Key Employee
Bonus Plan and be reallocated to the participants therein in such amounts and
to such participants as Robert Eitzinger may determine in his sole and
absolute discretion; provided that all such reallocations shall be made no
later than the second anniversary of the Closing Date. During the period
commencing on the Closing Date and continuing until all account balances and
accrued interest have been distributed, the Surviving Corporation shall
continue in force the Key Employee Bonus Plan, and shall make no further
amendment to the Key Employee Bonus Plan other than any amendment required by
law.
(b) At or prior to the Closing, the Company shall deliver to
the Buyer or the Surviving Corporation an instrument, satisfactory to counsel
to the Buyer, executed by the Company's Vice President--Finance and chief
financial officer, in which he acknowledges that the amount of the payments
payable to him under the Company's "Key Employees' Bonus Plan" shall be
calculated in the method set forth in Exhibit C.
(c) After the Closing, the Surviving Corporation shall pay the
aggregate amount of seven hundred fifty thousand dollars ($750,000), plus
interest accruing on such amount from the Closing Date to the date of
distribution at the rate of six percent (6%) per annum (the "Additional Key
Employee Bonus"), to certain key, highly compensated, employees of the
Company and its Subsidiary designated by Robert Eitzinger in his sole and
absolute discretion, in consideration of their service to the Company and/or
the Subsidiary prior to the Closing Date. The Additional Key Employee Bonus
shall be paid to those of such key employees, subsequent to the Closing, in
such amounts as Robert Eitzinger shall determine, in his sole and absolute
discretion; provided, however, that (i) payments of Additional Key Employee
Bonus shall not exceed one hundred fifty thousand dollars ($150,000.00) to
any one employee, (ii) distributions of Additional Key Employee Bonus shall
not exceed two hundred thousand dollars ($200,000) during the first year
following the Closing and shall not exceed four hundred fifty thousand
dollars ($450,000) prior to the second anniversary of the Closing, (iii) all
distributions of Additional Key Employee Bonus shall be completed no later
than three (3) years from the date of Closing, and (iv) Robert Eitzinger
shall receive no distributions from the of Additional Key Employee Bonus,
directly or indirectly. From time to time after the Closing, Robert
Eitzinger shall provide written notice to the Surviving Corporation not less
than thirty (30) days prior to the intended date of a payment of Additional
Key Employee Bonus, identifying an eligible key employee or employees to whom
payments are to be made and specifying the gross amount payable to each such
key employee, which amount shall then be paid by the Surviving Corporation to
such key employee or employees, subject to required withholding obligations.
(d) In the event Robert Eitzinger should be or become unable or
unwilling to exercise his rights under paragraph (a) or (c) of this Section
4.7 then, in such event, his wife, Gisela Eitzinger, shall be entitled to
exercise such rights in his stead. In the event Gisela Eitzinger should be
or become unable or unwilling to act or to continue to act in such capacity
then, in such event, Ronald L. Panter and Sherwin S.
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Malis, or the survivor of them, shall be entitled to exercise such rights,
which exercise shall be by joint action while both are surviving.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Buyer as
follows, and the Buyer in agreeing to consummate the transactions
contemplated by this Agreement has relied upon such representations and
warranties, that:
SECTION 5.1 CORPORATE ORGANIZATION.
(a) Each of the Company and its Subsidiaries is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has the requisite power and authority
(corporate and other) to own, lease and operate its properties and to carry
on its business as now being conducted.
(b) Each of the Company and its Subsidiaries is duly qualified
or licensed to do business as a foreign corporation and is in good standing
in each of the jurisdictions listed on Schedule 5.1. Neither the Company nor
its Subsidiaries is qualified or licensed to do business as a foreign
corporation in any other jurisdiction and there are no other jurisdictions in
which the failure to be qualified or licensed as a foreign corporation would
have a Material Adverse Effect on the Company or its Subsidiaries.
(c) The copies of the articles of incorporation and all
amendments thereto of each of the Company and its Subsidiaries, each as
certified by the secretary of state of its jurisdiction of incorporation, and
the by-laws, as amended to date, of each of the Company and its Subsidiaries,
each as certified by its secretary, which have heretofore been delivered to
the Buyer, are true, complete and correct copies of the articles of
incorporation and by-laws of the Company and its Subsidiaries, each as
amended and in effect on the date hereof, and will be true, complete and
correct as of the Closing Date.
(d) The minute books and records of each of the Company and its
Subsidiaries, copies of which have been delivered to the Buyer prior to the
date hereof, are the original minute books and records of the Company and its
Subsidiaries, contain all proceedings of the stockholders, the Board of
Directors and any committees thereof with respect to the Company and its
Subsidiaries, and are true, correct and complete in all material respects.
There have been no changes, alterations or additions to the minute books and
records which have not been furnished to counsel for the Buyer prior to the
date hereof.
SECTION 5.2 VALID AND BINDING AGREEMENT.
The Company has all requisite corporate power and authority to
enter into this Agreement and the Indemnification and Escrow Agreement. All
necessary action on the part of the Company and its stockholders has been
taken to authorize the execution and delivery of this Agreement and the
Indemnification and Escrow Agreement, the performance of its obligations
hereunder and thereunder and the consummation of the transaction contemplated
hereby and thereby. This Agreement has been, and as of the Closing Date, the
Indemnification and Escrow Agreement will be, duly and validly executed and
delivered by the Company, and will constitute valid and binding agreements of
the Company, enforceable in accordance with their respective terms, except as
the enforceability thereof may be limited by bankruptcy, insolvency,
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fraudulent transfer, reorganization, moratorium and similar laws of general
application relating to or affecting creditors' rights generally and to
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 5.3 NO VIOLATION.
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby nor compliance by the
Company with any of the provision hereof will (i) violate or conflict with
any provision of the articles of incorporation or by-laws of the Company or
any of its Subsidiaries, or any statute, code, ordinance, rule, regulation,
judgment, order, writ, decree or injunction applicable to the Company, or
(ii) violate, or conflict with, or result in a breach of any provision of, or
constitute a default (or any event which, with or without due notice or lapse
of time, or both, would constitute a default) under, or result in the
termination of, accelerate the performance required by, or result in the
creation of any lien, security interest, charge or other encumbrance upon the
Stock or any of the properties or assets of the Company or its Subsidiaries
under any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation of which the Company or its Subsidiaries is a party or by which
the Company or its Subsidiaries or any of their assets are bound, except, in
each case, where such violations, conflicts, breaches or defaults,
individually or in the aggregate do not have a Material Adverse Effect on the
Company or its Subsidiary.
SECTION 5.4 CONSENTS AND APPROVALS.
Except for any filings required by the HSR Act or for the filing
of the Articles of Merger, no permit, consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority or third party is required to be made or obtained by the Company or
its Subsidiaries in connection with the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated hereby.
SECTION 5.5 CAPITALIZATION.
(a) The authorized capital stock of the Company consists solely
of one hundred thousand (100,000) shares of Common Stock, of which ten
thousand (10,000) shares are issued and outstanding and held as follows: six
thousand seven hundred (6,700) shares by RGA Associates, an Illinois limited
partnership and three thousand three hundred (3,300) shares by Robert
Eitzinger Trust No. 1 dated January 5, 1989. The issued and outstanding
common stock is duly authorized, validly issued, fully paid and
nonassessable, and none of the issued and outstanding shares of common stock
were issued in violation of the preemptive rights of any present or former
stockholder of the Company. The authorized capital stock of Mid-West
Automation Systems, Inc., an Illinois corporation ("Systems"), consists of
ten thousand (10,000) shares of common stock, no par value, of which one
thousand (1,000) are issued and outstanding. All of such shares are owned by
the Company and are duly authorized, validly issued, fully paid and
nonassessable, and none of the issued and outstanding shares of Systems were
issued in violation of the preemptive rights of any present or former
stockholder of Systems.
(b) Except as set forth in Section 5.5(a) or Schedule 5.5,
(i) there are no shares of capital stock or other equity securities (as the
term "equity security" is defined in the Securities Exchange Act of 1934, as
amended) of the Company or its Subsidiaries outstanding, (ii) there are no
outstanding subscriptions, options, warrants or rights to purchase or acquire
any equity securities of the Company or its Subsidiaries, (iii) no
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equity securities of the Company or its Subsidiaries are reserved for issuance
for any purpose, and (iv) there are no contracts, commitments, agreements,
understandings, arrangements or restrictions to which the Company or its
Subsidiaries is a party or by which the Company or its Subsidiaries is bound
relating to any shares of the capital stock or other equity securities of the
Company (including the Stock) or its Subsidiaries, whether or not outstanding.
(c) The Stockholders are the only record holders of the Stock
and there is no lien, encumbrance or other interest relating to the Stock or
any other equity securities held of record by any other Person.
SECTION 5.6 SUBSIDIARIES AND AFFILIATES.
(a) Except as set forth on Schedule 5.6, neither the Company
nor its Subsidiaries owns any capital stock or other equity securities of any
other corporation and has no other type of interest (whether ownership or
other) in any other corporation, partnership, joint venture or other business
organization or entity. The interests of the Company and its Subsidiaries in
any Person as set forth on Schedule 5.6 are owned by the Company or such
Subsidiary free and clear of all liens, options, claims or encumbrances
(including without limitation, rights of first refusal or similar rights)
with respect to the ownership thereof. Neither the Company nor its
Subsidiaries is subject to any obligation or requirement to provide funds
for, or to make any investment (in the form of a loan, capital contribution
or otherwise) to or in, any Person.
(b) Except as set forth on Schedule 5.6, neither the
Stockholders nor any of their Affiliates have any direct or indirect interest
in any Person that competes with, conducts any business similar to, has any
agreement or arrangement with or is involved in any way with, the business
conducted by the Company and its Subsidiaries. None of such Stockholders nor
any of their Affiliates have any direct or indirect interest in any property
used by, or relating to, the business of the Company and its Subsidiaries,
except by virtue of ownership of the Stock, which interest will be
transferred upon consummation of the Merger.
SECTION 5.7 FINANCIAL STATEMENTS.
(a) The audited consolidated financial statements of the
Company and its Subsidiaries for each of the two (2) years ended May 30, 1993
and May 29, 1994 and the audited combined financial statements of the Company
and its Subsidiary and Mid-West Automation International, Inc.
("International") for the fiscal year ended May 28, 1995, attached as
Schedule 5.7 hereto (the "Company Audited Financial Statements") (i) do not
present, in conformity with GAAP, the consolidated/combined financial
position, results of operations or cash flows solely because of the effects
of the departures from GAAP as disclosed in the report of the auditors
thereon, as of the statement dates and for the periods indicated, and
(ii) have been prepared in accordance with the Company's customary procedures
for the preparation of financial statements consistently applied throughout
and among the periods indicated.
(b) The unaudited financial data, consisting of a preliminary
balance sheet and statement of operations for Mid-West Automation Systems,
Inc. as of and for the fiscal year ended May 26, 1996, attached as Schedule
5.7A hereto (the "Subsidiary Unaudited Financial Statements") have been
prepared in accordance with the Company's customary procedures for the
preparation of interim, unaudited financial statements and are consistent
with the audited combined financial statements of the Company and its
Subsidiary and International for the fiscal year ended May 28, 1995 subject
to the omission of information relating to the Company and International and
subject to certain year-end audit and other normal or recurring year-end
adjustments as shown on Schedule 5.7B (made in accordance with GAAP, in the
ordinary course of business and
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consistent with prior year-end accounting principles and adjustments except as
noted on Schedule 5.7B).
(c) The schedule of cash receipts and disbursements of the
Company for the fiscal year ended May 26, 1996 attached as Schedule 5.7C
hereto reflects all of the cash transactions of the Company for the fiscal
year ended May 26, 1996.
(d) Neither the Company, nor any Subsidiary has any Debt or
will have any Debt on the Closing Date.
SECTION 5.8 ABSENCE OF UNDISCLOSED LIABILITIES.
Except as set forth on Schedule 5.8, neither the Company nor its
Subsidiaries has any liability or obligation (absolute, accrued, contingent
or otherwise) of a type and amount which would be required to be reflected,
reserved against or disclosed in financial statements of the Company in
accordance with GAAP, including any guaranty with respect to any obligation,
except (a) such liabilities or obligations as are fully reflected, reserved
against or disclosed in the Company Audited Financial Statements (or the
footnotes thereto) and (b) such liabilities or obligations as have been
incurred in the ordinary course of business, consistent with past practice,
since May 28, 1995.
SECTION 5.9 INTERIM OPERATIONS AND ABSENCE OF CERTAIN CHANGES.
Since May 28, 1995, except as set forth on Schedule 5.9, the
Company and its Subsidiaries have conducted their business in the ordinary
course and consistent with past practice, and the Company and its
Subsidiaries did not:
(a) incur any Debt or, to the Knowledge of the Company, any
other liabilities (whether absolute, accrued, contingent or otherwise) or
guarantee any such indebtedness, except in the usual and ordinary course of
their business, consistent with past practice;
(b) suffer any damage, destruction or loss of tangible assets,
whether or not covered by insurance, in excess of $100,000;
(c) suffer any change in their financial condition, assets,
liabilities or business or suffer any other event or condition of any
character which individually or in the aggregate had or has a Material
Adverse Effect on the Company or its Subsidiaries or materially diminishes
the value of the assets of the Company or its Subsidiaries;
(d) pay, discharge or satisfy any claims, liabilities or
obligations (absolute, accrued, contingent or otherwise) except in each case
in the ordinary course of business;
(e) cancel any debts or waive any claims or rights in excess of
$100,000, except in each case in the ordinary course of business;
(f) permit any material insurance policy to be cancelled or
terminated and not replaced;
(g) pledge or permit the imposition of any lien on or sell,
assign, transfer or otherwise dispose of any of its tangible assets having an
original acquisition cost in excess of $100,000, except the sale of inventory
in the ordinary course of business or in connection with the replacement of
equipment in the ordinary course of business;
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(h) factor, discount or otherwise accept less than full payment
with regard to its accounts receivable and other amounts due or sell any
inventory at less than fair market value or make any bulk sale of such
inventory;
(i) sell, assign, encumber, license, pledge, abandon or
otherwise transfer any patents, applications for patents, Marks, trade names,
copyrights, licenses or other intangible assets;
(j) make any change in any method of accounting or accounting
principle or practice;
(k) write up or down the value of the inventory or determine as
collectible any notes or accounts receivable that were previously considered
to be uncollectible, except for write-ups or write-downs and other
determinations in accordance with GAAP and in the ordinary course of business
and consistent with past practice;
(l) except for (i) payments of accrued items reflected in the
Company Audited Financial Statements as of May 28, 1995, (ii) payments in
accordance with the terms of leases relating to the Leased Property, and
(iii) payment of a bonus and DISC commission of not more than $7,600,000 in
the aggregate expensed prior to May 26, 1996 and to be disbursed prior to
Closing, make any payment of cash or transfer of any assets to any
Stockholder or any Affiliate of a Stockholder;
(m) grant any general increase in the compensation payable or
to become payable to their officers or employees (including any such increase
pursuant to any bonus, pension, profit-sharing or other plan or commitment)
or any special increase in the compensation payable or to become payable to
any officer or employee, except for normal merit and cost of living increases
in the ordinary course of business and in accordance with past practice;
(n) declare, pay or set aside for payment any dividend or other
distribution on any shares of their capital stock; split, combine or
reclassify any of its capital stock or issue or authorize or propose the
issuance of any other securities in respect of, in lieu of or in substitution
for shares of its capital stock; or repurchase or otherwise acquire any
shares of its capital stock;
(o) make any loans which in the aggregate exceed $15,000 to any
employee or make any loans to any stockholder, officer, director or Affiliate;
(p) make individual capital expenditures or commitments for
same in excess of $100,000 or in excess of $1,750,000 in the aggregate;
(q) lose or learn of the prospective loss of any customer or
vendor listed on Schedule 5.26 or any representative or agent listed on
Schedule 5.27; or
(r) agree or propose, whether in writing or otherwise, to take
any action described in this Section 5.9.
SECTION 5.10 TAXES.
(a) Each of the Company and its Subsidiaries has duly and
timely filed with each appropriate federal, state, local and foreign
governmental entity or other authority (individually or collectively, "Taxing
Authority") all Tax Returns required to be filed. All such Tax Returns were
true, correct and complete in all material respects. Each of the Company and
its Subsidiaries has paid all Taxes which have become due and payable
(whether or not shown on any Tax Return). Adequate reserves and accruals in
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accordance with GAAP have been established to provide for the payment of all
Taxes which are not yet due and payable with respect to the Company or its
Subsidiaries for taxable periods or portions thereof ending on or before the
Closing Date. There are no liens for Taxes upon the Company or its Subsidiaries
or their assets except liens for current Taxes not yet due. The Company and
its Subsidiaries have delivered to the Buyer correct and complete copies of all
federal and state income Tax Returns for the five (5) most recently completed
years, all examination reports by any Taxing Authority, and any statements of
deficiencies proposed or assessed against or agreed to by the Company or its
Subsidiaries. No audit, examination, investigation, proceeding, action or claim
with respect to the Company's or its Subsidiaries' Taxes is pending, proposed
or to the Knowledge of the Company, threatened, and there is not, to the
Knowledge of the Company, any basis for the assessment or collection of
additional Taxes against the Company or its Subsidiaries. Except as set forth
on Schedule 5.10, during the past five (5) years there has not been an
examination or notice of potential examination of the Tax Returns of the Company
or its Subsidiaries by any Taxing Authority. No extension is in effect with
respect to the filing of any Tax Return, the payment of any Taxes, or any
limitation period regarding the assessment or collection of any Taxes.
(b) All Taxes that are required to have been withheld or
collected by the Company and its Subsidiaries have been duly withheld or
collected and, to the extent required, have been paid to the proper
governmental authorities or properly deposited as required by applicable laws.
(c) As used in this Agreement, "Tax" means any of the Taxes and
"Taxes" means, with respect to the Company and its Subsidiaries, all income
taxes (including any tax on or based upon net income, or gross income, or
income as specially defined, or earnings, or profits, or selected items of
income, earnings or profits) and all gross receipts, sales, use, ad valorem,
transfer, franchise, license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property or windfall profit taxes,
alternative or add-on minimum taxes, custom duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest,
penalties, additions to tax or additional amounts imposed by any Taxing
Authority whether disputed or not.
(d) As used in this Agreement, "Tax Return" is defined as any
return, report, information return or other document (including any related
or supporting information) filed or required to be filed with any Taxing
Authority or other authority in connection with the determination, assessment
or collection of any Tax paid or payable by the Company or its Subsidiaries
or the administration of any laws, regulations or administrative requirements
relating to any such Tax.
(e) Schedule 5.10 lists the jurisdictions in which any of the
Company and its Subsidiaries either files Tax Returns or pays Taxes with
respect to which no returns are required to be filed. To the Knowledge of
the Company, no claim has ever been made by any Taxing Authority in a
jurisdiction where any of the Company and its Subsidiaries does not file Tax
Returns that it is or may be subject to taxation by that jurisdiction.
(f) No Stockholder is a foreign person within the meaning of
Section 1445(b)(2) of the Code.
(g) No property of any of the Company and its Subsidiaries is
property that the Company or such Subsidiary is or will be required to treat
as owned for tax purposes by another person, or is "tax-exempt use property"
as defined in Section 168(h) of the Code.
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(h) None of the Company and its Subsidiaries has during the
past five (5) years agreed to or been required to make any adjustment
pursuant to Section 481(a) of the Code by reason of any change in accounting
method initiated by it; no Taxing Authority has proposed any such adjustment
or change in accounting method; and none of the Company and its Subsidiaries
has any application pending with any Taxing Authority requesting permission
for any change in accounting method.
(i) None of the Company and its Subsidiaries is now nor during
the applicable period specified in Section 897(c)(1)(A)(ii) of the Code has
ever been a United States real property holding corporation as defined in
Section 897(c)(2) of the Code.
(j) None of the Company and its Subsidiaries is now nor has
ever been a party to any agreement, contract, arrangement or plan that would
result, separately or in the aggregate, in the payment of any "excess
parachute payments" within the meaning of Section 280G of the Code.
(k) None of the Company and its Subsidiaries has filed any
consent under Section 341(f) of the Code.
(l) None of the Company and its Subsidiaries has ever been
(i) a member of an affiliated, consolidated, unitary or combined group filing
a combined, consolidated, or unitary Tax Return (other than a group the
common parent of which was the Company), or (ii) a party to any tax
allocation, sharing or reimbursement agreement or arrangement.
(m) Except as set forth on Schedule 5.10, none of the Company
and its Subsidiaries is an obligor on, and none of its assets has been
financed directly or indirectly by, any tax-exempt bonds.
(n) None of the Company and its Subsidiaries has executed or
entered into a closing agreement pursuant to Section 7121 of the Code or any
predecessor provision thereof or any similar provision of state, local or
foreign law.
(o) None of the Company and its Subsidiaries has any liability
for the Taxes of any Person (other than any of the Company and its
Subsidiaries) under Treas. Reg. Section 1.1502-6 (or any similar provision of
state, local, or foreign law), as a transferee or successor, by contract, or
otherwise.
(p) None of the Company and its Subsidiaries has pending any
ruling requests with any Taxing Authority.
(q) None of the Company and its Subsidiaries has been a
personal holding company within the meaning of Section 542 of the Code during
the five-year period preceding the date hereof.
(r) Each of the Company and its Subsidiaries has disclosed on
its federal income tax Returns all positions therein that could give rise to
a substantial understatement of federal income tax within the meaning of Code
Section 6662.
SECTION 5.11 EMPLOYEE BENEFIT PLANS.
(a) Schedule 5.11 is a true and complete list of all annuity,
bonus, cafeteria, stock option, stock purchase, profit sharing, savings,
pension, retirement, incentive, group insurance, disability, employee
welfare, prepaid legal, nonqualified deferred compensation including without
limitation, excess benefit plans, top-hat plans, deferred bonuses, rabbi
trusts, secular trusts, nonqualified annuity contracts, insurance
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arrangements, nonqualified stock options, phantom stock plans, or golden
parachute payments, or other similar fringe benefit plans, and all other
employee benefit funds or programs (within the meaning of Section 3(3) of
ERISA), covering employees, former employees or directors of the Company and
its Subsidiaries (the "Plans"). Except as set forth on Schedule 5.11,
neither the Company nor its Subsidiaries is a party to any employee
agreement, understanding, plan, policy, procedure, pattern or practice, or
other arrangement, whether written or oral, which provides compensation or
fringe benefits to its employees, and the Company and its Subsidiaries are in
compliance with all its obligations under all such Plans. Except for changes
required by applicable law, there are no negotiations, demands, commitments
or proposals that are pending or that have been made that concern matters now
covered, or that would be covered by the type of agreements described on
Schedule 5.11 or in this Section 5.11(a).
(b) With respect to each employee benefit plan listed on
Schedule 5.11, true and complete copies of (i) all Plan documents (including
all amendments and modifications thereof), and related agreements including
without limitation, the trust agreement and amendments thereto, insurance
contracts and investment management agreements; (ii) the last three filed
Form 5500 series and Schedules A, B, C, P and/or SSA, as applicable, and
Forms PBGC-1, if any; (iii) summary plan descriptions; (iv) summary of
material modifications, if any; (v) the most recent auditor's report, and
copies of any and all tax qualification correspondence including without
limitation, private letter rulings, applications for determination and
determination letters issued with respect to the Plans; and (vi) the most
recent annual and periodic accounting of related Plan assets, have also been
delivered to the Buyer.
(c) With respect to the Plans listed on Schedule 5.11 which are
subject to ERISA:
(i) The Plans are in material compliance with the
applicable provisions of ERISA and each of the employee pension benefit
plans, within the meaning of Section 3(2) of ERISA (the "Pension Plans"),
which are intended to be qualified under Section 401(a) of the Code have
received a favorable determination letter from the IRS or a request for such
determination has been timely filed with the IRS (and to the Knowledge of the
Company, nothing has occurred to cause the IRS to revoke such determination
and the IRS has not indicated any disapproval of any request for such a
determination);
(ii) Each Plan has been operated in accordance with its
terms and all required filings that are due prior to the date hereof,
including without limitation, the Forms 5500, for all Plans have been timely
made;
(iii) No prohibited transactions, as defined by Section
406 of ERISA or Section 4975 of the Code, have occurred with respect to any of
the Plans;
(iv) None of the Plans, nor any trust which serves as a
funding medium for any of such Plans, nor any issue relating thereto is
currently under examination by or pending before the IRS, the Department of
Labor, the PBGC or any court, other than applications for determinations
pending before the IRS;
(v) Except as set forth on Schedule 5.11(c)(v), none of
the Pension Plans is a defined benefit plan within the meaning of Section
414(j) of the Code;
(vi) Except as set forth on Schedule 5.11(c)(vi), none of
the Plans is a "multiemployer plan" as that term is defined in Section 3(37)
of ERISA and Section 411(f) of the Code, nor a plan maintained by more than
one employer (hereinafter
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referred to as an "multiple employer plan"), nor a single employer plan under a
multiple controlled group within the meaning of Section 4063 of ERISA, and
neither the Company, its Subsidiaries, nor any entity required to be aggregated
with the Company or its Subsidiaries under Section 414(b), (c), (m), or (o) of
the Code has incurred any withdrawal liability with respect to any single plan,
multiemployer or multiple employer plan, which liability could constitute a
liability of the Surviving Corporation;
(vii) Except as set forth on Schedule 5.11(c)(vii), no
benefit claims (except those submitted in the ordinary course of
administration of such Plan) are currently pending against any Plan;
(viii) Except as set forth on Schedule 5.11(c)(viii), no
Plan provides for retiree medical or retiree life insurance benefits for current
or former employees of the Company or its Subsidiaries, and there is no
liability for taxes with respect to disqualified benefits under Section 4976
of the Code; and
(ix) During the past five (5) years, no Pension Plan has
been terminated by the Company or its Subsidiaries, and there is no liability
for taxes with respect to a reversion of qualified plan assets under Section
4980 of the Code.
(d) During the past five (5) years, there have been no failures
to comply with the continuation coverage provisions required by Sections
601-608 of ERISA and Section 4980B of the Code under any Plan.
(e) There are no employee benefit plans which cover employees
of the Company or its Subsidiaries which are required to comply with the
provisions of any foreign law.
(f) All excess contributions, if any (together with any income
allocable thereto), have been distributed (or, if forfeitable, forfeited)
before the close of the first two and one half (2 1/2) months of the following
plan year; and there is no liability for excise tax under Section 4979 of the
Code with respect to such excess contributions, if any, for any Plan.
(g) There is no liability for Taxes with respect to: (i) an
accumulated funding deficiency under Section 4971 of the Code and/or (ii) a
nondeductible contribution under Section 4792 of the Code.
(h) Attached hereto as Schedule 5.11(h) is a true, correct and
complete copy of the Company's Key Employee's Bonus Plan and all amendments
thereto as of the date hereof. Exhibit C accurately describes the correct
method in which the amounts payable to participants in the Company's Key
Employees Bonus Plan may be determined.
SECTION 5.12 COMPLIANCE WITH LAW.
The Company and its Subsidiaries have been, are and on the
Closing Date will be in compliance with all applicable laws (including duties
imposed by common law), rules, regulations, orders, ordinances, judgments and
decrees of all governmental authorities (federal, state, local and foreign)
and all requirements imposed under building, zoning, occupational safety and
health, pension, environmental control, toxic waste, fair employment, equal
opportunity or similar laws, rules, regulations and ordinances, in each case
the noncompliance with which would be likely to have a Material Adverse
Effect on the Company or its Subsidiaries.
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SECTION 5.13 LITIGATION; CLAIMS.
Schedule 5.13 hereto contains a complete and accurate list of
(a) all claims, actions, suits, proceedings or investigations pending or (to
the Knowledge of the Company) threatened by or against the Company or its
Subsidiaries, and (b) all judgments, decrees, arbitration awards, agreements
or orders binding upon the Company or its Subsidiaries. Except as set forth
on Schedule 5.13, no material claims, including without limitation, product
liability claims, have been asserted against the Company or its Subsidiaries
during the past ten (10) years, and, to the Knowledge of the Company, there
is no basis for any material action, proceeding or investigation involving
the Company or its Subsidiaries, other than as set forth on Schedule 5.13.
SECTION 5.14 CONTRACTS AND COMMITMENTS.
(a) Schedule 5.14 contains a complete and accurate list of all
contracts, agreements and commitments existing as of July 15, 1996 (other
than the agreements or arrangements set forth in Schedules 5.11, 5.15, 5.17,
5.20A, 5.21, 5.24 and 5.26), whether written or oral, of the Company and its
Subsidiaries that: (i) involve commitments in excess of $100,000 each
(excluding ordinary course purchase orders of inventory and materials),
(ii) involve commitments in excess of $500,000 each for the purchase of
inventory or materials in the ordinary course, (iii) have a term of twelve
(12) months or more, or (iv) are not in the ordinary course of business.
(b) The agreements set forth in Schedules 5.11, 5.14, 5.15,
5.17, 5.20A, 5.21, 5.24 and 5.26 are hereinafter referred to collectively as
the "Operating Agreements." None of the Operating Agreements has been
assigned or is the subject of any security agreement, except as set forth on
Schedule 5.14. Except as otherwise set forth on Schedule 5.14, (i) each of
the Operating Agreements is a valid and binding obligation of the Company or
the Subsidiary party thereto and (to the Knowledge of the Company) the other
party or parties thereto, enforceable in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization or
similar laws or equitable principles relating to creditors' rights generally;
(ii) neither the Company or the Subsidiary party thereto nor (to the
Knowledge of the Company) any other party thereto, has terminated, canceled,
modified or waived any term or condition of any Operating Agreement; and
(iii) neither the Company or the Subsidiary party thereto nor (to the
Knowledge of the Company) any other party to any Operating Agreement is in
default or alleged to be in default under any Operating Agreement and there
exists no event, condition or occurrence that, after notice or lapse of time,
or both, would constitute such a default by the Company or such Subsidiary or
(to the Knowledge of the Company) any other party to any such Operating
Agreement. None of such Operating Agreements contains any covenant or other
restriction preventing or limiting the consummation of the transactions
contemplated hereby, including any provision prohibiting the assignment of
the Company's rights thereunder or granting any party a right of termination
or modification of any provision as a result thereof. Neither the Company
nor its Subsidiaries has any outstanding powers of attorney except routine
powers of attorney relating to the representation of the Company or its
Subsidiaries before governmental agencies or given in connection with
qualification to conduct business or customs matters. The Company delivered
to the Buyer a copy of each of the written Operating Agreements and a
description of the terms and conditions of any oral Operating Agreements.
SECTION 5.15 INTELLECTUAL PROPERTY RIGHTS.
Schedule 5.15 contains a correct and complete list of the
following assets and related matters: (a) all patents and applications for
patents, all Marks and registration of Marks and applications for
registration of Marks, all copyright
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registrations and applications for copyright registration, and all trade names,
owned or used (pursuant to license agreements or otherwise) by the Company and
its Subsidiaries, and in the case of any such Intellectual Property that is so
owned, the jurisdictions in or by which such assets or any of them have been
registered, filed or issued and (b) to the extent not listed on Schedule 5.14,
all contracts, agreements or understandings pursuant to which the Company or its
Subsidiaries has authorized any Person to use any of the Intellectual
Property which is so owned. Each of the Company and its Subsidiaries owns,
possesses or licenses and as of the Closing Date will own, possess or
license, all right, title and interest in and to the items of Intellectual
Property that are required to conduct its business as now conducted without
conflict with the rights of others. Except as set forth on Schedule 5.15:
(a) the Company and its Subsidiaries have the right to use and, to the
Knowledge of the Company, the sole and exclusive rights to use, the
Intellectual Property (including applications for any of the foregoing) used
in connection with the business of the Company and its Subsidiaries, and none
of the past or present employees, officers, directors or stockholders of the
Company or its Subsidiaries, or anyone else, has any rights with respect
thereto; (b) the consummation of the transactions contemplated hereby will
not alter or impair any such rights; (c) neither the Company nor its
Subsidiaries has received any notice or claim of infringement or any claim
challenging or questioning the validity or effectiveness of any of the items
of Intellectual Property, and to the Knowledge of the Company there is no
valid basis for any such claim; and (d) neither the Company nor its
Subsidiaries is liable, nor has it made any contract or arrangement whereby
it may become liable, to any Person for any royalty or other compensation for
use of any of the items of Intellectual Property.
SECTION 5.16 LIENS.
Except as set forth on Schedule 5.16, the title, interest or
estate of the Company or any of its Subsidiaries in the properties or assets,
whether real, personal or mixed, or tangible or intangible, owned or leased
by the Company or its Subsidiaries is not subject to any mortgage, lien,
encumbrance or other security interest, except for (a) liens for taxes and
assessments or governmental charges or levies not at the time due; (b) liens
in respect of pledges or deposits under workmen's compensation laws or
similar legislation, carriers', warehousemen's, mechanics', laborers' and
materialmen's and similar liens, if the obligations secured by such liens are
not then delinquent or are being contested in good faith by appropriate
proceedings; and (c) liens incidental to the conduct of the business.
SECTION 5.17 INSURANCE.
All insurance policies and fidelity bonds relating to the assets
of the Company and its Subsidiaries, including summary descriptions and the
termination dates thereof, are set forth on Schedule 5.17. Except as set
forth on Schedule 5.17, the Company and its Subsidiaries have not had
coverage denied or limited by any insurance carrier to which they have
applied for insurance or with which they have carried insurance, during the
last two (2) years.
SECTION 5.18 ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE.
All accounts receivable of the Company and its Subsidiaries,
whether reflected on the Company Audited Financial Statements and/or the
Subsidiary Unaudited Financial Statements, or otherwise, represent sales
actually made in the ordinary course of business or valid claims as to which
full performance has been rendered, and the reserves against the accounts
receivable for returns and bad debts are commercially reasonable and have
been determined in accordance with GAAP, consistently applied. Except to the
extent reserved against the accounts receivable, no counterclaims or
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offsetting claims with respect to the accounts receivable are pending or, to
the Knowledge of the Company, threatened. The accounts payable of the
Company and its Subsidiaries reflected on the Company Audited Financial
Statements and the Subsidiary Unaudited Financial Statements arose from bona
fide transactions in the ordinary course of business, and all such accounts
payable have been paid, are not yet due and payable under the Company's or
its Subsidiaries' payment policies and procedures (copies of which have been
previously provided to the Buyer), or are being contested by the Company or
its Subsidiaries in good faith.
SECTION 5.19 INVENTORIES AND BACKLOG.
The inventories of the Company and its Subsidiaries as of the
date hereof consist of raw materials, goods in process and finished goods
salable or usable in the normal course of the businesses of the Company and
its Subsidiaries, and such inventories are, and shall be on the Closing Date,
at levels consistent with past practices of the businesses. All such
inventories are carried on the books of the Company or its Subsidiaries
pursuant to the normal inventory valuation policies of the Company or such
Subsidiary as reflected in the Company Audited Financial Statements. Any
expected losses on customer contracts in progress are recognized and recorded
in the period in which such losses are determined. Schedule 5.19 sets forth
the locations of all inventories of the Company and its Subsidiaries. Except
as set forth on Schedule 5.19, no items included in inventories of the
Company or its Subsidiaries are or will be pledged as collateral or held by
the Company or its Subsidiaries on consignment from others. Neither the
Company nor its Subsidiaries is committed to purchase inventories in amounts
greater than are reasonably expected to be usable in the ordinary course of
business as presently conducted. With respect to inventories in the hands of
suppliers for which the Company or its Subsidiaries will be committed on the
Closing Date, such inventories on the Closing Date will be reasonably
expected to be usable in the ordinary course of business as presently being
conducted. At June 30, 1996, the backlog of firm orders for the Company and
its Subsidiaries was $95,770,822. Schedule 5.19 sets forth as of June 30,
1996 each order of such backlog in excess of $250,000 and the scheduled or
committed delivery date thereof.
SECTION 5.20 TANGIBLE PERSONAL PROPERTY.
All of the fixed assets of the Company and its Subsidiaries and
each item of tangible personal property, other than vehicles, inventory
(whether finished goods or raw materials) or supplies, owned by the Company
and its Subsidiaries including all such furniture, furnishings, office
equipment, machinery, tools and other equipment is located at the address set
forth on Schedule 5.20. Except for fixed assets and tangible personal
property disposed of in the ordinary course of business since the applicable
balance sheet date, the Company or one of its Subsidiaries has, and on the
Closing Date will have, good and legal title to all of the fixed assets and
tangible personal property reflected in the Company Audited Financial
Statements, the Subsidiary Unaudited Financial Statements and/or the
accounting books and records of the Company and/or its Subsidiaries, free and
clear of all liens, claims and encumbrances except as set forth on Schedule
5.16. Schedule 5.20A lists all leases of tangible personal property
requiring rental payments in excess of $60,000 per year leased by the Company
and its Subsidiaries and the location thereof. Except as set forth on
Schedule 5.20A, none of such leases contains any covenant or restriction
preventing or limiting the consummation of the transactions contemplated
hereunder. All of the fixed assets and items of tangible personal property
of the Company and its Subsidiaries and the assets leased pursuant to the
leases listed on Schedule 5.20A are suitable for the uses for which they are
employed, are in good operating condition and repair (ordinary wear and tear
excepted) and have been maintained in accordance with best industry practice.
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SECTION 5.21 REAL PROPERTY.
(a) Neither the Company nor its Subsidiaries owns any real
property or has agreed (or has any option) to purchase, sell or lease to a
third party, or is obligated to purchase, sell or lease to a third party in
connection with its business, any real property.
(b) Schedule 5.21 contains a correct and complete list of all
the real property that is leased by the Company and its Subsidiaries or that
the Company and its Subsidiaries have agreed (or have an option) to lease, or
may be obligated to lease. Such real property is hereinafter referred to as
the "Leased Property," and the improvements and fixtures thereon are
hereinafter referred to as the "Leased Improvements."
(c) Except as set forth on Schedule 5.21, either the Company or
one of its Subsidiaries is the sole legal and equitable owner of the
leasehold interest in the Leased Property and the Leased Improvements and
possess good and marketable, indefeasible title thereto, free and clear of
all conditions, exceptions, reservations, liens, restrictions, rights-of-way,
easements, encumbrances and other matters affecting title to such leasehold
that could impair the ability of the Company or such Subsidiary to realize
the benefits of the rights provided to it under its lease as such rights are
currently utilized in the conduct of the business of the Company or such
Subsidiary consistent with past practice.
(d) There are no adverse or other parties in possession of the
Leased Property, the Leased Improvements, or any portion or portions thereof,
and on the Closing Date the leasehold interests in the Leased Property and
the Leased Improvements will be free and clear of any and all leases,
licensees, occupants or tenants except as set forth on Schedule 5.21. There
are no pending or to the Knowledge of the Company threatened condemnation,
eminent domain or similar proceedings, or litigation or other proceedings
affecting the Leased Property, the Leased Improvements or any portion or
portions thereof. To the Knowledge of the Company, there are no pending or
threatened requests, applications or proceedings to alter or restrict any
zoning or other use restrictions applicable to the Leased Property or the
Leased Improvements that would interfere with the conduct of the business of
the Company and its Subsidiaries or the use of their assets consistent with
past practice, which interference would have a Material Adverse Effect on the
business of the Company or its Subsidiaries. Except as set forth on Schedule
5.21, to the Knowledge of the Company, all water, sewer, gas, electric,
telephone, drainage and other utility equipment, facilities and services
required by law or necessary for the operation of the Leased Improvements are
installed and connected pursuant to valid permits and no notice has been
received by the Company or its Subsidiaries regarding the termination or
material impairment of any such service. All equipment and fixtures
associated with the Leased Improvements are in good operating condition and
repair (ordinary wear and tear excepted). All necessary easements exist and
are in full force and effect. The Leased Property have access, in accordance
with past practice, to and from a public right of way or road dedicated for
public use and no notice has been received by the Company or its Subsidiaries
relating to the termination or impairment of such access (including
applicable parking requirements).
SECTION 5.22 ENVIRONMENTAL MATTERS.
(a) As used in this Agreement "Hazardous Material" shall mean:
(i) any "hazardous substance" as now defined pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"),
42 U.S.C. Section 9601(14), or any substance listed or identified by any
characteristic in any regulation adopted pursuant to any statute referred to
or incorporated into such definition, all as in effect on the date hereof;
(ii) any petroleum, including crude oil and any fraction thereof;
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(iii) natural gas, natural gas liquids, liquefied natural gas, or synthetic
gas usable for fuel; (iv) any "hazardous chemical" as defined pursuant to
29 C.F.R. Part 1910; and (v) any asbestos, polychlorinated biphenyl ("PCB"),
or isomer of dioxin.
(b) To the Knowledge of the Company, there is no Hazardous
Material within, under, originating from or relating to any real property
interest or other location geologically or hydrologically connected to such
properties owned, operated or controlled by the Company, its Subsidiaries or
their predecessors in interest.
(c) Neither the Company, its Subsidiaries nor any of their
predecessors in interest has any liability, matured or not matured, absolute
or contingent, assessed or unassessed, imposed or based upon any provision
under any federal, state or local law, rule, or regulation or common law, or
under any code, order, decree, judgment or injunction applicable to the
Company, its Subsidiaries or their predecessors in interest, nor has the
Company or its Subsidiaries, during the past five (5) years, received any
notice, or request for information issued, promulgated, approved or entered
thereunder, or under the common law, or any tort, nuisance or absolute
liability theory, relating to public health or safety, or pollution, damage
to or protection of the environment including without limitation, laws
relating to emissions, discharges, releases or threatened releases of
Hazardous Material into the environment (including without limitation,
ambient air, surface water, groundwater, land surface or subsurface), or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, generation, disposal, transport or handling of any
Hazardous Material (hereinafter collectively referred to as "Environmental
Laws").
(d) Each of the Company and its Subsidiaries possesses and is
in compliance in all material respects with all permits, licenses,
certificates, franchises and other authorizations relating to the
Environmental Laws necessary to conduct its business or required by
environmental regulations.
(e) Neither the Company nor its Subsidiaries has, during the
past five (5) years, been subject to any civil, criminal or administrative
action, suit, claim, hearing, notice of violation, investigation, inquiry or
proceeding for failure to comply with, or received notice of any violation or
potential liability under the Environmental Laws, and the Company has no
Knowledge of any information, whether or not confirmed or reported, which
could give rise to any such potential liability.
(f) No real property, site or facility (as defined in CERCLA,
42 U.S.C. Section 9601(9)) owned or operated by the Company or its Subsidiaries
is (i) listed or proposed for listing on the National Priority List or
(ii) listed on the Comprehensive Environmental Response, Compensation,
Liability Information System List ("CERCLIS") promulgated pursuant to CERCLA,
or any comparable list maintained by any state or local government authority.
(g) There are no underground storage tanks owned or operated
by the Company or its Subsidiaries, and any prior use and operation of
underground storage tanks owned or operated by the Company or its
Subsidiaries has been in compliance with all Environmental Laws.
(h) The Company has provided to the Buyer an opportunity to
inspect its facilities, and to review and copy documents, and the Company has
delivered to the Buyer true, complete and correct copies of results of any
reports, together with supporting studies, analyses and tests in the
possession of or initiated by the Company or its Subsidiaries pertaining to
the existence of Hazardous Material and any other environmental concerns
relating to any of their facilities, or sites or real property owned, leased,
operated, used or controlled by the Company, its Subsidiaries or any of their
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predecessors in interest, or concerning compliance with or liability under
the Environmental Laws.
(i) There are no PCBs in or at any premises owned, leased,
operated or controlled by the Company or its Subsidiaries and their prior
use, handling, storage, transport or disposal of PCBs has been in compliance
with all Environmental Laws.
(j) There is no friable asbestos or asbestos containing
materials on or in the properties and assets owned, leased, operated or
controlled by the Company or its Subsidiaries and the facilities on such
properties comply with the Environmental Laws including but not limited to,
Occupational Safety and Health Act regulations with respect to ambient air
exposure to asbestos, the existence of which would have a Material Adverse
Effect on the Company or its Subsidiary.
(k) Neither the Company nor its Subsidiaries has, by contract,
expressly agreed to assume the liability of any other person or entity
pursuant to any of the Environmental Laws.
SECTION 5.23 GOVERNMENTAL AUTHORIZATIONS.
The Company and its Subsidiaries possess all licenses,
franchises, permits, certificates, orders, approvals, exemptions,
registrations or other authorizations (collectively, the "Permits") from
governmental, regulatory or administrative agencies or authorities required
for the ownership of their properties and assets and operation of their
businesses in the manner presently conducted, except where the failure to
possess such Permit would not have a Material Adverse Effect on the Company
or its Subsidiaries (including those required pursuant to laws or regulations
relating to the protection of the environment), each of which will be in full
force and effect on the Closing Date. A list of all material Permits is set
forth on Schedule 5.23. Except as specified in Schedule 5.23, no
registrations, filings, applications, notices, transfers, consents,
approvals, orders, qualifications, waivers or other actions of any kind are
required by virtue of the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby to enable the Company
and its Subsidiaries to continue the possession and operation of their
properties and assets and the businesses of the Company and its Subsidiaries
as presently conducted in all material respects.
SECTION 5.24 EMPLOYEES.
Schedule 5.24 sets forth as of June 30, 1996 a complete and
accurate list of all employees of the Company and its Subsidiaries showing
for each: name, hire date, current job title or description, current salary
level, total compensation for the calendar year 1995 (including any bonus,
commission or other remuneration) and annual bonus for the fiscal year ended
May 26, 1996, and describing any existing contractual arrangement with such
employee. Except as set forth on Schedule 5.24, as of June 30, 1996, none of
the employees of the Company or its Subsidiaries is on short-term or
long-term disability. Except as set forth on Schedule 5.24, since May 28,
1995 no salaried employee of the Company or its Subsidiaries who has been
compensated at an annual base rate in excess of $50,000 has terminated his or
her employment or had such employment terminated for any reason or for no
reason; as of July 18, 1996 no such employee has given notice of his or her
intent to terminate such employment; and no notice of termination has been
given to any such employee by the Company or its Subsidiaries. Except as set
forth on Schedule 5.24, no employees of the Company or its Subsidiaries shall
receive any compensation as a result of the consummation of the transaction
contemplated by this Agreement.
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SECTION 5.25 EMPLOYEE RELATIONS.
Except as set forth on Schedule 5.25, neither the Company nor
its Subsidiaries has at any time during the past five years had, nor is there
now threatened, any labor disputes or any strike, picket, work stoppage, work
slowdowns or other job action due to labor disagreements. Except as set
forth on Schedule 5.25, (a) the Company and its Subsidiaries are in
compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, including
the terms and provisions of any collective bargaining agreement or other
contract with a labor union representing any employees of the Company or its
Subsidiaries and are not engaged in any unfair labor practice; (b) there is
no unfair labor practice charge or complaint against the Company or its
Subsidiaries, or (to the Knowledge of the Company) threatened before the
National Labor Relations Board or any foreign authority; (c) no question
concerning representation has been raised or is (to the Knowledge of the
Company) threatened respecting the employees of the Company or its
Subsidiaries; (d) no grievance that might have a Material Adverse Effect on
the Company or its Subsidiaries, nor any arbitration proceeding arising out
of or under any collective bargaining agreement, is pending and no claims
therefor exist; and (e) no collective bargaining agreement that is binding on
the Company or its Subsidiaries restricts them from relocating, closing or
contracting any of their operations.
SECTION 5.26 CUSTOMERS AND VENDORS.
Schedule 5.26 sets forth correct and complete lists of the
twenty (20) largest (by dollar volume) customers and vendors of the Company
and its Subsidiaries during the fiscal year ended May 26, 1996, indicating
the existing contractual arrangements, if any, with each such customer or
vendor. Except as set forth on Schedule 5.26, there are no outstanding
disputes with any customer or vendor listed thereon and no customer or vendor
listed thereon has refused to continue to do business with the Company and
its Subsidiaries or has stated its intention not to continue to do business
with the Company and its Subsidiaries. Since May 28, 1995, there has not
been any material shortage or unavailability of the raw materials necessary
to manufacture the products sold by the Company and its Subsidiaries and the
Company has no Knowledge of any current shortage or unavailability which
leads it to believe that any such shortages will occur.
SECTION 5.27 DISTRIBUTORS AND REPRESENTATIVES.
Schedule 5.27 sets forth a correct and complete list of the
twenty (20) largest (by dollar volume) distributors, representatives and
agents for the sale of the products of the Company and its Subsidiaries
during the two most recently completed fiscal years and all distributors,
representatives and agents to whom the Company and its Subsidiaries have
given any exclusive rights with respect to territories or products. Since
May 28, 1995, there has been no termination of any independent distributor,
wholesaler, sales representative or agent relationship, nor, to the Knowledge
of the Company, has any present independent distributor, wholesaler, sales
representative or agent indicated any intention to termination or materially
change the terms of its relationship with the Company and its Subsidiaries.
SECTION 5.28 BROKER'S OR FINDER'S FEES.
No agent, broker, investment banker, Person or firm acting on
behalf of the Company or under the authority of the Company is or will be
entitled to any broker's or finder's fee or any other commission or similar
fee directly or indirectly from any of the parties hereto in connection with
any of the transactions contemplated hereby.
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SECTION 5.29 DISCLOSURE.
No representation or warranty by the Company to the Buyer
contained in this Agreement, and no statement contained in the Schedules
hereto or any certificate furnished to the Buyer pursuant to the provisions
hereof, contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make the
statements herein or therein not misleading.
SECTION 5.30 CERTAIN TRANSACTIONS.
Except as set forth on Schedule 5.30, none of the Stockholders
or the directors or officers of the Company or its Subsidiaries is currently
a party to any transaction with the Company or its Subsidiaries (other than
for services as employees, officers and directors), including without
limitation any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from, any such
Person, or to or from any corporation, partnership, trust or other entity in
which any such Person, or a Person who owns or has a beneficial interest in
the Stockholder, owns in excess of five percent (5%) of the outstanding
equity interest.
SECTION 5.31 ABSENCE OF QUESTIONABLE PAYMENTS.
Neither the Company, its Subsidiaries nor any director, officer,
agent, employee or other Person acting on their behalf has (i) used any
corporate or other funds for unlawful contributions, payments, gifts or
entertainment, or made any unlawful expenditures relating to political
activity to government officials or others or established or maintained any
unlawful or unrecorded funds in violation of Section 30A of the Securities
Exchange Act of 1934, as amended, or any other applicable foreign, federal or
state law; or (ii) accepted or received any unlawful contributions, payments,
expenditures or gifts.
SECTION 5.32 DIRECTORS AND OFFICERS; BANK ACCOUNTS.
Schedule 5.32 lists each of the directors and officers and all
of the bank accounts (and signatories thereto) of the Company and its
Subsidiaries.
SECTION 5.33 DEFECTS IN PRODUCTS OR DESIGNS; PRODUCT SAFETY.
(a) Except as set forth on Schedule 5.33, there has been no
pattern of defects in any product line in the design, construction,
manufacturing or installation of any material product ("Product") made,
manufactured, constructed, distributed, sold, leased or installed by the
Company, its Subsidiaries or their employees, or agents, that would adversely
affect the performance or quality of such Product. Each Product has been
designed, manufactured, packaged and labelled in compliance with all
regulatory, engineering, industrial and other codes applicable thereto and
the Company has not received notice of any alleged noncompliance with any
such code. Each Product advertised or represented as being rated or approved
by a rating organization, such as Underwriters' Laboratories, the National
Sanitation Foundation or the Society of Automotive Engineers or other similar
organizations, comply with all conditions of such rating or approval.
(b) Neither the Company nor its Subsidiaries has been required
to file, and has not filed, a notification or other report with the United
States Consumer Product Safety Commission concerning actual or potential
hazards with respect to any Product manufactured or sold by the Company or
its Subsidiaries.
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SECTION 5.34 PRODUCT WARRANTIES.
True and correct copies of all written warranties and guaranties
applicable to the Company, its Subsidiaries and their products and services
have been provided to the Buyer. The amounts reflected as warranty reserves
in the Company Audited Financial Statements and/or Subsidiary Unaudited
Financial Statements are commercially reasonable and have been determined in
accordance with GAAP, consistently applied.
ARTICEL VI
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
The Stockholders severally represent and warrant to the Buyer,
and the Buyer in agreeing to consummate the transactions contemplated by this
Agreement has relied upon such representations and warranties, that:
SECTION 6.1 OWNERSHIP OF STOCK.
Except as set forth on Schedule 6.1, each Stockholder is the
owner, beneficially and of record, of the shares of Stock set forth opposite
his, her or its name on Exhibit A, free and clear of any pledge, lien,
security interest, option, charge, right of first refusal, encumbrance, claim
or equity of any kind. Each Stockholder has, and on the Closing Date each
Stockholder will have, complete and unrestricted power and the unqualified
right to sell, assign, transfer and deliver to the Buyer on the Closing Date,
good, valid and marketable title to the number of shares of Stock set forth
opposite his, her or its name on Exhibit A free and clear of any such pledge,
lien, security interest, option, charge, right of first refusal, encumbrance,
claim or equity of any kind.
SECTION 6.2 Valid and Binding Agreements.
Each Stockholder has the full right, capacity and power to enter
into this Agreement. All necessary action on the part of each Stockholder
has been taken to authorize the execution and delivery of this Agreement and
the Indemnification and Escrow Agreement, the performance of his, her or its
obligations hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby. This Agreement has been, and on the Closing
Date the Indemnification and Escrow Agreement will be, duly and validly
executed and delivered by each of the Stockholders, and constitutes and will
constitute valid and binding obligations, enforceable against such
Stockholder, in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general application
relating to or affecting creditors' rights generally and to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
SECTION 6.3 CONSENTS AND APPROVALS.
Except for any filings under the HSR Act or for the filing of
the Articles of Merger, no permit, consent, approval or authorization of, or
declaration, filing or registration with, any governmental or regulatory
authority or third party is required to be made or obtained by any
Stockholder in connection with the execution, delivery and performance of
this Agreement or the Indemnification and Escrow Agreement or the
consummation of the transactions contemplated hereby or thereby.
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SECTION 6.4 BROKER'S OR FINDER'S FEES.
No agent, broker, investment banker, Person or firm acting on
behalf of any Stockholder or under the authority of any Stockholder is or
will be entitled to any broker's or finder's fee or any other commission or
similar fee directly or indirectly from any of the parties hereto in
connection with any of the transactions contemplated hereby.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF
THE BUYER AND THE GUARANTOR
The Buyer and the Guarantor represent and warrant to the Company
and the Stockholders, and the Company and the Stockholders in agreeing to
consummate the transactions contemplated by this Agreement have relied upon
such representations and warranties, that:
SECTION 7.1 CORPORATE ORGANIZATION.
The Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Illinois and has the
requisite power and authority (corporate and other) to own, lease and operate
its properties and to carry on its business as now being conducted. The
Guarantor is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the requisite power
and authority (corporate and other) to enter into this Agreement and to
perform its obligations hereunder.
SECTION 7.2 VALID AND BINDING AGREEMENTS.
The Buyer has all requisite corporate power and authority to
enter into this Agreement and the Indemnification and Escrow Agreement. All
necessary action on the part of the Buyer and the Guarantor have been taken
to authorize the execution and delivery of this Agreement and the
Indemnification and Escrow Agreement, the performance of their respective
obligations hereunder and thereunder and the consummation of the transaction
contemplated hereby and thereby. This Agreement has been, and as of the
Closing Date, the Indemnification and Escrow Agreement will be, duly and
validly executed and delivered by the Buyer and the Guarantor, and will
constitute valid and binding agreements of the Buyer and the Guarantor,
enforceable in accordance with their respective terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general application
relating to or affecting creditors' rights generally and to general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
SECTION 7.3 NO VIOLATION.
Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby or thereby nor
compliance by the Buyer and the Guarantor with any of the provisions hereof
or thereof will (i) violate or conflict with any provision of the articles or
certificate of incorporation or by-laws of the Buyer or the Guarantor or any
statute, code, ordinance, rule, regulation, judgment, order, writ, decree or
injunction applicable to the Buyer or the Guarantor, or (ii) violate or
conflict with, or result in a breach of any provision of, or constitute a
default (or any event which, with or without due notice or lapse of time, or
both, would constitute a
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default) under, or result in the termination of, or accelerate the performance
required by any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease, agreement or other
instrument of the Buyer or the Guarantor.
SECTION 7.4 CONSENTS AND APPROVALS.
Except for any filings required under the HSR Act or the filing
of the Articles of Merger, no permit, consent, approval or authorization of,
or declaration, filing or registration with, any governmental or regulatory
authority or third party is required to be made or obtained by the Buyer or
the Guarantor in connection with the execution, delivery and performance of
this Agreement or the Indemnification and Escrow Agreement or the
consummation of the transactions contemplated hereby or thereby, other than
lender consents which will be obtained prior to the Closing.
SECTION 7.5 BROKER'S OR FINDER'S FEES.
Except as disclosed on Schedule 7.5, no agent, broker,
investment banker, Person or firm acting on behalf of the Buyer or the
Guarantor, or under the authority of the Buyer or the Guarantor, is or will
be entitled to any broker's or finder's fee or any other commission or
similar fee directly or indirectly from the Buyer or the Guarantor in
connection with any of the transactions contemplated hereby.
ARTICLE VIII
COVENANTS
SECTION 8.1 COMPLIANCE WITH LAW.
From the date hereof through the Closing Date, the Company and
its Subsidiaries will promptly comply in all material respects with all laws
and regulations (including without limitation, those relating to the
protection of the environment and employee benefits) applicable to the
Company's and its Subsidiaries' business and all laws and regulations with
which compliance is required for the valid consummation of the transactions
contemplated hereby and will promptly notify the Buyer of any legal,
administrative or other proceedings, investigations, inquiries, complaints,
notices of violation or other asserted claims, judgments, injunctions or
restrictions, pending, outstanding or, to the Knowledge of the Company,
threatened or contemplated, which could have a Material Adverse Effect on the
Company or its Subsidiaries.
SECTION 8.2 OPERATION OF BUSINESS PRIOR TO CLOSING.
During the period from the date hereof through the Closing Date,
the Company agrees that (except as expressly contemplated or permitted by
this Agreement (including the Schedules hereto) or to the extent that the
Buyer shall otherwise consent in writing):
(a) Each of the Company and its Subsidiaries shall carry on its
business in the usual, regular and ordinary course in substantially the same
manner as heretofore conducted and shall use all reasonable efforts to
preserve intact its present business organization, keep available the
services of its present officers and employees and preserve its relationships
with customers, suppliers and others having business dealings with it to the
end that its goodwill and ongoing business shall not be impaired in any
material respect at the Closing Date.
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(b) Except for bonuses expensed prior to May 26, 1996 and
disbursed prior to Closing, neither the Company nor its Subsidiaries shall
grant any general increase in the compensation payable or to become payable
to their officers or employees (including any such increase pursuant to any
bonus, pension, profit-sharing or other plan or commitment) or any special
increase in the compensation payable or to become payable to any officer or
employee, except for normal bonuses, severances, merit and cost of living
increases in the ordinary course of business and in accordance with past
practice.
(c) Neither the Company nor its Subsidiaries shall settle or
compromise any material claims or litigation or, except in the ordinary and
usual course of business, modify, amend or terminate any of its material
contracts or cancel any debts or waive any claims or rights of substantial
value.
(d) Neither the Company nor its Subsidiaries shall permit any
material insurance policy to be canceled or terminated without notice to the
Buyer, except in the ordinary course of business.
(e) Neither the Company nor its Subsidiaries shall fail to
confer on a regular and frequent basis with one or more representatives of
the Buyer to report material operational matters and the general status of
ongoing operations.
(f) Neither the Company nor its Subsidiaries shall, except in
the ordinary course of business, (i) factor, discount or otherwise accept
less than full payment with regard to its accounts receivable or other
amounts due, (ii) delay payment on, or otherwise alter the payment terms of,
its accounts payable or pay the amounts due thereunder later than the stated
date for payment thereof or (iii) sell any inventory at less than fair market
value or make any bulk sale of such inventory, or fail to maintain its
accounts receivable and inventory at ordinary, customary levels, consistent
with the Company Audited Financial Statements, the Subsidiary Unaudited
Financial Statements and past practice.
(g) Neither the Company nor its Subsidiaries shall, except as
expressly permitted by this Agreement, take any action that would or is
reasonably likely to result in any of its representations and warranties set
forth in this Agreement being untrue in any material respect, or in any of
the conditions in this Agreement set forth in Article IX not being satisfied.
(h) Neither the Company nor its Subsidiaries shall make any
tax election or settle or compromise any material federal, state, local or
foreign income tax liability.
(i) Neither the Company nor its Subsidiaries shall (i) declare
or pay any dividends on or make other distributions in respect of any of
its capital stock, (ii) split, combine or reclassify any of its capital stock
or issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock or
(iii) repurchase or otherwise acquire any shares of its capital stock.
(j) No liens, encumbrances, obligations or liabilities relating
to the Company or its Subsidiaries, whether absolute or contingent (including
litigation claims), shall be discharged, satisfied or paid, other than
liabilities shown on the Company Audited Financial Statements or the
Subsidiary Unaudited Financial Statements and liabilities incurred after the
date thereof in the ordinary course of business and in normal amounts, and no
such discharge, satisfaction or payment shall be effected other than in
accordance with the ordinary payment terms relating to the liability
discharged, satisfied or paid.
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(k) Neither the Company nor its Subsidiaries shall make any
change in any method of accounting or accounting principle or practice.
SECTION 8.3 ACCESS.
At all times prior to the Closing Date, the Company shall
provide the Buyer and its representatives with full access to, and will make
available for inspection and review, all properties, personnel, books,
records and accounts of the Company and its Subsidiaries in order that the
Buyer may have full opportunity to make such investigation as each shall
desire to make of the affairs of the Company and its Subsidiaries. It is
understood that the Buyer shall be permitted to maintain personnel on the
premises of the Company and its Subsidiaries during customary business hours
to observe all aspects of the operations of the Company and its Subsidiaries
and to confer with their management, attorneys and other third parties
reasonably requested for verification of any information obtained pursuant to
such observations. The Company also consents to the examination of
workpapers and other records of its accountants pertaining to the Company and
its Subsidiaries and will cooperate with the Buyer to obtain such access and
related information from its accountants.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
BUYER AND THE GUARANTOR
All obligations of the Buyer that are to be discharged under
this Agreement at the Closing are subject to the Company's and the
Stockholders' fulfillment, at the Closing or effective as of the Closing
Date, of each of the following conditions (unless expressly waived in writing
by the Buyer at any time at or prior to the Closing) and the Company and the
Stockholders shall use their reasonable efforts to cause each of such
conditions to be satisfied:
SECTION 9.1 REPRESENTATIONS AND WARRANTIES.
On the Closing Date, the representations and warranties of the
Company and the Stockholders set forth in Articles V and VI of this Agreement
shall be true and correct in all material respects as though such
representations and warranties had been made by the Company and the
Stockholders on and as of the Closing Date and the Buyer shall have received
at the Closing a certificate, dated the Closing Date, signed by the President
or a Vice President of the Company and each Stockholder to such effect.
SECTION 9.2 COVENANTS, AGREEMENTS AND CONDITIONS.
The Company and the Stockholders shall have performed and
complied in all material respects with all covenants, agreements and
conditions contained in this Agreement required to be performed by the
Company and the Stockholders on or prior to the Closing Date, and the Buyer
shall have received at the Closing a certificate, dated the Closing Date,
signed by the President or a Vice President of the Company and each
Stockholder to such effect.
SECTION 9.3 PROCEEDINGS.
No action or proceeding shall be pending or threatened to
restrain or prevent the consummation of the transactions contemplated hereby.
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SECTION 9.4 CORPORATE PROCEEDINGS.
All corporate and other proceedings of the Company and the
Stockholders to be taken and all consents to be obtained in connection with
the transactions contemplated by this Agreement and all documents incident
thereto shall be reasonably satisfactory in form and substance to the Buyer
and its counsel, Dickstein Shapiro, Morin & Oshinsky L.L.P., both of whom
shall have received all such originals or certified or other copies of such
documents as either may reasonably request.
SECTION 9.5 GOVERNMENTAL APPROVALS.
There shall have been received all necessary governmental
consents or authorizations required in connection with the transactions
contemplated hereby.
SECTION 9.6 NO MATERIAL ADVERSE EFFECT.
During the period from the date hereof through the Closing Date,
there shall not have occurred any Material Adverse Effect on the Company.
SECTION 9.7 INSURANCE.
The Company shall have maintained in full force and effect the
insurance coverage described on Schedule 5.17 hereto or policies providing
substantially equivalent coverage.
SECTION 9.8 DELIVERIES.
The Sellers shall have delivered to the Buyer the following
items:
(a) certificates representing the shares of Stock, duly
endorsed or accompanied by stock powers duly executed in blank (with
signatures guaranteed by any national bank or trust company) and otherwise in
form acceptable for transfer on the books of the Company, with all requisite
stock transfer tax stamps attached;
(b) the stock books, stock ledgers, minute books and corporate
seal of the Company and its Subsidiaries;
(c) certificates from appropriate authorities, dated as of or
about the Closing Date, as to the good standing, qualification to do
business, and payment of franchise taxes by the Company and its Subsidiaries
in each jurisdiction where they are so qualified;
(d) the resignation of each director and officer of the Company
and its Subsidiaries, as requested by the Buyer;
(e) (i) a certificate of the Secretary or Assistant Secretary
of the Company, certifying as to the Articles of Incorporation, By-laws,
resolutions of the Board of Directors, and incumbency and signatures of
officers of the Company; and (ii) a certificate of the Secretary or Assistant
Secretary of each Subsidiary of the Company, certifying as to the Articles of
Incorporation and By-laws of such Subsidiary; and
(f) all other previously undelivered items required to be
delivered by the Company or the Stockholders to the Buyer at or prior to the
Closing pursuant to this Agreement (including all items referred to in
Article IV) or otherwise required in connection herewith unless waived in
writing by the Buyer.
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SECTION 9.9 HSR ACT REQUIREMENTS.
Any "waiting period" under the HSR Act applicable to the
transactions contemplated hereby shall have expired by the Closing Date or
shall have been terminated by the appropriate agency.
SECTION 9.10 OPINION OF COUNSEL.
The Buyer shall have received a written opinion dated as of the
Closing Date from Rudnick & Wolfe, counsel to the Company, in the form
attached hereto as Exhibit H.
SECTION 9.11 TAX STATUS CERTIFICATION.
The Buyer shall have received a certification, signed by an
authorized officer of the Company and dated within fifteen (15) days of
Closing, pursuant to Section 1445(b) of the Code and Treasury Regulation
Section 1.897-2 to the effect that the Company is not a "United States real
property holding corporation" as defined in Section 897 of the Code.
SECTION 9.12 PAYMENT OF INDEBTEDNESS.
The Buyer shall have received evidence of repayment of all
indebtedness, including any outstanding principal and interest, for borrowed
money of each of the Stockholders or their Affiliates owed to the Company or
its Subsidiaries as of the Closing Date.
SECTION 9.13 EVIDENCE OF TERMINATION.
The Buyer shall have received satisfactory evidence of the
termination of the agreements referred to in Section 4.6, including the
release of the Company's guaranty obligations relating to the financing of
the Leased Real Property.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF THE
COMPANY AND THE STOCKHOLDERS
All obligations of the Company and the Stockholders that are to
be discharged under this Agreement at the Closing are subject to the Buyer's
fulfillment at the Closing or effective as of the Closing Date of each of the
following conditions (unless expressly waived in writing by the Company at
any time at or prior to the Closing) and the Buyer shall use its reasonable
efforts to cause each of such conditions to be satisfied:
SECTION 10.1 REPRESENTATIONS AND WARRANTIES.
On the Closing Date, the representations and warranties of the
Buyer and the Guarantor set forth in Article VII of this Agreement shall be
true and correct in all material respects as though such representations and
warranties had been made on and as of the Closing Date, and the Company and
the Stockholders shall have received at the Closing a certificate, dated the
Closing Date, signed by the President or a Vice President of each of the
Buyer and the Guarantor to such effect.
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SECTION 10.2 COVENANTS, AGREEMENTS AND CONDITIONS.
The Buyer shall have performed and complied in all material
respects with all covenants, agreements and conditions contained in this
Agreement required to be performed by it on or prior to the Closing Date, and
the Company and the Stockholders shall have received at the Closing a
certificate, dated the Closing Date, signed by the President or a Vice
President of the Buyer to such effect.
SECTION 10.3 PROCEDDINGS.
No action or proceeding shall be pending or threatened to
restrain or prevent the consummation of the transactions contemplated hereby.
SECTION 10.4 CORPORATE PROCEEDINGS.
All corporate and other proceedings of the Buyer and the
Guarantor to be taken and all consents to be obtained in connection with the
transactions contemplated by this Agreement and all documents incident
thereto shall be reasonably satisfactory in form and substance to the Company
and the Stockholders and their counsel, Rudnick & Wolfe, each of whom shall
have received all such originals or certified or other copies of such
documents as either may reasonably request.
SECTION 10.5 GOVERNMENTAL APPROVALS.
There shall have been received all necessary governmental
consents or authorizations required in connection with the transactions
contemplated hereby.
SECTION 10.6 DELIVERIES.
The Buyer shall have delivered to the Company and the
Stockholders the following items:
(a) the payments as required by Section 3.2;
(b) a certificate of the Secretary or Assistant Secretary of
the Buyer, certifying as to the Articles of Incorporation, By-laws,
resolutions of the Board of Directors, and incumbency and signatures of
officers of the Buyer;
(c) a certificate of the Secretary or Assistant Secretary of
the Guarantor, certifying as to the Certificate of Incorporation, By-laws,
resolutions of the Board of Directors, and incumbency and signatures of
officers of the Guarantor; and
(d) all other previously undelivered items required to be
delivered by the Buyer and the Guarantor at or prior to the Closing pursuant
to this Agreement (including the items listed in Article IV) or otherwise
required in connection herewith unless waived in writing by the Company and
the Stockholders.
SECTION 10.7 HSR ACT REQUIREMENTS.
Any "waiting period" under the HSR Act applicable to the
transactions contemplated hereby shall have expired by the Closing Date or
shall have been terminated by the appropriate agency.
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SECTION 10.8 OPINION OF COUNSEL.
The Company and the Stockholders shall have received a written
opinion dated as of the Closing Date from Dickstein Shapiro, Morin & Oshinsky
L.L.P., counsel to the Buyer, in the form attached hereto as Exhibit I.
ARTICLE XI
OTHER MATTERS
SECTION 11.1 CONFIDENTIALITY.
The Stockholders agree that, except in the ordinary course of
business of the Company, at all times from and after the Closing Date, they
shall keep secret and retain in strictest confidence, and shall not use for
their benefit or for the benefit of others, confidential information with
respect to the Company, including but not limited to, "know-how," trade
secrets, customer lists, details of client or consultant contracts, pricing
policies, operational methods, marketing plans or strategies, product
development techniques or plans other than any of the foregoing which are in
the public domain (except through conduct of any such Stockholder which
violates this Section 11.1 or the Employment and Noncompetition Agreement)
prior to any disclosure by such Stockholder; provided, however, that the
Stockholders may make such disclosures as are required by an order of a court
having jurisdiction over the Stockholder if the Stockholder has made
reasonable efforts to permit the Surviving Corporation to challenge such
order or obtain an appropriate protective order or confidential treatment of
such matters.
SECTION 11.2 FURTHER ASSURANCES.
Each party hereto shall cooperate with the others, and execute
and deliver, or cause to be executed and delivered, all such other
instruments, including instruments of conveyance, assignment and transfer,
and take all such other actions as may be reasonably requested by the other
parties hereto from time to time, consistent with the terms of this
Agreement, to effectuate the purposes and provisions of this Agreement.
ARTICLE XII
TERMINATION
SECTION 12.1 METHODS OF TERMINATION.
This Agreement may be terminated at any time prior to the
Closing:
(a) by the mutual consent of the Buyer and the Company;
(b) by the Buyer at any time after the date which is thirty
(30) days from the date of this Agreement if any of the conditions provided
for in Article IX of this Agreement shall not have been met prior to such
date;
(c) by the Company at any time after the date which is thirty
(30) days from the date of this Agreement if any of the conditions provided
for in Article X of this Agreement shall not have been met prior to such
date; or
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(d) at any time prior to the Effective Time by either the
Buyer or the Company if the Merger shall not have been consummated by August 31,
1996.
SECTION 12.2 PROCEDURE UPON TERMINATION.
In the event of termination by the Buyer, the Company, or both,
pursuant to this Article XII, written notice thereof shall promptly be given
to the other party or parties and the obligations of the Buyer and the
Sellers under this Agreement shall, except as set forth below, terminate
without further action. Upon any such termination:
(a) each party will redeliver all documents, workpapers and
other materials of the other party or parties relating to the transactions
contemplated hereby, whether obtained before or after the execution hereof,
to the party or parties furnishing the same;
(b) each party hereto and his, her or its respective
accountants, attorneys, employees and other agents, will keep confidential
all information, oral and written, obtained from any other party hereto or
its Affiliates and refrain from using in any manner all information set forth
above not otherwise publicly available; and
(c) no party shall have any liability or further obligation to
any other party, except for such legal and equitable rights and remedies as
any party may have under this Agreement or otherwise, by reason of any breach
or violation of this Agreement by the other party.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
All representations and warranties of the Buyer and the Company
and the Stockholders contained in Articles V, VI and VII herein and in any
certificate executed and delivered by either the Buyer or the Company or the
Stockholders in connection with this Agreement shall survive the Closing Date
and shall terminate and expire sixteen (16) months thereafter; provided,
however, that the representations and warranties contained in Sections
5.5(c), 5.10, 5.11, 5.22, 5.28, 6.1, 6.4 and 7.5 shall survive the Closing
Date and terminate and expire at the end of the relevant statute of
limitations. All agreements of the parties contemplating performance after
the Closing Date shall survive the Closing Date for a period equal to ninety
(90) days after the expiration of the applicable statute of limitations for
any claim relating thereto.
SECTION 13.2 SERVICE OF PROCESS.
Service of process on any of the Buyer, the Company or the
Stockholders for any claim, legal action or proceeding under this Agreement
may be made in the manner set forth in Section 13.3.
SECTION 13.3 NOTICES.
All notices, requests, consents and other communications
hereunder shall be deemed given if delivered personally (including by
courier), telecopied (which is confirmed) or mailed by United States
registered or certified mail (return receipt requested) to the parties at the
following addresses or to other such addresses as may be furnished in writing
by one party to the others:
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(a) if to the Company (prior to Closing):
Mid-West Automation Enterprises, Inc.
1400 Busch Parkway
Buffalo Grove, IL 60089
Attention: Robert Eitzinger
with a copy to:
Rudnick & Wolfe
203 North LaSalle Street
Suite 1800
Chicago, IL 60601
Attention: Allen J. Ginsburg, Esquire
(b) if to the Stockholders
(after the Closing):
c/o Mr. Robert Eitzinger
3675 Cuba Road
Long Grove, IL 60047
with a copy to:
Rudnick & Wolfe
203 North LaSalle Street
Suite 1800
Chicago, IL 60601
Attention: Allen J. Ginsburg, Esquire
(c) if to the Buyer or to the Surviving Corporation:
c/o DT Industries, Inc.
Corporate Center, Suite 2-300
1949 East Sunshine
Springfield, Missouri 65804
Attention: Chief Executive Officer
with a copy to:
Dickstein Shapiro Morin & Oshinsky L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
Attention: Ira H. Polon, Esq.
Any notice given by person delivered personally shall be deemed effective
upon receipt; any notice delivered by telecopier shall be deemed effective
upon confirmed receipt if a confirming copy is sent by mail as provided
above; and any notice delivered by mail as provided above shall be deemed
effective three (3) business days after mailing.
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SECTION 13.4 GOVERNING LAW.
This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Illinois, without regard to such
jurisdiction's conflicts of law principles. The parties agree that venue or
any suit, action, proceeding or litigation arising out of or in relation to
this Agreement shall be in any federal or state court in the State of
Illinois having subject matter jurisdiction.
SECTION 13.5 MODIFICATINO; WAIVER.
This Agreement shall not be altered or otherwise amended except
pursuant to an instrument in writing signed by the Buyer, the Company and the
Stockholders. Any party may waive any misrepresentation by any other party,
or any breach of warranty by, or failure to perform any covenant, obligation
or agreement of, any other party, provided that mere inaction or failure to
exercise any right, remedy or option under this Agreement, or delaying in
exercising the same, will not operate as nor shall be construed as a waiver,
and no waiver will be effective unless set forth in writing and only to the
extent specifically stated therein.
SECTION 13.6 ENTIRE AGREEMENT.
This Agreement, the schedules and exhibits hereto, and any other
agreements or certificates delivered pursuant hereto constitute the entire
agreement of the parties hereto with respect to the matters contemplated
hereby and supersede all previous written or oral negotiations, commitments,
representations and agreements.
SECTION 13.7 ASSIGNMENT; SUCCESSORS AND ASSIGNS.
This Agreement may not be assigned by the Company or the
Stockholder without the prior written consent of the Buyer. Prior to the
Closing Date, this Agreement may not be assigned by the Buyer without the
prior written consent of the Company. After the Closing, the Surviving
Corporation may assign this Agreement. Notwithstanding the foregoing, the
Buyer and the Guarantor shall be entitled to assign their respective rights
under this Agreement, before and after the Closing, to their senior lenders,
including The Boatmen's National Bank, N.A., as Agent, and their respective
successors and assigns. All covenants, representations, warranties and
agreements of the parties contained herein shall be binding upon, inure to
the benefit of and be enforceable by their respective successors and
permitted assigns.
SECTION 13.8 PUBLIC ANNOUNCEMENTS.
Prior to the Closing, no public announcement of the transactions
contemplated hereby or of the terms hereof shall be made by the parties to
this Agreement without the written consent, such consent not to be
unreasonably withheld or delayed, of the Buyer and the Company, except to the
extent required by law. The mutually approved public announcement in the
form attached as Exhibit J shall be issued after the close of trading on the
Nasdaq National Market System on the Closing Date and prior to the
commencement of trading on the next business day.
SECTION 13.9 SEVERABILITY.
The provisions of this Agreement are severable, and in the event
that any one or more provisions are deemed illegal or unenforceable, the
remaining provisions shall remain in full force and effect.
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<PAGE>
SECTION 13.10 NO THIRD PARTY BENEFICIARY.
This Agreement is intended and agreed to be solely for the
benefit of the parties hereto and their stockholders, and no other party
shall accrue any benefit, claim or right of any kind whatsoever pursuant to,
under, by or through this Agreement.
SECTION 13.11 EXPENSES.
Except as otherwise expressly provided herein, each party to
this Agreement will pay his, her or its own expenses in connection with the
negotiation of this Agreement, the performance of its obligations hereunder,
and the consummation of the transactions contemplated herein. Buyer will pay
the fee of Chambers and Associates in connection with the transaction
contemplated herein. Any Expenses incurred by the Company, including any
expenses of the Stockholders billed to the Company, shall be paid by the
Stockholders prior to or at the Closing.
SECTION 13.12 ACTIONS BY THE STOCKHOLDERS.
All actions required or permitted to be taken by the
Stockholders under this Agreement (including giving, receiving and making all
accountings, reports, notices, consents, waivers and amendments) shall be
made or taken by the holders of the majority of the outstanding stock of the
Company on the date hereof and any action taken by such majority Stockholders
hereunder shall be binding upon all of the Stockholders and any Person
dealing with such Stockholder or Stockholders shall be entitled to rely on
any action, notice, consent, election, certificate or other document or
instrument as if received from all of the Stockholders.
SECTION 13.13 EXECUTION IN COUNTERPART.
This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which shall constitute one
and the same instrument.
[The balance of this page has been intentionally left blank.]
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement and
Plan of Merger as of the date first written above.
AUTOMATION ACQUISITION
CORPORATION
By: /s/ Stephen J. Gore
----------------------------------
Stephen J. Gore
Chief Executive Officer
MID-WEST AUTOMATION ENTERPRISES,
INC.
By: /s/ Robert Eitzinger
----------------------------------
Robert Eitzinger
President
STOCKHOLDERS:
RGA ASSOCIATES, an Illinois limited
partnership
By: RGA Associates, Inc., general
partner
By: /s/ Robert Eitzinger
-----------------------------
Robert Eitzinger, President
/s/ Gisela Eitzinger
--------------------------------------
Gisela Eitzinger, as co-Trustee
under Robert Eitzinger Trust No. 1
dated January 5, 1989, and
/s/ Kenneth R. Vernon
--------------------------------------
Kenneth R. Vernon, as co-Trustee
under Robert Eitzinger Trust No. 1
dated January 5, 1989
<PAGE>
The undersigned hereby unconditionally guarantees the full and punctual
payment and performance of all of the obligations of the Buyer to the
Stockholders arising under this Agreement. The liability of the undersigned
hereunder shall be primary, and in any right of action which shall accrue to
the Stockholders under this Agreement, the Stockholders may at their option,
proceed against the undersigned without having commenced any action, or
having obtained any judgment, against the Buyer.
DT INDUSTRIES, INC., as Guarantor
By: /s/ Stephen J. Gore
--------------------------------------
Stephen J. Gore
President and Chief Executive Officer
<PAGE>
NOTE
The following page contains a list of Exhibits and Schedules which have
been intentionally omitted by the Registrant pursuant to Item 601(b)(2) of
Regulation S-K.
A copy of any omitted Exhibit or Schedule will be provided to the
Securities and Exchange Commission upon request.
<PAGE>
Exhibit A Stockholders
Exhibit B Form of Indemnification and Escrow Agreement
Exhibit C Calculation of Key Employee Bonus
Exhibit D Form of Articles of Merger
Exhibit E Form of Stockholder Release
Exhibit E-1 Form of Release from Robert Eitzinger
Exhibit F Form of Building Lease
Exhibit F-1 Form of Parking Lot Lease
Exhibit G Form of Employment and Noncompetition Agreement
Exhibit H Form of Opinion of Rudnick & Wolfe
Exhibit I Form of Opinion of Dickstein Shapiro Morin & Oshinsky L.L.P.
Exhibit J Form of Press Release
Schedule 1 Persons with Knowledge
Schedule 5.1 Foreign Qualifications
Schedule 5.5 Capitalization
Schedule 5.6 Subsidiaries and Affiliates
Schedule 5.7 Company Audited Financial Statements
Schedule 5.7A Subsidiary Unaudited Financial Statements
Schedule 5.7B Year End Adjustments and Exceptions to Subsidiary Unaudited
Financial Statements
Schedule 5.7C Company Cash Receipts and Disbursements
Schedule 5.8 Liabilities and Obligations
Schedule 5.9 Changes During Interim Operations
Schedule 5.10 Tax Matters
Schedule 5.11 Employee Benefit Plans
Schedule 5.13 Litigation; Claims
Schedule 5.14 Contracts and Commitments
Schedule 5.15 Intellectual Property Rights
Schedule 5.16 Liens
Schedule 5.17 Insurance
Schedule 5.19 Inventories and Backlog
Schedule 5.20 Locations Tangible Personal Property Owned
Schedule 5.20A Tangible Personal Property Leased
Schedule 5.21 Real Property Leased
Schedule 5.23 Governmental Authorizations
Schedule 5.24 Employees
Schedule 5.25 Employee Relations
Schedule 5.26 Customers and Vendors
Schedule 5.27 Distributors and Representatives
Schedule 5.30 Certain Transactions
Schedule 5.32 Directors and Officers; Bank Accounts
Schedule 5.33 Defects in Products or Designs
Schedule 6.1 Encumbrances on Stock
Schedule 7.5 Broker's or Finder's Fees
INDEMNIFICATION AND ESCROW AGREEMENT
THIS INDEMNIFICATION AND ESCROW AGREEMENT, dated as of July 19,
1996 (the "Agreement"), by and among Mid-West Automation Enterprises, Inc.,
an Illinois corporation (the "Company"), the stockholders of the Company
listed on Exhibit A attached hereto (the "Stockholders"), and LaSalle
National Trust, N.A., as Escrow Agent ("Escrow Agent").
WHEREAS, Automation Acquisition Corporation, an Illinois
corporation ("AAC"), the Company and the Stockholders have entered into an
Agreement and Plan of Merger (the "Merger Agreement") providing for the
merger of AAC with and into the Company (the "Merger") (the Company, as the
surviving corporation in the Merger, sometimes referred to herein as the
"Surviving Corporation");
WHEREAS, Section 3.2(b) of the Merger Agreement provides for the
delivery of a sum equal to Five Million Dollars ($5,000,000) (the "Escrow
Amount") to the Escrow Agent at the Closing of the Merger, such Escrow Amount
to be delivered to and maintained by the Escrow Agent in accordance with the
terms of this Agreement; and
WHEREAS, the parties hereto desire to provide for indemnification
for breaches of representations, warranties and covenants and for certain
other matters under the Merger Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants contained herein, the parties hereto agree as follows:
1. DEFINITIONS.
Capitalized terms not otherwise defined herein shall have the
meanings ascribed to such terms in the Merger Agreement.
2. INDEMNIFICATION.
(a) Subject to the limitations hereinafter set forth in this
Section 2, from and after the Effective Time, the Stockholders shall, jointly
and severally, protect, defend, hold harmless and indemnify the Surviving
Corporation, its officers, directors, stockholders, employees and agents, and
their respective successors and assigns from, against and in respect of any
and all losses, liabilities, deficiencies, penalties, fines, costs, damages
and expenses whatsoever (including without limitation, reasonable
professional fees and costs of investigation, litigation, settlement and
judgment and interest) (collectively, the "Losses") that may be suffered or
incurred by any of them arising from or by reason of any of the following:
(i) Any breach of any of the representations or warranties
made by the Company in Sections 5.5(c), 5.7(d), 5.11(h) or 5.28 of the Merger
Agreement or by the Stockholders in Section 6.1 or 6.4 of the Merger
Agreement;
<PAGE>
(ii) Any breach of any representation or warranty made by
the Company or the Stockholders in the Merger Agreement (other than in
Sections 5.5(c), 5.7(d), 5.11(h), 5.28, 6.1 and 6.4 or in Section 5.10 to the
extent such breach relates to a taxable period, or portion thereof beginning
after May 28, 1995) or contained in any certificate executed by the Company
or the Stockholders and delivered to AAC in connection with the Merger;
(iii) Any breach of any covenant or agreement made by the
Company in the Merger Agreement to the extent such breach occurred on or
prior to the Closing Date;
(iv) Any breach of any covenant or agreement made by the
Stockholders in the Merger Agreement, this Agreement or any other document or
agreement executed by the Stockholders and delivered to AAC in connection
with the Merger;
(v) Any liabilities for Taxes (other than sales or use
Taxes) attributable to the operations of the Company for taxable periods, or
portions thereof, prior to and including the fiscal year ended May 28, 1995,
except to the extent such liabilities result in reductions of Taxes
attributable to later periods or to the extent such liabilities are caused by
an accounting change required by the Buyer and excluding from any such Losses
any costs and expenses incurred in connection with any routine audit of the
Company by a Taxing Authority prior to any assertion by such Taxing Authority
that additional Taxes are due in relation to such periods;
(vi) Any liabilities for sales or use Taxes attributable to
the operations of the Company prior to and including the Closing Date; and
(vii) Any and all costs and expenses (including without
limitation reasonable legal fees) incident to the enforcement of the
provisions of this Section 2.
(b) Subject to the limitations hereinafter set forth in this
Section 2, from and after the Effective Time, the Surviving Corporation shall
protect, defend, hold harmless and indemnify the Stockholders, their
respective personal or legal representatives, and their respective successors
and assigns from, against and in respect of any and all Losses that may be
suffered or incurred by any of them arising from or by reason of any of the
following:
(i) Any breach of any representation, warranty, covenant or
agreement made by AAC in the Merger Agreement or contained in any certificate
executed by AAC and delivered to the Company or the Stockholders in
connection with the Merger Agreement;
(ii) Any claims of any broker, investment banker, Person or
firm acting on behalf of AAC or its Affiliates for a broker's or finder's fee
or any other commission or similar fee arising in connection with the
transactions contemplated by the Merger Agreement; and
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<PAGE>
(iii) Any and all costs and expenses (including without
limitation, reasonable legal fees) incident to the enforcement of the
provisions of this Section 2.
(c) INDEMNIFICATION PROCEDURES. All claims for indemnification
under this Agreement shall be asserted and resolved as follows:
(i) A party claiming indemnification under this Agreement
(an "Indemnified Party") shall promptly (i) notify the party from whom
indemnification is sought (the "Indemnifying Party") of any third-party claim
or claims ("Third Party Claim") asserted against the Indemnified Party which
could give rise to a right of indemnification under this Agreement and
(ii) transmit to the Indemnifying Party with a copy to the Escrow Agent, a
written notice ("Claim Notice") describing in reasonable detail the nature of
the Third Party Claim, a copy of all papers served with respect to such claim
(if any), an estimate of the amount of damages attributable to the Third
Party Claim, if reasonably possible, and the basis of the Indemnified Party's
request for indemnification under this Agreement.
(ii) Within ten (10) days after receipt of any Claim Notice
(the "Election Period"), the Indemnifying Party shall notify the Indemnified
Party (i) whether the Indemnifying Party disputes its potential liability to
the Indemnified Party under this Agreement with respect to such Third Party
Claim and (ii) whether the Indemnifying Party desires, at the sole cost and
expense of the Indemnifying Party, to defend the Indemnified Party against
such Third Party Claim.
(iii) If the Indemnifying Party notifies the Indemnified
Party within the Election Period that the Indemnifying Party does not dispute
its potential liability to the Indemnified Party under this Agreement and
that the Indemnifying Party elects to assume the defense of the Third Party
Claim, then the Indemnifying Party shall have the right to defend, at its
sole cost and expense, such Third Party Claim by all appropriate proceedings,
which proceedings shall be prosecuted diligently by the Indemnifying Party to
a final conclusion or settled at the discretion of the Indemnifying Party in
accordance with this Section 2(c). The Indemnifying Party shall have full
control of such defense and proceedings including any compromise or
settlement thereof; provided, however, that any such compromise or settlement
involving non-monetary obligations of the Indemnified Party, or otherwise
having a direct effect upon its continuing operations, shall be subject to
the consent of the Indemnified Party. The Indemnified Party is hereby
authorized, at the sole cost and expense of the Indemnifying Party (but only
if the Indemnified Party is actually entitled to indemnification hereunder or
if the Indemnifying Party assumes the defense with respect to the Third Party
Claim), to file, during the Election Period, any motion, answer or other
pleadings which the Indemnified Party shall deem necessary or appropriate to
protect its interests or those of the Indemnifying Party and which are not
unnecessarily prejudicial to the Indemnifying Party. If requested by the
Indemnifying Party, the Indemnified Party shall, at the sole cost and expense
of the Indemnifying Party, cooperate with the Indemnifying Party and its
counsel in contesting any Third Party Claim which the Indemnifying Party
elects to contest, including, without limitation, the making of any related
counterclaim against the Person asserting the Third Party Claim or any
cross-complaint against any Person. The Indemnified Party may participate
in, but not control, any defense or settlement of any
3
<PAGE>
Third Party Claim controlled by the Indemnifying Party pursuant to this
Section 2(c) and, except as permitted pursuant to this Section 2(c), shall bear
its own costs and expenses with respect to such participation.
(iv) If the Indemnifying Party fails to notify the
Indemnified Party within the Election Period that the Indemnifying Party
elects to defend the Indemnified Party pursuant to this Section 2(c), or if
the Indemnifying Party elects to defend the Indemnified Party pursuant to
Section 2(c) but fails to diligently and promptly prosecute or settle the
Third Party Claim, then the Indemnified Party shall have the right to defend,
at the sole cost and expense of the Indemnifying Party, the Third Party
Claim. The Indemnified Party shall have full control of such defense and
proceedings; provided, however, that the Indemnified Party may not enter
into, without the Indemnifying Party's consent, which shall not be
unreasonably withheld or delayed, any compromise or settlement of such Third
Party Claim. The Indemnifying Party may participate in, but not control, any
defense or settlement controlled by the Indemnified Party pursuant to this
Section 2(c), and the Indemnifying Party shall bear its own costs and
expenses with respect to such participation. If requested by the Indemnified
Party, the Indemnifying Party shall cooperate, at its sole cost and expense,
with the Indemnified Party and its counsel in contesting any Third Party
Claim so contested by the Indemnified Party, including, without limitation,
the making of any related counterclaim against the Person asserting the Third
Party Claim or any cross-complaint against any Person.
(v) In the event an Indemnified Party should have a claim
against an Indemnifying Party hereunder which does not involve a Third Party
Claim, the Indemnified Party shall transmit to the Indemnifying Party, with a
copy to the Escrow Agent, a written notice (the "Indemnity Notice")
describing in reasonable detail the nature of the claim, an estimate of the
amount of damages attributable to such claim and the basis of the Indemnified
Party's request for indemnification under this Agreement. If the
Indemnifying Party does not notify the Indemnified Party within thirty (30)
days from its receipt of the Indemnity Notice that the Indemnifying Party
disputes such claim, the claim specified by the Indemnified Party in the
Indemnity Notice shall be deemed a liability of the Indemnifying Party
hereunder. If the Indemnifying Party has timely disputed such claim, as
provided above, such dispute shall be resolved by litigation in an
appropriate court of competent jurisdiction.
(vi) Payments of all amounts owing by the Indemnifying Party
pursuant to Sections 2(c)(iii) and (iv) shall be made not later than thirty
(30) days after the latest of (A) the settlement of the Third Party Claim,
(B) the expiration of the period for appeal of a final adjudication of such
Third Party Claim or (C) the expiration of the period for appeal of a final
adjudication of the Indemnifying Party's liability to the Indemnified Party
under this Agreement. Payments of all amounts owing by the Indemnifying
Party pursuant to Section 2(c)(v) shall be made not later than thirty (30)
days after the expiration of the thirty-day Indemnity Notice period or, if
the Indemnifying Party has timely disputed such claim, the expiration of the
period for appeal of a final adjudication of the Indemnifying Party's
liability to the Indemnified Party under this Agreement.
4
<PAGE>
(vii) The failure to provide notice as provided in this
Section 2(c) shall not excuse any party from its continuing obligations
hereunder; however, any claim shall be reduced by the damages resulting from
such party's delay or failure to provide notice as provided in this Section
2(c).
(viii) Notwithstanding anything to the contrary in this
Section 2(c), should any Third Party Claim hereunder involve a situation
where the Indemnified Party reasonably anticipates that part of the claim
will be borne by it and part of the claim will be borne by the Indemnifying
Party due to the existence of the limitations in Sections 2(e) and 2(f), the
parties shall jointly consult and proceed as to any such Third Party Claim.
(d) With respect to claims made under Section 2 and Section 3
hereto, the Stockholders hereby waive and agree not to assert against the
Company, its officers, directors, employees or agents, any claims for
contribution or indemnification with respect to the representations,
warranties and agreements made by the Company with respect thereto.
(e) The Stockholders shall have no liability hereunder to
indemnify the Company for Losses arising under Section 3 or Sections 2(a)(ii)
or (v) or under Section 2(a)(vii) to the extent incurred in connection with
such breach or breaches described in Section 2(a)(ii) or (v) until the
aggregate of all Losses described in Section 3 and in Section 2(a) exceed
three hundred thousand dollars ($300,000) (the "Basket Amount"), in which
event the Company shall be entitled to indemnification for all such Losses to
the extent that they exceed the Basket Amount. The maximum aggregate amount
which the Company shall be entitled to recover from the Stockholders after
the Effective Time under Section 3 and Section 2(a) shall not exceed Five
Million Dollars ($5,000,000) (the "Ceiling Amount"); provided that this
sentence shall not apply with respect to the obligations of the Stockholders
to indemnify the Company under Section 2(a)(i) or under Section 2(a)(vii).
(f) The Company shall have no liability hereunder to indemnify the
Stockholders for Losses arising under Section 2(b)(i) or under Section
2(b)(iii) to the extent incurred in connection with such breach or breaches
described in Section 2(b)(i) until the aggregate of all Losses described in
Section 2(b) exceed the Basket Amount, in which event the Stockholders shall
be entitled to indemnification for all such Losses to the extent that they
exceed the Basket Amount. The maximum aggregate amount which the
Stockholders shall be entitled to recover from the Company after the
Effective Time under Section 2(b) shall not exceed the Ceiling Amount;
provided that this sentence shall not apply with respect to the obligations
of the Company to indemnify the Stockholders under Section 2(b)(ii) or under
Section 2(b)(iii).
3. COMPLIANCE WITH ENVIRONMENTAL REGULATORY REQUIREMENTS AND
ENVIRONMENTAL INDEMNIFICATION.
(a) Subject to Section 2(e), but notwithstanding any other
provision of this Agreement or the Merger Agreement to the contrary, the
Stockholders, jointly and severally, shall be responsible for, and shall
indemnify and defend the Company against
5
<PAGE>
and save it harmless from, against, and in respect of, and covenant not to sue
the Company, its respective officers, directors, stockholders and agents, and
their respective successors and assigns for, any and all Losses incurred with
regard to the matters which are the subject of Section 5.22 of the Merger
Agreement or based upon the presence of or any release or disposal of any
Hazardous Material occurring prior to the Closing Date whether caused by any
act or omission of a third party or parties or by virtue of any condition or
use of the properties owned, leased, operated or controlled by the Company or
its respective predecessors in interest.
(b) The indemnification of this Section 3 shall include any and
all Losses relating to or arising out of any claim by any Person or
regulatory agency arising out of, related to or in connection with (i) any
violation or alleged violation of any Environmental Law, attributable to
circumstances or events arising or occurring prior to the Closing Date;
(ii) any violation or alleged violation, attributable to circumstances or
events arising or occurring prior to the Closing Date, of any federal, state,
local or foreign license, permit or other government approval, authorization,
order, decree, judgment, injunction, notice, or request for information
pertaining to any environmental matter; (iii) the generation, transport,
treatment, recycling, storage or disposal of Hazardous Material, or
arrangement therefor, prior to the Closing Date, by the Company or any of its
predecessors in interest; and (iv) any remedial action or corrective action
(as the latter term is used in Sections 3004(u), 3004(v), and 3008(h) of the
Resource Conservation and Recovery Act) arising out of, related to, or in
connection with property owned, leased, operated, or controlled by the
Company at which Hazardous Material was generated, treated, stored or
disposed of prior to the Closing Date. In the event that liabilities and
costs result from circumstances or events arising or occurring both before
and after the Closing Date, the Stockholders shall be liable under this
paragraph only for those liabilities and costs attributable to circumstances
or events arising or occurring prior to the Closing Date. If costs and
liabilities are not clearly allocable to circumstances or events arising or
occurring either before or after the Closing Date, such allocation shall be
made in an equitable manner.
(c) The indemnification of this Section 3 shall also include any
Losses relating to or arising out of any claim of injury to employees of the
Company caused by the use of asbestos in any manner, provided that this
indemnification shall only be applicable to the extent such injury results
from asbestos which was present in any product or asset of the Company or any
of its subsidiaries on or prior to the Closing Date.
4. DEPOSIT OF ESCROW FUNDS.
Upon the execution of this Agreement, AAC will deliver to the
Escrow Agent the Escrow Amount by wire transfer, the receipt of which is
hereby acknowledged by the Escrow Agent. The Escrow Agent shall invest the
Escrow Amount in an account identified as being established pursuant to this
Agreement (the "Escrow Account"). The Escrow Agent will hold said Escrow
Amount together with all investments thereof, additions thereto and all
interest accumulated thereon and proceeds therefrom (the "Escrow Funds") in
escrow upon the terms and conditions set forth in this Agreement
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<PAGE>
and shall not withdraw the Escrow Funds from the Escrow Account except as
provided herein.
5. INVESTMENTS.
(a) The Escrow Agent shall invest and reinvest from time to time
the Escrow Funds in any investment agreed to in writing by the Stockholders
and the Company. In the absence of such direction, the Escrow Agent shall
invest the Escrow Funds in the Rembrandt Treasury Money Market Fund or the
Rembrandt Government Money Market Fund. It is expressly agreed that any
Investments may be purchased by the Escrow Agent notwithstanding that an
affiliate of the Escrow Agent has underwritten, privately placed or made a
market for, any such Investments, or may in the future underwrite, privately
place or make a market in any such Investments. To the extent the Escrow
Agent invests any funds in the manner provided for in this Section, no party
hereto shall be liable for any loss which may be incurred by reason of any
such investment.
(b) The Escrow Agent shall have the power to reduce, sell or
liquidate the foregoing investments whenever the Escrow Agent shall be
required to release all or any portion of the Escrow Funds pursuant to
Section 6 hereof. The Escrow Agent shall have no liability for any
investment losses resulting from the investment, reinvestment, sale or
liquidation of any portion of the Escrow Funds, except in the case of the
gross negligence or willful misconduct of the Escrow Agent.
6. CLAIMS.
(a) At any time and from time to time, during the period from the
Closing through the Escrow Expiration Date (as defined in Section 8 hereof),
the Company may give to the Escrow Agent a copy of one or more Claims Notices
or Indemnity Notices, as described in Section 2(c). Upon receipt of a Claims
Notice or an Indemnity Notice, the Escrow Agent shall, if such Claims Notice
or Indemnity Notice sets forth the amount of such claim, hold a portion of
the Escrow Fund equal to the amount of such claim as set forth in such Claims
Notice or Indemnity Notice (or, if the amount set forth exceeds the entire
amount of the Escrow Fund, the entire amount of the Escrow Fund) in escrow
until receiving notice of a Determination (as defined in Section 6(b) below)
of such claim. If the Claims Notice or Indemnity Notice states that the
amount of such claim is not reasonably ascertainable by the Company, the
Escrow Agent shall hold the entire amount of the Escrow Fund then in its
possession until subsequently notified by the Company of the amount of such
claim, and thereafter shall hold a portion of the Escrow Fund equal to the
amount of such claim as set forth in such subsequent notice in escrow until
Determination of such claim. In the case of any claim, the amount of which
is not reasonably ascertainable by the Company at the time the Claims Notice
or Indemnity Notice of such claim is given, the Company agrees to notify the
Escrow Agent and the Stockholders in writing of the amount of such claim
promptly after such amount becomes reasonably ascertainable by the Company.
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(b) For the purpose of this Agreement, a "Determination" shall
mean (i) a written compromise or settlement signed by the Company and the
Stockholders or (ii) a binding arbitration award or a judgment of a court of
competent jurisdiction in the United States of America or elsewhere (the time
for appeal having expired and no appeal having been perfected) in favor of
the Company and against the Stockholders and based on a Claim under
Section 2(a) or Section 3 of this Agreement; provided, however, that in the
case of a claim described in an Indemnity Notice, the Indemnity Notice to the
Escrow Agent setting forth the amount thereof as reasonably ascertained by
the Company shall constitute a Determination of such claim unless, within
thirty (30) days of the receipt by the Stockholders of such Indemnity Notice,
as above provided, including the amount of such claim, the Stockholders
notify the Escrow Agent that they dispute such amount in whole or in part (an
"Objection").
(c) Within ten (10) business days following notice of a
Determination, the Escrow Agent shall disburse to the Company from the Escrow
Funds the amount set forth in such Determination. In the event of an
Objection, the Escrow Agent shall release the amount which is not in dispute,
if any, and shall hold the amount in dispute until such Objection is resolved
in accordance with the provisions of Section 7 hereof.
(d) On a semi-annual basis on January 17 and July 17, commencing
on January 17, 1997, the Escrow Agent shall distribute to the Stockholders in
accordance with the percentages set forth on Exhibit A any and all interest
and other earnings accumulated in the Escrow Account.
(e) On April 18, 1997, the Escrow Agent shall distribute to the
Stockholders in accordance with the percentages set forth in Exhbiit A an
amount equal to the excess, if any, of the Escrow Funds remaining at that
time over the sum of (a) Two Million Five Hundred Thousand Dollars
($2,500,000) and (b) the amount of the Escrow Funds set aside by the Escrow
Agent for Claims of the Company pursuant to Section 6(a).
(f) On November 19, 1997, the Escrow Agent shall distribute to the
Stockholders in accordance with the percentages set forth in Exhibit A an
amount equal to the Escrow Funds remaining at that time minus the amount of
the Escrow Funds set aside by the Escrow Agent for Claims of the Company
pursuant to Section 6(a).
7. SETTLEMENT OF DISPUTES.
Any dispute which may arise under this Agreement with respect to
the delivery and/or ownership or right of possession of the Escrow Funds or
any part thereof, or the duties of the Escrow Agent hereunder, shall be
settled either by mutual agreement of the Company and the Stockholders
(evidenced by appropriate instructions in writing to the Escrow Agent, signed
by such parties) or by a binding arbitration award or a final order, decree
or judgment of any appropriate court located in the State of Illinois or any
other jurisdiction (the time for appeal having expired and no appeal having
been perfected), each party or parties bearing its own costs and expenses
with respect to the dispute; provided, however, that neither the Company nor
the Stockholders shall have the right to dispute any claim which has been the
subject of a Determination. The Escrow Agent shall be under no duty
whatsoever to institute or
8
<PAGE>
defend any such proceedings. Prior to the settlement of any such dispute, the
Escrow Agent is authorized and directed to retain in its possession, without
liability to anyone, that portion of the Escrow Funds which is the subject of
such dispute.
8. TERMINATION OF ESCROW AGREEMENT.
(a) The escrow created pursuant to this Agreement shall terminate
upon the earlier to occur of: (i) the date sixteen (16) months from the
Closing Date; and (ii) the distribution of all of the Escrow Funds by the
Escrow Agent pursuant to this Agreement (the earliest to occur of (i) and
(ii) above being hereinafter referred to as the "Escrow Expiration Date");
provided, however, that if there are any unresolved or unsettled claims
pursuant to Section 2(a) or 3 of this Agreement outstanding on the last day
of the foregoing sixteen (16) month period, this Agreement will not terminate
until the resolution of all such claims.
(b) As soon as practicable after the Escrow Expiration Date, the
Escrow Agent shall promptly deliver to the Stockholders out of the Escrow
Fund the excess, if any, of the total amount remaining in the Escrow Funds
over the sum of all amounts under unresolved or unsettled claims then
outstanding, and the Escrow Agent shall continue to retain in the Escrow
Funds all such amounts under unresolved or unsettled Claims then outstanding,
subject to the terms of this Escrow Agreement until resolution of such
claims. Payments from the Escrow Funds to the Stockholders shall be made as
to the Stockholders in accordance with his written directions to the Escrow
Agent.
(c) The occurrence of the Escrow Expiration Date, the termination
of the escrow and the distribution of all of the Escrow Funds shall not
terminate this Agreement or the indemnification obligations of the Surviving
Corporation and the Stockholders hereunder, which obligations shall continue
until ninety (90) days after the expiration of the applicable limitations
period for any claim for which indemnification may be sought under this
Agreement.
9. CONCERNING THE ESCROW AGENT.
(a) The Escrow Agent shall have no duties or responsibilities
except those expressly set forth herein. The Escrow Agent may consult with
counsel and shall have no liability hereunder except for its own gross
negligence or willful misconduct. It may rely on any notice, instruction,
certificate, statement, request, consent, confirmation, agreement or other
instrument which it reasonably believes to be genuine and to have been signed
or presented by a proper person or persons.
(b) The Escrow Agent shall have no duties with respect to any
agreement or agreements with respect to any or all of the Escrow Funds other
than as provided in this Agreement. In the event that any of the terms and
provisions of any other agreement between any of the parties hereto conflict
or are inconsistent with any of the terms and provisions of this Agreement,
the terms and provisions of this Agreement shall govern and control in all
respects. Notwithstanding any provision to the contrary contained in
9
<PAGE>
any other agreement, the Escrow Agent shall have no interest in the Escrow
Funds except as provided in this Agreement.
(c) So long as the Escrow Agent shall have any obligation to pay
any amount to the Stockholders and/or the Company from the Escrow Fund
hereunder, the Escrow Agent shall keep proper books of record and account, in
which full and correct entries shall be made of all receipts, disbursements
and investment activity in the Escrow Account.
(d) The Escrow Agent shall not be bound by any modification of
this Agreement affecting the rights, duties and obligations of the Escrow
Agent unless such modification shall be in writing and signed by the other
parties hereto, and the Escrow Agent shall have given its prior written
consent thereto. The Escrow Agent shall not be bound by any other
modification of this Agreement unless the Escrow Agent shall have received
written notice thereof.
(e) The Escrow Agent may resign as escrow agent at any time by
giving thirty (30) days written notice by registered or certified mail to the
Company and the Stockholders and such resignation shall take effect at the
end of such 30 days or upon earlier appointment of a successor. A successor
escrow agent hereunder may be appointed by designation in writing signed by
the Company and the Stockholders. The Company and the Stockholders undertake
to utilize their best efforts to arrange for the appointment of a successor
escrow agent. If any instrument of acceptance by a successor escrow agent
shall not have been delivered to the Escrow Agent within sixty (60) days
after the giving of such notice of resignation, the resigning Escrow Agent
may at the expense of the Stockholders and the Company petition any court of
competent jurisdiction for the appointment of a successor escrow agent.
(f) If at any time hereafter the Escrow Agent shall resign, be
removed, be dissolved or otherwise become incapable of acting, or the bank or
trust company acting as the Escrow Agent shall be taken over by any
government official, agency, department or board, or the position of the
Escrow Agent shall become vacant for any of the foregoing reasons or for any
other reason, the Stockholders and the Company shall appoint a successor
escrow agent to fill such vacancy.
(g) Every successor escrow agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor, and also to the Company
and the Stockholders, an instrument in writing accepting such appointment
hereunder, and thereupon such successor escrow agent, without any further
act, shall become fully vested with all the rights, immunities and powers and
shall be subject to all of the duties and obligations, of its predecessor;
and every predecessor escrow agent shall deliver all property and moneys held
by it hereunder to its successor.
(h) The Company and the Stockholders shall share equally the fee
charged by the Escrow Agent for performing its services hereunder. Except as
provided in subsection 9(i) hereof, the Company and the Stockholders shall
share equally any reasonable out of pocket cost incurred by the Escrow Agent
in performing its duties hereunder. This covenant shall survive termination
of this Agreement.
10
<PAGE>
(i) The Company and the Stockholders shall indemnify and hold the
Escrow Agent harmless from and against any and all expenses (including
reasonable attorneys' fees), liabilities, claims, damages, actions, suits or
other charges ("Agent Claims") incurred by or assessed against the Escrow
Agent for anything done or omitted by the Escrow Agent in the performance of
the Escrow Agent's duties hereunder, except such which result from the Escrow
Agent's bad faith, gross negligence or willful misconduct. Agent Claims
payable hereunder shall be paid one-half by the Company and one-half by the
Stockholders. This indemnity shall survive the resignation of the Escrow
Agent or the termination of this Agreement.
(j) To the extent any amount due to the Escrow Agent pursuant to
Sections 9(h) or 9(i) is not paid, the Escrow Agent may deduct the same from
the Escrow Account.
(k) The Escrow Agent's fees shall be a $500.00 acceptance fee and
an annual fee of $3,500.00.
10. MISCELLANEOUS.
(a) This Agreement shall be construed by and governed in
accordance with the laws of the State of Illinois, without regard to such
jurisdiction's conflicts of laws principals.
(b) This Agreement shall be binding upon and shall inure to the
benefit of the heirs, executors, administrators, legal representatives,
successors and assigns of the parties hereto.
(c) This Agreement may be executed in one or more counterparts
which taken together shall constitute but one and the same instrument.
(d) Section headings contained herein have been inserted for
reference purposes only and shall not be construed as part of this Agreement.
(e) This Agreement, the Merger Agreement and the other documents
delivered pursuant thereto constitute the entire agreement of the parties
hereto with respect to the subject matter hereof; and this Agreement may be
modified or amended only by a written instrument duly executed by all parties
hereto or their respective successors or assigns.
(f) All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given
(unless otherwise specifically provided for herein) if delivered personally
(including by courier), telecopied (which is confirmed) or mailed (registered
or certified mail), postage prepaid or:
11
<PAGE>
If to the Company:
Mid-West Automation Enterprises, Inc.
c/o DT Industries, Inc.
Corporate Center, Suite 2-300
1949 East Sunshine
Springfield, MO 65804
Attention: Chief Executive Officer
Telecopier No. - (417)-890-0525
with a copy to:
Dickstein Shapiro Morin & Oshinsky L.L.P.
2101 L Street, N.W.
Washington, D.C. 20037
Attention: Ira H. Polon, Esquire
Telecopier No. - (202) 887-0689
If to the Stockholders:
c/o Robert Eitzinger
3675 Cuba Road
Long Grove, IL 60047
with a copy to:
Rudnick & Wolfe
203 North LaSalle Street
Suite 1800
Chicago, IL 60601-1293
Attention: Allen J. Ginsburg, Esquire
Telecopier No. - (312) 984-2299
If to the Escrow Agent:
LaSalle National Trust, N.A.
135 South LaSalle Street
Suite 1825
Chicago, IL 60603
Attention: Estelita B. Esmenda
Telecopier No. - (312) 904-2236
or to such other addresses or persons as any party may have furnished to the
other parties in writing, in accordance herewith, provided, however, that
notices to the Escrow Agent shall be deemed effective only upon receipt.
(g) The Escrow Agent shall not be liable to pay any tax on any
interest earned on the Escrow Amount, it being the understanding of the
parties that any tax attributable to interest earned on the Escrow Funds
shall be the responsibility of the
12
<PAGE>
Stockholders. The tax identification number of each of the Stockholders is
set forth on Exhibit A.
(h) All actions required or permitted to be taken by the
Stockholders under this Agreement (including giving, receiving and making all
accountings, reports, notices, consents, waivers and amendments) shall be
made or taken by the holders of the majority of the outstanding stock of the
Company immediately prior to the Effective Time, as reflected on Exhibit A,
and any action taken by such majority Stockholders hereunder shall be binding
upon all of the Stockholders, and the Surviving Corporation, the Escrow Agent
and any other Person dealing with such Stockholder or Stockholders shall be
entitled to rely on any action, notice, consent, election, certificate or
other document or instrument as if received from all of the Stockholders.
(i) If any party hereto refuses to comply with, or at any time
violates or attempts to violate, any term, covenant or agreement contained in
this Agreement, any other party hereto may, by injunctive action, compel the
defaulting party to comply with, or refrain from violating, such term,
covenant or agreement, and may, by injunctive action, compel specific
performance of the obligations of the defaulting party.
(j) Except as provided herein, the rights and obligations of the
parties under this Agreement shall not be assigned to any person or entity,
without the written consent of the other parties.
[The balance of this page has been intentionally left blank.]
13
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed and delivered on the date first above written.
MID-WEST AUTOMATION ENTERPRISES,
INC.
By: /s/ Robert Eitzinger
-----------------------------------
Name: Robert Eitzinger
Title: Chairman and President
STOCKHOLDERS:
RGA ASSOCIATES, an Illinois limited
partnership
By: RGA Associates, Inc., general
partner
By: /s/ Robert Eitzinger
------------------------------
Robert Eitzinger
President
/s/ Gisela Eitzinger
----------------------------------------
Gisela Eitzinger, as co-Trustees under
Robert Eitzinger Trust No. 1 dated
January 5, 1989
/s/ Kenneth R. Vernon
----------------------------------------
Kenneth R. Vernon, as co-Trustee under
Robert Eitzinger Trust No. 1 dated
January 5, 1989
<PAGE>
ESCROW AGENT:
LASALLE NATIONAL TRUST, N.A.
By: /s/ Estelita B. Esmenda
-----------------------------------
Estelita B. Esmenda
Assistant Vice President
<PAGE>
Subject to the limitations set forth in Section 2(e), the
undersigned hereby unconditionally guarantee the full and punctual payment
and performance of all of the obligations of the Stockholders to the
Surviving Corporation arising under this Agreement. The liability of the
undersigned guarantors hereunder shall be primary, and in any right of action
which shall accrue to the Surviving Corporation under this Agreement, the
Surviving Corporation may, at its option, proceed against the undersigned
without having commenced any action, or having obtained any judgment, against
the Stockholders; provided, however, prior to proceeding against the
undersigned guarantors, the Surviving Corporation shall first seek recovery
from funds in the Escrow Account, if any, that are not otherwise subject to a
claim by the Surviving Corporation under this Agreement.
/s/ Robert Eitzinger
-----------------------------------
Robert Eitzinger
/s/ Gisela Eitzinger
-----------------------------------
Gisela Eitzinger
<PAGE>
NOTE
The following page contains a list of Exhibits and Schedules which have
been intentionally omitted by the Registrant pursuant to Item 601(b)(2) of
Regulation S-K.
A copy of any omitted Exhibit or Schedule will be provided to the
Securities and Exchange Commission upon request.
<PAGE>
Exhibit A Stockholders of the Company; Percentages and Taxpayer
Identification Numbers
SECOND AMENDED AND RESTATED CREDIT FACILITIES AGREEMENT
among
THE BOATMEN'S NATIONAL BANK OF ST. LOUIS
as "Administrative Agent", "Co-Arranger" and a "Lender",
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
as "Co-Arranger" and a "Lender"
and
THE OTHER LENDERS LISTED ON THE SIGNATURE PAGES HEREOF
as "Lenders"
and
DT INDUSTRIES, INC.,
and
THE OTHER BORROWERS LISTED ON THE SIGNATURE PAGES HEREOF
as "Borrower"
July 19, 1996
<PAGE>
Table of Contents
1. Effective Date ............................................ 1
2. Definitions and Rules of Construction ..................... 2
2.1. Definitions ..................................... 2
2.2. References to Borrower, Canadian Borrower and
Borrower's Representative ....................... 2
2.3. References to Covered Person .................... 2
2.4. References to Required Lenders .................. 2
2.5. Accounting Terms; Consolidated Basis ............ 2
2.6. "Satisfactory" .................................. 2
2.7. Computation of Time Periods ..................... 2
2.8. General ......................................... 3
3. Lenders' Commitments ...................................... 3
3.1. Revolving Commitments ........................... 3
3.1.1. Revolving Advances .................... 3
3.1.2. Limitation on Revolving Advances ...... 3
3.1.3. Borrowing Base ........................ 4
3.1.3.1 ............................... 4
3.1.3.2 ............................... 4
3.2. Swingline Commitment ............................. 4
3.2.1. Swingline Advances .................... 4
3.2.2. Limitations on Swingline Advances ..... 5
3.3. Term Commitment .................................. 5
3.4. Canadian Term Commitment ......................... 5
3.5. Post-Offering Acquisition Loan Commitment ........ 5
3.6. Extension of Post-Offering Acquisition Loan
Commitment ....................................... 6
3.7. Determination of Post-Offering Acquisition Loan
Amount ........................................... 6
3.8. General Acquisition Loan Commitment .............. 6
3.9. Letter of Credit Commitment ...................... 7
3.10. Existing Letters of Credit ....................... 7
3.10.1. Canadian Letter of Credit ............. 7
3.10.2. Swiftpack Letter of Credit ............ 7
3.10.2.1. Subrogation Agreement .. 8
4. Interest; Yield Protection ................................ 8
4.1. Interest on Loans ................................ 8
4.2. Interest on Draws on Letters of Credit ........... 8
4.3. Definitions of Alternate Base Rate and Adjusted
LIBO Rate ........................................ 8
4.3.1. The Alternate Base Rate ............... 8
4.3.2. Adjusted LIBO Rate .................... 8
4.4. CBR Increments and LIBOR Increments .............. 9
4.5. Interest Periods for LIBOR Loans ................. 10
4.6. Conversion of Loans .............................. 10
<PAGE>
4.7. Time of Accrual .................................. 11
4.8. Computation ...................................... 11
4.9. Rate After Maturity .............................. 11
4.10. Taxes ............................................ 11
4.10.1. Net Payments .......................... 11
4.10.2. Exemption Forms ....................... 12
4.10.3. Exclusions From Gross-Up Obligations .. 12
4.11. Compensation for Increase In LIBOR Loan Costs .... 13
4.12. LIBOR Loan Funding Losses ........................ 13
4.13. Capital Adequacy Reimbursement ................... 14
4.14. Usury ............................................ 15
5. Fees ...................................................... 15
5.1. Upfront Fee to Co-Arrangers ...................... 15
5.2. Commitment Fee to Lenders ........................ 15
5.3. Administrative Fee to Administrative Agent ....... 16
5.4. Letter of Credit Fees to Lenders ................. 16
5.5. Letter of Credit Fees to Administrative Agent
as Letter of Credit Issuer ....................... 16
5.6. Special U.K. LC Fee .............................. 16
5.7. DTUK Special LC Fee Backstop ..................... 16
6. Payments .................................................. 16
6.1. Scheduled Payments on Revolving Loans and
the Swingline Loan ............................... 16
6.1.1. Interest .............................. 16
6.1.2. Principal ............................. 16
6.1.2.1. Daily Payments ......... 17
6.1.2.2. Payment on Revolver
Maturity Date .......... 17
6.2. Scheduled Payments on Term Loan and Canadian
Term Loan ........................................ 17
6.2.1. Interest .............................. 17
6.2.2. Principal ............................. 17
6.3. Scheduled Payments on Post-Offering Acquisition
Loan and General Acquisition Loan ................ 18
6.3.1. Interest .............................. 18
6.3.2. Principal ............................. 18
6.3.3. Special General Acquisition Loan
Payment Provisions .................... 18
6.4. Prepayments; Reduction of Revolving Commitment ... 19
6.4.1. Voluntary Prepayments ................. 19
6.4.2. Voluntary Reduction of Aggregate
Revolving Commitment .................. 19
6.4.3. Mandatory Prepayments When
Over-Advances Exist ................... 19
6.4.4. Other Mandatory Prepayments ........... 19
6.4.4.1. Proceeds from Sales
of Assets .............. 20
<PAGE>
6.4.4.2. Proceeds from Sale of
Securities ............. 20
6.4.4.3. Application of Insurance/
Condemnation Proceeds .. 20
6.4.4.4. Excess Cash Flow ....... 21
6.4.5. Mandatory Reduction of Revolving
Commitment ............................ 21
6.5. Manner of Payments and Timing of Application of
Payments ......................................... 21
6.5.1. Payment Requirement ................... 21
6.5.2. Application of Payments and Proceeds .. 22
6.5.3. Interest Calculation .................. 22
6.6. Returned Instruments ............................. 22
6.7. Compelled Return of Payments or Proceeds ......... 22
6.8. Due Dates Not on Business Days ................... 22
7. Borrowings ................................................ 23
7.1. Advances to Borrower ............................. 23
7.2. Revolving Advances to Repay the Swingline Loan ... 23
7.2.1. ........................................... 23
7.2.2. ........................................... 23
7.3. Lenders' Right to Make Other Revolving Advances .. 24
7.4. Letters of Credit ................................ 24
7.5. Administrative Agent's Notice to Lenders;
Funds Deposit .................................... 24
7.5.1. Advances .............................. 24
7.5.2. Funding Draws on Letters of Credit 24
7.6. Advances Ratable ................................. 24
7.7. Administrative Agent's Availability Assumption ... 25
7.8. Disbursement ..................................... 25
7.9. Amount, Number, and Purpose Restrictions on
Advances ......................................... 25
7.10. Restriction on Number of LIBOR Loans ............. 25
7.11. Each Advance Request and Letter of Credit
Request a Certification .......................... 25
7.12. Requirements for Every Advance Request ........... 26
7.13. Requirements for Every Letter of Credit Request .. 26
7.14. Exoneration of Administrative Agent and Lenders .. 26
7.15. Suspension of Obligation to Make LIBOR Advances .. 26
8. Security and Guaranties ................................... 26
8.1. Security Agreements .............................. 26
8.2. Mortgages ........................................ 27
8.3. Intellectual Property Assignments ................ 27
8.4. Stock Pledge Agreements .......................... 27
8.5. Account Assignment ............................... 27
8.6. Guaranty ......................................... 27
9. Power of Attorney ......................................... 27
9.1. ...................................................... 27
9.2. ...................................................... 28
<PAGE>
10. Conditions of Lending ..................................... 28
10.1. Conditions to Initial Advance .................... 28
10.1.1. Listed Documents and Other Items ...... 28
10.1.2. Net Worth ............................. 28
10.1.3. Availability Under Aggregate
Revolving Commitment .................. 28
10.1.4. Financial Condition ................... 28
10.1.5. Mid-West Enterprises and Mid-West
Systems Financial Statements .......... 29
10.1.6. Default ............................... 29
10.1.7. Perfection of Security Interests ...... 29
10.1.8. Representations and Warranties ........ 29
10.1.9. Material Adverse Change ............... 29
10.1.10. Pending Material Proceedings .......... 29
10.1.11. Payment of Fees ....................... 29
10.1.12. Legal Opinion ......................... 29
10.1.13. Other Items ........................... 29
10.2. Conditions to All Subsequent Advances ............ 29
10.2.1. General Conditions .................... 29
10.2.2. Representations and Warranties ........ 29
10.2.3. Default ............................... 30
11. Special Conditions to Post-Offering Acquisition
Advances; General Acquisition Advances; Certain
Revolving Advances ........................................ 30
11.1. Acquisitions Requiring Approval .................. 30
11.2. Other Acquisition Provisions ..................... 30
11.2.1. Certain Post-Offering Acquisition
Advances .............................. 30
11.2.1.1. ............................. 30
11.2.1.2. ............................. 31
11.2.1.3. ............................. 31
11.2.1.4. ............................. 31
11.2.2. Certain General Acquisition Advances .. 31
11.2.2.1. ............................. 31
11.2.2.2. ............................. 31
11.3. Surviving Company Becomes a Borrower or a
Guarantor ........................................ 31
11.4. Security Interests Granted in Assets ............. 32
11.5. Acquisition Documents Assignment ................. 32
11.6. Other Approvals Obtained ......................... 32
11.7. Satisfactory Due Diligence Completed ............. 32
11.8. Special Opinion of Counsel ....................... 32
11.9. Proforma Financial Statements .................... 32
11.10. Contemporaneous Closing .......................... 32
11.11. Other Conditions ................................. 33
12. Conditions to Issuance of Letter of Credit ................ 33
12.1. Reimbursement Agreement .......................... 33
12.1.1. Special Swiftpack Letter of Credit
Provisions ............................ 33
12.2. No Prohibitions .................................. 33
<PAGE>
12.3. Representations and Warranties ................... 33
12.4. No Default ....................................... 33
12.5. Other Conditions ................................. 33
13. Representations and Warranties ............................ 33
13.1. Organization and Existence ....................... 33
13.2. Authorization .................................... 34
13.3. Due Execution .................................... 34
13.4. Enforceability of Obligations .................... 34
13.5. Burdensome Obligations ........................... 34
13.6. Legal Restraints ................................. 34
13.7. Labor Contracts and Disputes ..................... 34
13.8. No Material Proceedings .......................... 34
13.9. Material Licenses ................................ 34
13.10. Compliance with Material Laws .................... 34
13.10.1. General Compliance with Environmental
and Employment Laws ................... 34
13.10.2. Proceedings ........................... 35
13.10.3. Investigations Regarding Hazardous
Materials ............................. 35
13.10.4. Notices and Reports Regarding
Hazardous Materials ................... 35
13.10.5. Hazardous Materials on Real Property .. 35
13.10.6. Environmental Property Transfer Acts .. 35
13.11. Other Names ...................................... 35
13.12. Prior Transactions ............................... 35
13.13. Capitalization ................................... 35
13.14. Solvency ......................................... 35
13.15. Financial Statements ............................. 36
13.16. No Change in Condition ........................... 36
13.17. No Defaults ...................................... 36
13.18. Investments ...................................... 36
13.19. Indebtedness ..................................... 36
13.20. Indirect Obligations ............................. 36
13.21. Encumbrances ..................................... 36
13.22. Operating Leases ................................. 36
13.23. Capital Leases ................................... 36
13.24. Tax Liabilities; Governmental Charges ............ 36
13.25. Pension Benefit Plans ............................ 36
13.25.1. Prohibited Transactions ............... 37
13.25.2. Claims ................................ 37
13.25.3. Reporting and Disclosure Requirements . 37
13.25.4. Accumulated Funding Deficiency ........ 37
13.25.5. Multi-employer Plan ................... 37
13.26. Welfare Benefit Plans ............................ 37
13.27. Retiree Benefits ................................. 37
13.28. Distributions .................................... 37
13.29. Real Property .................................... 37
13.30. State of Collateral and other Property ........... 38
<PAGE>
13.30.1. Accounts .............................. 38
13.30.2. Inventory ............................. 38
13.30.3. Equipment ............................. 39
13.30.4. Intellectual Property ................. 39
13.30.5. Documents, Instruments and Chattel
Paper ................................. 39
13.31. Chief Place of Business; Locations of Collateral . 39
13.31.1. ......................................... 39
13.31.2. ......................................... 39
13.31.3. ......................................... 39
13.32. Negative Pledges ................................. 39
13.33. Security Documents ............................... 39
13.33.1. Security Agreements ................... 40
13.33.2. Mortgages ............................. 40
13.33.3. Intellectual Property Assignments ..... 40
13.33.4. Account Assignment .................... 40
13.33.5. Stock Pledge Agreement ................ 40
13.33.6. Acquisition Documents Assignments ..... 40
13.34. S Corporation .................................... 40
13.35. Subsidiaries and Affiliates ...................... 40
13.36. Bank Accounts and Lockboxes ...................... 40
13.37. Margin Stock ..................................... 40
13.38. Securities Matters ............................... 41
13.39. Investment Company Act, Etc. ..................... 41
13.40. No Material Misstatements or Omissions ........... 41
13.41. Filings .......................................... 41
13.42. Broker's Fees .................................... 41
13.43. Eligibility of Collateral ........................ 41
14. Survival of Representations ............................... 41
15. Affirmative Covenants ..................................... 41
15.1. Use of Proceeds .................................. 42
15.2. Corporate Existence .............................. 42
15.3. Maintenance of Property and Leases ............... 42
15.4. Inventory ........................................ 42
15.5. Insurance ........................................ 42
15.6. Payment of Taxes and Other Obligations ........... 43
15.7. Compliance With Laws ............................. 43
15.7.1. Environmental Laws .................... 43
15.7.2. Pension Benefit Plans ................. 43
15.7.3. Employment Laws ....................... 43
15.8. Discovery and Clean-Up of Hazardous Material ..... 43
15.8.1. In General ............................ 43
15.8.2. Asbestos Clean-Up ..................... 44
15.9. Termination of Pension Benefit Plan .............. 44
15.10. Notice to Co-Arrangers of Material Events ........ 44
15.10.1. ......................................... 44
15.10.2. ......................................... 44
<PAGE>
15.10.3. ......................................... 44
15.10.4. ......................................... 45
15.10.5. ......................................... 45
15.10.6. ......................................... 45
15.10.7. ......................................... 45
15.10.8. ......................................... 46
15.10.9. ......................................... 46
15.10.10. ........................................ 46
15.10.11. ........................................ 46
15.10.12. ........................................ 46
15.11. Borrowing Officer ................................ 46
15.12. Maintenance of Security Interests of Security
Documents ........................................ 46
15.12.1. Preservation and Perfection of
Security Interests .................... 46
15.12.2. Collateral Held by Warehouseman,
Bailee, etc. .......................... 47
15.12.3. Compliance With Terms of Security
Documents ............................. 47
15.13. Accounting System ................................ 47
15.13.1. Account Records ....................... 47
15.13.2. Inventory Records ..................... 47
15.14. Financial Statements ............................. 47
15.14.1. Annual Financial Statements ........... 47
15.14.2. Quarterly Financial Statements ........ 48
15.14.3. Monthly Financial Statements .......... 48
15.15. Other Financial Information ...................... 48
15.15.1. Borrowing Base Certificate ............ 48
15.15.2. Agings Report ......................... 49
15.15.3. Other Reports or Information
Concerning Accounts or Inventory ...... 49
15.15.4. Stockholder and SEC Reports ........... 49
15.15.5. Pension Benefit Plan Reports .......... 49
15.15.6. Tax Returns ........................... 49
15.16. Review of Accounts ............................... 49
15.17. Inventory ........................................ 49
15.18. Annual Projections ............................... 49
15.19. Other Information ................................ 49
15.20. Audits by Co-Arrangers; Lenders .................. 49
15.21. Verification of Accounts and Notices to
Account Debtors .................................. 50
15.22. Appraisals of Collateral ......................... 50
15.23. Access to Officers and Auditors .................. 50
15.24. Proformas for Permitted Acquisitions;
Historical Combined Financial Statements ......... 50
15.25. Acquisition Documents ............................ 51
15.26. Interest Rate Protection Agreements .............. 51
15.27. Further Assurances ............................... 51
16. Negative Covenants ........................................ 52
16.1. Investments ...................................... 52
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16.1.1. .......................................... 52
16.1.2. .......................................... 52
16.1.3. .......................................... 52
16.1.4. .......................................... 52
16.1.5. .......................................... 52
16.1.6. .......................................... 52
16.2. Indebtedness ..................................... 52
16.2.1. .......................................... 52
16.2.2. .......................................... 52
16.2.3. .......................................... 52
16.2.4. .......................................... 53
16.2.5. .......................................... 53
16.2.6. .......................................... 53
16.2.7. .......................................... 53
16.3. Prepayments ...................................... 53
16.4. Indirect Obligations ............................. 53
16.5. Security Interests ............................... 53
16.5.1. .......................................... 53
16.5.2. .......................................... 53
16.5.3. .......................................... 53
16.5.4. .......................................... 54
16.5.5. .......................................... 54
16.5.6. .......................................... 54
16.5.7. .......................................... 54
16.5.8. .......................................... 54
16.6. Acquisitions ..................................... 54
16.7. Bailments; Consignments; Warehousing ............. 54
16.8. Disposal of Property ............................. 54
16.9. Distributions .................................... 55
16.10. Change of Control ................................ 55
16.11. Capital Structure; Equity Securities ............. 55
16.12. Change of Business ............................... 55
16.13. Transactions With Affiliates ..................... 55
16.14. No Default on Indebtedness or Material
Agreements ....................................... 55
16.15. Conflicting Agreements ........................... 55
16.16. Bank Accounts .................................... 55
16.17. Sale and Leaseback Transactions .................. 55
16.18. New Subsidiaries ................................. 55
16.19. Fiscal Year ...................................... 55
16.20. Transactions Having a Material Adverse Effect .... 56
16.21. Mid-West Bank Accounts ........................... 56
17. Financial Covenants ....................................... 56
17.1. Special Definitions .............................. 56
17.2. Capital Expenditures ............................. 57
17.3. Capital Leases ................................... 57
17.4. Operating Lease Obligations ...................... 57
17.5. Minimum Adjusted Operating Cash Flow ............. 57
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17.6. Minimum Interest Coverage ........................ 58
17.7. Minimum Fixed Charge Coverage .................... 58
17.8. Indebtedness to Adjusted Operating Cash Flow ..... 58
17.9. Minimum Net Worth ................................ 58
17.10. Minimum Current Ratio ............................ 59
17.11. Indebtedness Plus Eight Times Operating
Lease Payments to Capitalization ................. 59
18. Default ................................................... 59
18.1. Events of Default ................................ 59
18.1.1. Failure to Pay Principal or Interest .. 59
18.1.2. Failure to Pay Other Amounts Owed
to Lenders ............................ 59
18.1.3. Failure to Pay Amounts Owed to Other
Persons ............................... 59
18.1.4. Representations or Warranties ......... 60
18.1.5. Certain Covenant ...................... 60
18.1.6. Other Covenants ....................... 60
18.1.7. Acceleration of Other Indebtedness .... 60
18.1.8. Default Under Other Agreements ........ 60
18.1.9. Bankruptcy; Insolvency; Etc. .......... 60
18.1.10. Judgments; Attachment; Etc. ........... 61
18.1.11. Pension Benefit Plan Termination,
Etc. .................................. 61
18.1.12. Liquidation or Dissolution ............ 61
18.1.13. Seizure of Assets ..................... 61
18.1.14. Racketeering Proceeding ............... 61
18.1.15. Loan Documents; Security Interests .... 61
18.1.16. Loss to Collateral .................... 62
18.1.17. Material Adverse Change ............... 62
18.2. Cross-Default .................................... 62
18.3. Rights and Remedies in the Event of Default ...... 62
18.3.1. Termination of Commitments ............ 62
18.3.2. Acceleration .......................... 62
18.3.3. Right of Set-off ...................... 62
18.3.4. Notice to Account Debtors ............. 62
18.3.5. Entry Upon Premises and Access to
Information ........................... 62
18.3.6. Completion of Uncompleted Inventory
Items ................................. 63
18.3.7. Borrower's Obligations ................ 63
18.3.8. Secured Party Rights .................. 63
18.3.8.1. ............................. 63
18.3.8.2. ............................. 63
18.3.9. Miscellaneous ......................... 64
18.3.10. Application of Funds .................. 64
18.4. Limitation of Liability; Waiver .................. 64
18.5. Notice ........................................... 64
19. Administrative Agent and Lenders .......................... 65
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19.1. Appointment of Administrative Agent .............. 65
19.2. Powers ........................................... 65
19.3. General Immunity of Administrative Agent ......... 65
19.4. No Responsibility for Loans, Recitals, Etc. ...... 65
19.5. Action on Instructions of Required Lenders ....... 65
19.6. Employment of Agents and Counsel ................. 65
19.7. Reliance on Documents; Counsel ................... 65
19.8. Administrative Agent's Reimbursement and
Indemnification .................................. 65
19.9. Rights as a Lender ............................... 66
19.10. Independent Credit Decisions ..................... 66
19.11. Successor Administrative Agent ................... 66
19.12. Notification of Lenders .......................... 66
19.13. No Knowledge of Default .......................... 67
19.14. Collections and Distributions to Lenders by
Administrative Agent ............................. 67
20. General ................................................... 67
20.1. Lenders' Right to Cure ........................... 67
20.2. Rights Not Exclusive ............................. 68
20.3. Survival of Agreements ........................... 68
20.4. Assignments and Participations ................... 68
20.4.1. Permitted Assignments ................. 68
20.4.1.1. ............................. 68
20.4.1.2. ............................. 68
20.4.1.3. ............................. 68
20.4.1.4. ............................. 68
20.4.1.5. ............................. 69
20.4.2. Consequences and Effect of
Assignments ........................... 69
20.4.2.1. ............................. 69
20.4.2.2. ............................. 69
20.4.3. Assignment Fee ........................ 69
20.4.4. Administrative Agent to Retain Copies
Assignments and Acceptances ........... 69
20.4.5. Notice to Borrower of Assignment ...... 70
20.4.6. Sale of Participations ................ 70
20.4.6.1. ............................. 70
20.4.6.2. ............................. 70
20.4.6.3. ............................. 70
20.4.6.4. ............................. 70
20.4.6.5. ............................. 70
20.4.7. Assignments to Affiliates .............. 70
20.5. Payment of Expenses .............................. 70
20.6. General Indemnity. ............................... 71
20.6.1. .......................................... 71
20.6.2. .......................................... 72
20.6.3. .......................................... 72
20.7. Letters of Credit ................................ 72
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20.8. Changes in Accounting Principles ................. 72
20.9. Loan Records ..................................... 72
20.10. Other Security and Guaranties .................... 73
20.11. Negotiated Transaction ........................... 73
20.12. Choice of Forum .................................. 73
20.13. Service of Process ............................... 73
20.14. Jury Trial ....................................... 74
21. Miscellaneous ............................................. 74
21.1. Notices .......................................... 74
21.2. Amendments, Waivers and Consents ................. 74
21.3. Successors and Assigns ........................... 75
21.4. Severability ..................................... 75
21.5. Counterparts ..................................... 75
21.6. Governing Law; No Third Party Rights ............. 75
21.7. Counterpart Facsimile Execution .................. 75
21.8. No Other Agreements .............................. 75
21.9. Incorporation By Reference ....................... 76
21.10. Statutory Notice ................................. 76
<PAGE>
SECOND AMENDED AND RESTATED CREDIT FACILITIES AGREEMENT
This is an agreement (this "Agreement") among DT INDUSTRIES, INC.
("DTI"), a Delaware corporation, formerly known as Detroit Tool and
Engineering Company, DETROIT TOOL AND ENGINEERING COMPANY, a Delaware
corporation ("Engineering"), DETROIT TOOL METAL PRODUCTS CO., a
Missouri corporation, ("Metal Products"), SENCORP SYSTEMS, INC., a
Delaware corporation ("Sencorp"), PHARMA GROUP, INC. a Delaware
corporation, formerly known as Stokes-Merrill Corporation ("PGI"),
ADVANCED ASSEMBLY AUTOMATION, INC., an Ohio corporation ("AAA"), DT
CANADA INC., a New Brunswick, Canada corporation ("DT Canada"), KALISH
CANADA INC., a New Brunswick, Canada corporation ("Kalish Canada") and
MID-WEST AUTOMATION ENTERPRISES, INC., an Illinois corporation
("Mid-West Enterprises") (DTI, Engineering, Metal Products, Sencorp,
PGI, AAA, DT Canada, Kalish Canada and Mid-West Enterprises) referred
to herein both collectively and individually as "Borrower"), THE
BOATMEN'S NATIONAL BANK OF ST. LOUIS ("Boatmen's"), as "Administrative
Agent", "Co-Arranger" and as a "Lender", DRESDNER BANK AG, NEW YORK AND
GRAND CAYMAN BRANCHES ("Dresdner"), as "Co-Arranger", and as a "Lender"
and Boatmen's, Dresdner and the additional lenders listed on the
signature pages hereof, as "Lenders".
RECITALS:
A. DTI, Engineering, Metal Products, Sencorp, PGI and AAA and the
Prior Lenders entered into that certain Loan Agreement dated as of
August 16, 1995 (the "Initial Loan Agreement").
B. The Initial Loan Agreement has been amended by amendment
numbers one through five (collectively, the "Amendments", and together
with the Initial Loan Agreement, the "Original Loan Agreement").
C. As a result of certain acquisitions reflected in the
Amendments, DT Canada and Kalish Canada became obligated as borrowers
under the Original Loan Agreement and Armac Industries Co. ("Armac")
and Assembly Machines, Inc. ("AMI") became obligated as guarantors of
the obligations of the borrowers under the Original Loan Agreement.
D. There is currently outstanding under the Original Loan
Agreement certain indebtedness of Borrower to the Prior Lenders (the
"Prior Senior Indebtedness"). The Prior Senior Indebtedness is being
acquired by, and allocated among, the Lenders, pro rata in accordance
with the terms of this Agreement.
E. Borrower and Guarantors have requested that the Original Loan
Agreement be amended and restated to provide funds for the acquisition
of Mid-West Enterprises, and its wholly-owned subsidiary, Mid-West
Automation Systems, Inc. ("Mid-West Systems", and for other purposes,
as set forth herein.
F. Lenders have agreed to amend and restate the Original Loan
Agreement, subject to the terms and conditions set forth herein.
AGREEMENT
Therefore, in consideration of the mutual agreements herein
and other sufficient consideration, the receipt of which is hereby
acknowledged, Borrower, Administrative Agent and Lenders hereby agree
as follows:
1. Effective Date. This Agreement shall become effective on July
19, 1996 (the "Effective Date") as an amendment and restatement of the
Original Loan Agreement.
<PAGE>
2. Definitions and Rules of Construction.
2.1. Definitions. Each capitalized term in this Agreement
shall have the meaning defined in the Glossary and Index of Defined
Terms (the "Glossary") which is ttached hereto as Exhibit 2.1. If a
capitalized term is not defined in the Glossary, it shall have the
meaning as defined elsewhere in this Agreement. If a capitalized term
is not defined in either the Glossary or elsewhere in this Agreement,
it shall have the meaning as defined in the UCC.
2.2. References to Borrower, Canadian Borrower and
Borrower's Representative. The term "Borrower" herein refers to DTI,
Engineering, Metal Products, Sencorp, PGI, AAA, DT Canada, Kalish
Canada and Mid-West Enterprises both separately and collectively,
except that DT Canada and Kalish Canada are Borrowers only with respect
to the Aggregate Canadian Term Loan and the indebtedness and
obligations thereunder. The words "a Borrower", "any Borrower", "each
Borrower" and "every Borrower" refer to each of DTI, Engineering, Metal
Products, Sencorp, PGI, AAA, DT Canada, Kalish Canada and Mid-West
Enterprises separately, except that such terms refer to DT Canada and
Kalish Canada only with respect to the Aggregate Canadian Term Loan and
the indebtedness and obligations thereunder. The term "Canadian
Borrowers" refers to DT Canada and Kalish Canada. The obligations of
each Borrower (other than the Canadian Borrowers) under the Loan
Documents are joint and several with respect to all of the Loan
Documents. The obligations of the Canadian Borrowers are joint and
several with respect to the Indebtedness and obligations under the
Aggregate Canadian Term Loan. The term "Borrower's Representative"
herein refers to DTI, which is hereby appointed as the agent and
attorney-in-fact for every Borrower and has full power and authority to
perform every act that Borrower's Representative is herein required or
permitted to do. Every such act of Borrower's Representative may be
relied upon by Administrative Agent and Lenders as an act authorized
and directed by every Borrower.
2.3. References to Covered Person. The term "Covered
Person" means each Borrower, and if any of them now has or acquires any
Subsidiaries, each of such Subsidiaries. The words "a Covered Person",
"any Covered Person", "each Covered Person" and "every Covered Person"
refer to each Borrower, and each of their respective Subsidiaries,
separately.
2.4. References to Required Lenders. The term "Required
Lenders" means any one or more Lenders whose shares of the Lenders'
Exposure at the relevant time aggregate at least 66 2/3%.
2.5. Accounting Terms; Consolidated Basis. Unless the
context otherwise requires, accounting terms herein that are not
defined herein shall be calculated under GAAP. All financial
measurements herein respecting "Borrower" shall be made and calculated
for each Borrower and all of their Subsidiaries, if any, unless
otherwise expressly provided otherwise herein, on a consolidated basis
in accordance with GAAP.
2.6. "Satisfactory". Wherever herein a document or matter
is required to be satisfactory either to Administrative Agent, a
Lender, Required Lenders or the Lenders, unless expressly stated
otherwise such document must be satisfactory to Administrative Agent,
such Lender, Required Lenders or Lenders (as applicable) in both form
and substance, and unless expressly stated otherwise they shall have
the absolute discretion to determine whether the document or matter is
satisfactory.
2.7. Computation of Time Periods. In the computation of
periods of time from a specified date to a later specified date, the
word "from" shall mean "from and including" and the words "to" and
"until" shall each mean "to but excluding". Periods of days referred
to in this Agreement shall be counted in calendar days unless Business
Days are expressly prescribed, and references in this Agreement to
months and years shall be to calendar months and calendar years unless
otherwise specified.
2
<PAGE>
2.8. General. Unless the context of this Agreement
clearly requires otherwise: (i) references to the plural include the
singular and vice versa; (ii) references to any Person include such
Person's successors and assigns but, if applicable, only if such
successors and assigns are permitted by this Agreement; (iii)
references to one gender include all genders; (iv) "including" is not
limiting; (v) "or" has the inclusive meaning represented by the phrase
"and/or"; (vi) the words "hereof", "herein", "hereby", "hereunder" and
similar terms in this Agreement refer to this Agreement as a whole,
including its Exhibits, and not to any particular provision of this
Agreement; (vii) the word Section or section and Page or page refer to
a section or page, respectively, and the word "Exhibit" refers to an
Exhibit to this Agreement unless it expressly refers to something else;
(viii) reference to any agreement (including this Agreement), document
or instrument means such agreement, document or instrument as amended
or modified and in effect from time to time in accordance with the
terms thereof and, if applicable, the terms hereof; and (ix) general
and specific references to any Law means such Law as amended, modified,
codified or reenacted, in whole or in part, and in effect from time to
time. Section captions and the Table of Contents are for convenience
only and shall not affect the interpretation or construction of this
Agreement or the other Loan Documents.
3. Lenders' Commitments. Subject to the terms and conditions
hereof, and in reliance upon the representations and warranties of
Borrower herein, Lenders make the following commitments to Borrower:
3.1. Revolving Commitments.
3.1.1. Revolving Advances. Subject to the limitations in
Section 3.1.2 and elsewhere herein, each of the Lenders commits to make
available for advances to Borrower (each a "Revolving Advance") from
time to time during the period commencing on the Effective Date and
ending at the close of business on the fifth anniversary of the
Effective Date (the "Revolver Maturity Date") such Lender's prorata
share of the Aggregate Revolving Commitment as listed on Exhibit 3
hereto. The "Aggregate Revolving Commitment" on any date shall be
$55,000,000, or such lesser or greater Dollar amount to which it may
have been changed as provided herein. Each Lender's "Revolving
Commitment" is its prorata share of the Aggregate Revolving Commitment
as listed on Exhibit 3 hereto. (The from time to time outstanding
principal balance of all Revolving Advances from Lenders is referred to
herein as the "Aggregate Revolving Loan" and each Lender's prorata
share thereof is referred to herein as a "Revolving Loan".) The
obligation of Borrower to repay each Lender's Revolving Loan shall be
evidenced by a promissory note payable to the order of such Lender in a
maximum principal amount equal to such Lender's Revolving Commitment
and otherwise in the form attached hereto as Exhibit 3.1.1 (individually
a "Revolving Note" and collectively the "Revolving Notes") satisfactory
to such Lender. Subject to the limitations in Section 3.1.2 and
elsewhere herein, amounts applied to reduce the Aggregate Revolving Loan
may be reborrowed as Revolving Advances. At any time after an Event of
Default occurs, the Aggregate Revolving Commitment may be canceled as
provided in Section 18.3.
3.1.2. Limitation on Revolving Advances. No Revolving
Advance will be made which would result in the Aggregate Revolving Loan
exceeding the Maximum Available Amount and no Revolving Advance will be
made on or after the Revolver Maturity Date. Lenders may, however, in
their absolute discretion, make such Revolving Advances, but shall not
be deemed by doing so to have increased the Maximum Available Amount
and shall not be obligated to make any such Revolving Advances
thereafter. The "Maximum Available Amount" on any date for any
Revolving Advance shall be a Dollar amount equal to (i) the lesser of
the Aggregate Revolving Commitment or the Borrowing Base on such date,
minus (ii) the sum of (a) 100% of the Lenders' Letter of Credit
Exposure (except to the
3
<PAGE>
extent that such Revolving Advance will be used immediately to reimburse
Letter of Credit Issuer for unreimbursed draws on a Letter of Credit),
(b) the Swingline Loan, and (c) the sum of (1) the amount, if any by
which the Dollar equivalent of the sum of the Swiftpack Letter of Credit
Available Amount plus all amounts drawn on the Swiftpack Letter of
Credit and not reimbursed by Borrower exceeds $21,000,000. For purposes
of calculating the Maximum Available Amount only, the Lenders' Letter of
Credit Exposure shall not be deemed to include the Swiftpack Letter of
Credit except as set forth in clause (c) above.
3.1.3. Borrowing Base. The "Borrowing Base" on any date for
any Revolving Advance or any Swingline Advance shall be the sum of:
3.1.3.1. Eighty-five percent (85%) of the total outstanding
principal balance of Eligible Accounts as of the close of business on
such date, or as certified in the Borrowing Base Certificate most
recently furnished to Administrative Agent as required in Section
15.15.1, whichever is less; plus
3.1.3.2. An amount equal to 65% of
(i) the value of Eligible Inventory as of the close of
business on suchdate, or as certified in the Borrowing
Borrowing Base Certificate most recently furnished to
Administrative Agent as required in Section 15.15.1,
whichever is less, plus Costs and Estimated Earnings
in Excess of Amounts Billed, as such amount would be
shown in Borrower's financial statements, exclusive of
the earnings component thereof;
minus
(ii) the total of all customer advances and deposits,
as such amount would be shown in Borrower's financial
statements.
All Inventory shall be valued at the lower of cost or market
on a first-in-first-out basis.
3.2. Swingline Commitment.
3.2.1. Swingline Advances. In order to reduce the frequency
of the transfer of funds from Lenders to Administrative Agent for
making Revolving Advances, but subject to the limitations in Section
3.2.2 and elsewhere herein, Boatmen's may in its absolute discretion
make advances (each a "Swingline Advance") to Borrower from time to
time during the period commencing on the Effective Date and ending at
the close of business on the Revolver Maturity Date (the "Swingline
Commitment"); provided, however, that Boatmen's shall make no Swingline
Advance if there is pending an Existing Default, Default, or Event of
Default and Boatmen's has received written notice from the Required
Lenders directing it to make no further Swingline Advances. (The from
time to time outstanding principal balance of all Swingline Advances
from Boatmen's is referred to herein as the "Swingline Loan".) The
obligation of Borrower to repay the Swingline Loan shall be evidenced
by a promissory note payable to the order of Boatmen's in a maximum
principal amount equal to $5,000,000 and otherwise in the form attached
hereto as Exhibit 3.2 (the "Swingline Note") satisfactory to Boatmen's.
Subject to the limitations in Section 3.2.2 and elsewhere herein,
amounts
4
<PAGE>
applied to reduce the Swingline Loan may be reborrowed as Swingline
Advances. Boatmen's may terminate the Swingline Commitment at any time
in its absolute discretion.
3.2.2. Limitations on Swingline Advances. Boatmen's shall
not be obligated to make any particular Swingline Advance, the making
of any particular Swingline Advance at any particular time being
absolutely discretionary. In any event, no Swingline Advance will be
made on or after the Revolver Maturity Date, and no Swingline Advance
will be made which would result in the Swingline Loan exceeding the
Maximum Swingline Amount. The "Maximum Swingline Amount" on any date
for any Swingline Advance shall be a Dollar amount equal to the lesser
of (i) $5,000,000 or (ii) an amount equal to the Maximum Available
Amount as of such date minus the Revolving Loan immediately prior to
any such Swingline Advance.
3.3. Term Commitment. Each Lender commits to make a term
loan to Borrower (its "Term Commitment") in the amount of its prorata
share of $94,000,000 (the "Aggregate Term Commitment") as listed on
Exhibit 3 hereto in a single advance by each Lender (the aggregate of
all such advances being referred to herein as the "Term Advance").
(The from time to time outstanding principal amount of the Term Advance
is referred to herein as the "Aggregate Term Loan" and each Lender's
prorata share thereof is referred to herein as a "Term Loan".) The
obligation of Borrower to repay each Lender's prorata share of the
Aggregate Term Loan shall be evidenced by a promissory note payable to
the order of such Lender in a principal amount equal to such Lender's
prorata share of the Aggregate Term Commitment and otherwise in
substantially the form attached hereto as Exhibit 3.3 (individually a
"Term Note" and collectively the "Term Notes"). Amounts applied to
reduce the Aggregate Term Loan may not be reborrowed.
3.4. Canadian Term Commitment. Each Lender commits to
make a term loan to the Canadian Borrowers (its "Canadian Term
Commitment") in the amount of its prorata share of $10,000,000 (the
"Aggregate Canadian Term Commitment") as listed on Exhibit 3 hereto in a
single advance by each Lender (the aggregate of all such advances being
referred to herein as the "Canadian Term Advance"). (The from time to
time outstanding principal amount of the Canadian Term Advance is
referred to herein as the "Aggregate Canadian Term Loan" and each
Lender's prorata share thereof is referred to herein as a "Canadian
Term Loan".) The obligation of Canadian Borrowers to repay each
Lender's prorata share of the Aggregate Canadian Term Loan shall be
evidenced by a promissory note payable to the order of such Lender in a
principal amount equal to such Lender's prorata share of the Aggregate
Canadian Term Commitment and otherwise in substantially the form
attached hereto as Exhibit 3.4 (individually a "Canadian Term Note" and
collectively the "Canadian Term Notes"). Amounts applied to reduce the
Aggregate Canadian Term Loan may not be reborrowed.
3.5. Post-Offering Acquisition Loan Commitment. Subject
to the limitations in Section 3.7, each Lender commits to make available
a term loan facility to Borrower (its "Post-Offering Acquisition Loan
Commitment") in an amount equal to the Term Loan Equity Prepayment (the
"Aggregate Post-Offering Acquisition Loan Commitment") in one or more
advances by Lenders in accordance with their prorata shares of the
Aggregate Post-Offering Acquisition Loan Commitment as listed on
Exhibit 3 hereto (each advance by a Lender being referred to herein as a
"Post-Offering Acquisition Advance"). Borrower may request
Post-Offering Acquisition Advances solely for purposes of making
Permitted Acquisitions from time to time during the period commencing
on the Post-Offering Acquisition Loan Availability Date and ending at
the close of Administrative Agent's business at the Lending Office one
year after the Post-Offering Acquisition Loan Availability Date.
Except for Post-Offering Acquisition Advances made within 90 days after
the consummation of a Permitted Acquisition for the purpose of paying
the post-closing expenses and fees incurred in connection with such
acquisition, no Post-Offering Acquisition Advance will be made after
the expiration of the Post-Offering Acquisition Loan Availability
Period. (The
5
<PAGE>
from time to time outstanding principal amount of all Post-Offering
Acquisition Advances from Lenders is referred to herein as the
"Aggregate Post-Offering Acquisition Loan" and each Lender's prorata
share thereof is referred to herein as a "Post-Offering Acquisition
Loan".) No Post-Offering Acquisition Advance will be made which would
result in the Aggregate Post-Offering Acquisition Loan exceeding the
Post-Offering Acquisition Loan Commitment. The obligation of Borrower
to repay each Lender's prorata share of the Aggregate Post-Offering
Acquisition Loan shall be evidenced by a promissory note payable
to the order of such Lender in a principal amount equal to its prorata
share of the Aggregate Post-Offering Acquisition Loan Commitment and
otherwise in the form attached hereto as Exhibit 3.5 (individually a
"Post-Offering Acquisition Note" and collectively the "Post-Offering
Acquisition Notes"). Amounts applied to reduce the Aggregate Post-
Offering Acquisition Loan may not be reborrowed.
3.6. Extension of Post-Offering Acquisition Loan
Commitment. If at the end of the Post-Offering Acquisition Loan
Availability Period, (i) there is remaining availability under the
Aggregate Post-Offering Acquisition Loan Commitment and (ii) there is
no Existing Default, Borrower may at its option extend the
Post-Offering Acquisition Loan Availability Period through the second
anniversary of the Post-Offering Acquisition Loan Availability Date by
providing written notice of such election to Administrative Agent
within 30 days prior to the original expiration date of the
Post-Offering Acquisition Loan Availability Period.
3.7. Determination of Post-Offering Acquisition Loan
Amount. If, within one year after the Effective Date, Borrower issues
equity securities in a minimum amount of $50,000,000 and makes a
prepayment on the Aggregate Term Loan with the net proceeds thereof,
the Aggregate Post-Offering Acquisition Loan Commitment shall, as of
the date of such prepayment, be an amount equal to the Term Loan Equity
Prepayment. Until Borrower makes such prepayment, the Aggregate
Post-Offering Acquisition Loan Commitment shall be zero Dollars. In
addition, no Post-Offering Acquisition Advances will be made until
after the Aggregate General Acquisition Loan Commitment has been fully
drawn pursuant to clause (ii) of Section 3.8.
3.8. General Acquisition Loan Commitment. Subject to
Borrower's satisfaction of the terms of Sections 11.3 through 11.11,
each Lender commits to make available a term loan facility to Borrower
(its "General Acquisition Loan Commitment") in the amount of its prorata
share of up to $20,000,000 (the "Aggregate General Acquisition Loan
Commitment") in one or more advances by Lenders in accordance with
their prorata shares of the Aggregate General Acquisition Loan
Commitment as listed on Exhibit 3 hereto (each advance by a Lender being
referred to herein as a "General Acquisition Advance"). Borrower may
request General Acquisition Advances solely for the purposes of (i)
paying the portion of the cost of the acquisition of Mid-West
Enterprises and Mid-West Systems that is equal to cash on the balance
sheets of Mid-West Enterprises and Mid-West Systems as of the closing
date of such acquisition, and (ii) making subsequent Permitted
Acquisitions and paying the post closing costs of such subsequent
acquisitions. General Acquisition Advances for the purpose of clause
(i) above shall be Alternate Base Rate Advances. The General
Acquisition Loan Commitment shall be available during the period
commencing on the Effective Date and ending at the close of
Administrative Agent's business at the Lending Office on the General
Acquisition Expiration Date. Except for General Acquisition Advances
made within 90 days after the consummation of a Permitted Acquisition
for the purpose of paying the post-closing expenses and fees incurred
in connection with such acquisition, no General Acquisition Advance
will be made after General Acquisition Expiration Date. (The from time
to time outstanding principal amount of all General Acquisition
Advances from Lenders is referred to herein as the "Aggregate General
Acquisition Loan" and each Lender's prorata share thereof is referred
to herein as a "General Acquisition Loan".) No General Acquisition
Advance will be made which would result in the Aggregate General
Acquisition Loan exceeding the General Acquisition Loan Commitment.
The obligation of Borrower to repay each Lender's prorata share of the
Aggregate General Acquisition Loan shall be evidenced by a promissory
note payable to the order of such Lender in a principal amount equal to
its prorata share of the
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<PAGE>
Aggregate General Acquisition Loan Commitment and otherwise in the form
attached hereto as Exhibit 3.8 (individually a "General Acquisition
Note" and collectively the "General Acquisition Notes"). After all
payments required by Section 6.3.3 have been made and the Aggregate
General Acquisition Loan has been paid down to zero, the Aggregate
General Acquisition Loan Commitment shall automatically return to
$20,000,000. Except as provided in the immediately preceding sentence,
amounts applied to reduce the Aggregate General Acquisition Loan may not
be reborrowed.
3.9. Letter of Credit Commitment. Boatmen's commits to
issue Standby Letters of Credit and Commercial Letters of Credit for
the account of Borrower from time to time during the period commencing
on the Effective Date and ending on the Revolver Maturity Date, but
only in connection with transactions satisfactory to Administrative
Agent and only if the Letter of Credit Exposure pursuant to this
Section 3.9 will not as a result of such issuance exceed the lesser of
(a) $5,000,000, and (b) any excess of the Maximum Available Amount over
the Aggregate Revolving Loan the "Letter of Credit Commitment"). The
expiration date of any Letter of Credit other than the Canadian Letter
of Credit and the Swiftpack Letter of Credit will not be more than one
year after its issuance date and in no event will be later than the
Revolver Maturity Date. Immediately upon the issuance by Letter of
Credit Issuer of a Letter of Credit in accordance with the terms and
conditions of this Agreement, Letter of Credit Issuer shall be deemed
to have sold and transferred to each other Lender, and each such other
Lender shall be deemed to have purchased and received from Letter of
Credit Issuer, a prorata undivided interest and participation in such
Letter of Credit, the reimbursement obligation of Borrower with respect
thereto, and any guaranty thereof or collateral therefor. Such other
Lender's prorata undivided interest shall be the same as such other
Lender's prorata share of the Aggregate Revolving Commitment.
3.10. Existing Letters of Credit.
3.10.1. Canadian Letter of Credit. Boatmen's has previously
issued a Letter of Credit for the account of Borrower in connection
with a revolving loan made by NBD Bank, Canada to Kalish Canada (the
"Canadian Letter of Credit") to secure the Indebtedness of Kalish
Canada under such loan facility in the face amount of $3,060,000
(Cdn.). The expiration date of the Canadian Letter of Credit will not
be later than the maturity date of the revolving loan made by NBD Bank,
Canada and in no event will be later than the Revolver Maturity Date.
Immediately upon the date that any Person becomes a Lender hereunder,
Boatmen's and each Lender hereunder shall be deemed to have sold and
transferred to such other Lender, and each such other Lender shall be
deemed to have purchased and received from the other Lenders, a prorata
undivided interest and participation in the Canadian Letter of Credit,
the reimbursement obligation of Borrower with respect thereto, and any
guaranty thereof or collateral therefor. Each Lender's prorata
undivided interest in the foregoing shall be the same as such Lender's
prorata share of the Aggregate Revolving Commitment.
3.10.2. Swiftpack Letter of Credit. Boatmen's has previously
issued a Letter of Credit (the "Swiftpack Letter of Credit") in the
face amount of pound sterling 13,500,000 for the account of Borrower
in connection with, and as security for, the Dresdner UK Loan. The
expiration date of the Swiftpack Letter of Credit will be such date as
is acceptable to Dresdner UK, but in no event later than December 31,
2000. The maximum amount available for draws under the Swiftpack Letter
of Credit reduces automatically and permanently in accordance with its
terms by the amount of each drawing made thereon. Immediately upon the
date that any Person becomes a Lender hereunder, Boatmen's and each
Lender hereunder shall be deemed to have sold and transferred to such
other Lender, and each such other Lender shall be deemed to have
purchased and received from the other Lenders, a prorata undivided
interest and participation in the Swiftpack Letter of Credit, the
reimbursement
7
<PAGE>
obligation of Borrower with respect thereto, and any guaranty thereof
or collateral therefor. Each Lender's prorata undivided interest in the
foregoing shall be the same as such Lender's prorata share of the
Aggregate Revolving Commitment.
3.10.2.1. Subrogation Agreement. In connection with
the Swiftpack Letter of Credit, Administrative Agent, on behalf of the
Prior Lenders, entered into the Subrogation Agreement with Dresdner
UK. Immediately upon the date that any Person becomes a Lender
hereunder, Boatmen's and each Lender hereunder shall be deemed to have
sold and transferred to such other Lender, and each such other Lender
shall be deemed to have purchased and received from the other Lenders,
a prorata undivided interest and participation in the Subrogation
Agreement, and all rights and obligations thereunder. Each Lender
agrees to reimburse Administrative Agent such Lender's prorata share of
any payments Administrative Agent is required to make under the terms
of the Subrogation Agreement. Each Lender's prorata undivided interest
in the foregoing shall be the same as such Lender's prorata share of
the Aggregate Revolving Commitment.
4. Interest; Yield Protection.
4.1. Interest on Loans. Each Loan other than the
Swingline Loan shall bear interest at a rate per annum that is either
the Alternate Base Rate or the Adjusted LIBO Rate, as designated by
Borrower as provided herein. The Swingline Loan shall bear interest at
the Alternate Base Rate. Each LIBOR Loan shall bear interest at the
Adjusted LIBO Rate throughout the Interest Period for such Loan. All
payments made pursuant to the provisions of Sections 4.10 and 4.11
hereof shall be deemed to be interest payments.
4.2. Interest on Draws on Letters of Credit. Borrower
shall pay interest on the unreimbursed amount of each draw on a Letter
of Credit at a rate per annum equal to the then current Alternate Base
Rate.
4.3. Definitions of Alternate Base Rate and Adjusted LIBO
Rate.
4.3.1. The Alternate Base Rate. The "Alternate Base Rate"
shall be the Corporate Base Rate plus the applicable increment (the
"CBR Increment") from the table in Section 4.4.
4.3.2. Adjusted LIBO Rate. The "Adjusted LIBO Rate" shall
be the LIBO Rate plus the applicable increment (the "LIBOR Increment")
from the table in Section 4.4. The "LIBO Rate" shall be the interest
rate per annum equal to the quotient (rounded to the nearest 0.001%) of
(i) the rate at which Dollar deposits in immediately available
funds, approximately equal in amount to the applicable portion
of the Loan which is a LIBOR Loan and for a maturity equal to
the applicable Interest Period, are offered or available in
the London Interbank Market for Eurodollars as of 11:00 a.m.
(London time) two Business Days before the applicable Advance
Date or Conversion Date, as reported on Telerate Screen LIBO
page 3750,
divided by
8
<PAGE>
(ii) a number equal to one minus the decimal equivalent of the
aggregate of the maximum rates during the applicable Interest
Period of all reserve requirements (including, without
limitation, marginal, emergency, supplemental and special
reserves), established by the FRB or any other Governmental
Authority to which any Lender is subject, in respect of
"Eurocurrency liabilities" as referred to in Regulation D,
including but not limited to those imposed under Regulation
D. (The amount of every LIBOR Loan shall be deemed to
constitute a Eurocurrency liability and as such shall be
deemed to be subject to such reserve requirements without
benefit of credits for proration, exceptions or offsets which
may be available from time to time to any Lender under
Regulation D.) The LIBO Rate shall be adjusted automatically
on and as of the effective date of any change in any such
reserve requirements.
4.4. CBR Increments and LIBOR Increments. Prior to a
prepayment of the Aggregate Term Loan from the proceeds of the issuance
of equity securities, the CBR and LIBOR Increments shall be as follows:
<TABLE>
<CAPTION>
Ratio of Borrower's CBR Increment LIBOR Increment
Indebtedness to Operating
Cash Flow
<C> <C> <C>
less than 1.00 to 1.00 0.00% 0.75%
equal to or greater than 0.00% 1.00%
1.00 to 1.00 but less
than 1.5 to 1.00
equal to or greater than 0.00% 1.25%
1.50 to 1.00 but less
than 2.00 to 1.00
equal to or greater than 0.00% 1.50%
2.00 to 1.00 but less
than 2.50 to 1.00
equal to or greater than 0.25% 1.75%
2.50
</TABLE>
Beginning on the first day of the first full calendar month after
Borrower has made a principal prepayment of not less than $50,000,000
on the Aggregate Term Loan from the proceeds of the issuance of equity
securities, the CBR and LIBOR Increments shall be as follows:
<TABLE>
<CAPTION>
Ratio of Borrower's CBR Increment LIBOR Increment
Indebtedness to Operating
Cash Flow
<C> <C> <C>
less than 1.50 to 1.00 0.00% 0.75%
equal to or greater than 0.00% 1.00%
1.50 to 1.00 but less
than 2.00 to 1.00
equal to or greater than 0.00% 1.25%
2.00 to 1.00 but less
than 2.50 to 1.00
equal to or greater than 0.00% 1.50%
2.50
</TABLE>
For purposes of calculating the CBR Increment and the LIBOR Increment,
Operating Cash Flow shall be calculated as of the end of each fiscal
quarter for the four fiscal quarters then ended based on the Adjusted
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<PAGE>
Operating Cash Flow set forth in the Financial Statements provided to
Administrative Agent as required under Section 15.14.
The LIBOR Increment for each LIBOR Loan shall be determined quarterly.
Such determination shall be made ten days after Borrower delivers its
Financial Statements for a fiscal quarter to Administrative Agent, but
shall not be effective as to any existing LIBOR Loan until and unless
it is renewed as a LIBOR Loan.
The CBR Increment for each CBR Loan shall be determined quarterly, ten
days after Borrower delivers its Financial Statements for a fiscal
quarter to Administrative Agent and shall become effective for all CBR
Loans immediately.
If Borrower does not deliver its quarterly Financial Statements to
Administrative Agent within the period required by Section 15.14.2, and
such failure continues for 2 Business Days after notice from
Administrative Agent, the highest possible CBR Increment and LIBOR
Increment shall become applicable as of the last day of such period
and shall remain applicable until Borrower delivers such Financial
Statements to Administrative Agent.
4.5. Interest Periods for LIBOR Loans. For each Loan that
Borrower designates to be a LIBOR Loan, Borrower shall select an
interest period (each an "Interest Period") to be applicable to such
Loan. The Interest Period for a LIBOR Loan shall be either a one-,
two-, three-, or six-month period; provided that:
(i) every such Interest Period for an Advance shall commence
on the date of the Advance;
(ii) if any Interest Period would otherwise expire on a day of
a calendar month which is not a Business Day, then such
Interest Period shall expire on the next succeeding Business
Day in that calendar month; provided, however, that if the
next succeeding Business Day would be in the following
calendar month, it shall expire on the first preceding
Business Day;
(iii) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end
of such Interest Period) shall end on the last Business Day of
a calendar month;
(iv) no Interest Period for a Revolving Loan shall extend
beyond the Revolver Maturity Date, and no Interest Period for
a Term Loan or Canadian Term Loan shall extend beyond the Term
Maturity Date; and
(v) no Interest Period for a Term Loan or Canadian Term Loan
may extend beyond a date on which the Borrower is required to
make a scheduled principal payment on the Aggregate Term Loan
or Aggregate Canadian Term Loan unless the aggregate amount of
all other Term Loans or Canadian Term Loans that are Alternate
Base Rate Loans or that have Interest Periods expiring on or
before such date equals or exceeds the amount of the scheduled
principal payment.
4.6. Conversion of Loans. Borrower may (i) at any time
convert a Loan of one type into a Loan of another type, or (ii) at the
end of any Interest Period for a LIBOR Loan, continue such LIBOR Loan
for an additional Interest Period; provided, however, that a LIBOR Loan
may only be so converted or continued on the last day of its Interest
Period; and provided, further, that the Swingline Loan may not be
converted into LIBOR Loans. To cause a conversion or continuation,
Borrower shall give Administrative Agent, prior to 11:00 a.m., St.
Louis time, two (2) Business Days prior to the date the conversion or
continuation is to be effective (the "Conversion Date"), a written
request (which may be
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<PAGE>
mailed, personally delivered or telecopied as provided in Section 21.1)
(a "Notice of Conversion/Continuation") (i) identifying the Loan to
be converted or continued, (ii) specifying whether a conversion or
continuation is requested, (iii) in the case of a conversion, specifying
whether the Adjusted LIBOR Rate or the Alternate Base Rate is to be
applicable to the Loan upon the conversion, and (iv) in the case of
conversion to or continuation of a LIBOR Loan, specifying the Interest
Period therefor. If a Notice of Conversion/Continuation is not made by
11:00 a.m. St. Louis time on the last day of the Interest Period for a
Loan with a Base Rate for which an Interest Period must be specified,
then Borrower shall be deemed to have timely given a Notice of
Conversion/Continuation to Administrative Agent requesting to convert
the Loan to an Alternate Base Rate Loan.
4.7. Time of Accrual. Interest shall accrue on all
principal amounts outstanding from and including the date when first
outstanding to but excluding the date when no longer outstanding.
Amounts shall be deemed outstanding until payments are applied thereto
as provided herein.
4.8. Computation. Interest shall be computed for the
actual days elapsed over a year deemed to consist of 360 days.
Interest rates that are based on the Corporate Base Rate shall change
simultaneously with any change in the Corporate Base Rate and such
rates shall be effective for the entire day on which such Corporate
Base Rate change becomes effective.
4.9. Rate After Maturity. Borrower shall pay interest on
each Loan after its Maturity, and (at the option of Lenders) upon each
of the Loans and the other Loan Obligations after the occurrence of an
Event of Default, at a rate per annum of 2% in excess of the rate
which would otherwise apply hereunder, such rate to change
simultaneously with any change in the Alternate Base Rate or the
Adjusted LIBO Rate, as applicable.
4.10. Taxes.
4.10.1. Net Payments. If any Tax is required to be withheld
or deducted from, or is otherwise payable by Borrower in connection
with, any payment due to Administrative Agent or any Lender under the
Loan Documents, Borrower (i) shall, if required, withhold or deduct the
amount of such Tax from such payment and, in any case, pay such Tax to
the appropriate taxing authority in accordance with applicable Law and
(ii) shall pay to Administrative Agent or such Lender, as applicable,
(a) such additional amounts as may be necessary so that the net amount
received by Administrative Agent or such Lender with respect to such
payment, after withholding or deducting all Taxes required to be
withheld or deducted, is equal to the full amount payable under the
Loan Documents and (b) an amount equal to all Taxes payable by
Administrative Agent or such Lender as a result of payments made by
Borrower (whether to a taxing authority or to Administrative Agent or
such Lender) pursuant to this Section. If any Tax is withheld or
deducted from, or is otherwise payable by Borrower in connection with,
any payment due to Administrative Agent or any Lender under the Loan
Documents, Borrower shall, within 30 days after the date of such
payment, furnish to Administrative Agent or such Lender, as applicable,
the original or a certified copy of a receipt for such Tax from the
applicable taxing authority. If any payment due to Administrative
Agent or any Lender under the Loan Documents is or is expected to be
made without withholding or deducting therefrom, or otherwise paying in
connection therewith, any Tax payable to any taxing authority under
circumstances that would lead Administrative Agent or such Lender to
reasonably believe such withholding or deduction is required, Borrower
shall, within 30 days after any request from Administrative Agent or
such Lender, as applicable, furnish to Administrative Agent or such
Lender a certificate from such taxing authority, or an opinion of
counsel acceptable to Administrative Agent or such Lender, in either
case stating that no Tax payable to such taxing authority was or is, as
the case may be,
11
<PAGE>
required to be withheld or deducted from, or otherwise paid by Borrower
in connection with, such payment. For purposes of this Section only,
the term "Tax" shall not be deemed to include any tax based upon net
income, such as but not limited to the tax on net income imposed under
the Internal Revenue Code of 1986, as amended, and similar state income
taxes.
4.10.2. Exemption Forms. Each Lender that is not a United
States person (as such term is defined in Section 7701(a)(30) of the
Code) agrees to deliver to Borrower and Agent on or prior to the
Effective Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section 20.4,
on the date of such assignment or transfer to such Lender, (i) two
accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such
Lender'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 Lender is not a "bank"
within the meaning of Section 881(c)(3)(A) of the Code (a "Non-bank
Lender") and cannot deliver either Internal Revenue Service Form 1001
or 4224, (x) a certificate substantially in the form of Exhibit 4.10.2
(each an "Exemption Certificate") and (y) two accurate and complete
original signed copies of Internal Revenue Service Form W-8 (or
successor form) certifying to such Lender'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 Lender agrees that from time to time after the Effective
Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect,
it will deliver to Borrower and Agent two new accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001,
or Form W-8 and an Exemption Certificate, as the case may be, and such
other forms as may be required in order to confirm or stablish the
entitlement of such Lender to a continued exemption from or reduction
in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify Borrower and
Agent of its inability to deliver any such Form or Certificate.
4.10.3. Exclusions From Gross-Up Obligations. Notwithstanding
anything to the contrary contained in Section 4.10.1, but subject to
the immediately succeeding sentence, (i) 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 Lender
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 Lender has not provided to Borrower U.S. Internal
Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (ii) Borrower shall not be obligated
pursuant to Section 4.10.1 hereof to gross-up payments to be made to a
Lender in respect of income or similar Taxes imposed by the United
States if (A) such Lender has not provided to Borrower the Internal
Revenue Service Forms required to be provided to Borrower pursuant to
Section 4.10.2 or (B) in the case of a payment, other than interest,
to a Non-bank Lender, 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 4.10, Borrower agrees to pay additional
amounts and to indemnify each Lender in the manner set forth in
Section 4.10.1 (without regard to the identity of the jurisdiction
requiring the deduction or withholding) in respect of any amounts
deducted or withheld by it as described in the immediately preceding
sentence as a result of any changes after the Effective Date in any
applicable law, treaty,
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<PAGE>
governmental rule, regulation, guideline or order, or in the inter-
pretation thereof, relating to the deducting or withholding of income
or similar Taxes.
4.11. Compensation for Increase In LIBOR Loan Costs. If
after the Execution Date there is any change in any Law or in any rule,
order, or guideline of any Governmental Authority (whether or not
having the force of law and whether or not failure to comply therewith
would be unlawful, and including but not limited to any imposition or
increase of reserve requirements) and as a result thereof or as a
result of compliance therewith by a Lender or its parent holding
company:
(i) such Lender is subject to any tax, duty or other
charge with respect to its LIBOR Loans or its
obligation to make Advances that are LIBOR Loans, or
the basis of taxation of payments to such Lender of
the principal of or interest on its LIBOR Loans, or
its obligation to make the same, change (except for
changes in the rate of tax on the overall net income
of such Lender imposed by the United States or other
jurisdiction in which such Lender's principal
executive office is located); or
(ii) any reserve (including, without limitation, any
imposed by the FRB), special deposit, compulsory
loan, assessment, or similar requirement against
assets of, deposits with or for the account of, or
credit extended by, such Lender is imposed or deemed
applicable or any other condition affecting its LIBOR
Loans or its obligation to make them is imposed on
such Lender or the London Interbank Market;
and as a result thereof there is any increase in the cost to such
Lender of agreeing to make or making an Advance that is a LIBOR Advance
or maintaining its LIBOR Loans (except to the extent already included
in the determination of the applicable LIBO Rate), or there is a
reduction in the amount received or receivable by such Lender, then
Borrower shall from time to time, upon written notice from and demand
by such Lender (with a copy of such notice and demand to Administrative
Agent), pay to such Lender, within five Business Days after the date
specified in such notice and demand, additional amounts sufficient to
compensate such Lender in the amount of such increased cost. If such
Lender claims compensation under this Section, such Lender shall
furnish a certificate to Borrower that states the additional amount or
amounts to be paid to it hereunder and the basis therefor. Borrower
shall have the burden of proving that any such certificate is not
correct.
4.12. LIBOR Loan Funding Losses. Borrower shall pay to any
Lender upon demand an amount sufficient to compensate such Lender for
all loss and expense suffered by such Lender, including but not limited
to loss of profit and the cost of acquiring funds to make or carry a
LIBOR Advance or LIBOR Loan, (i) if for any reason (other than a
default by such Lender or pursuant to Section 7.15 hereof) a Borrowing
does not occur on the date specified therefor in a Notice of Borrowing
(whether or not withdrawn), (ii) if any prepayment or repayment of a
LIBOR Loan or conversion of a LIBOR Loan to a Loan with a Base Rate
other than the LIBO Rate, whether or not required hereby, occurs on a
date which is not the last day of the Interest Period therefor, or
(iii) if for any reason Borrower fails to repay a LIBOR Loan when
required by the terms of this Agreement. The minimum that Borrower
shall be obligated to pay to such Lender in any such event shall be an
amount equal to (x) the greater of zero or
[Ax(B-C)xD]
-----------
360
wherein
"A" is the Affected Principal Amount;
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<PAGE>
"B" is the decimal equivalent of the LIBO Rate that is (or
would be in the case of Borrower's failure to borrow after
giving a Notice of Borrowing) payable by Borrower on such Loan;
"C" is the decimal equivalent of the LIBO Rate that would
apply to a hypothetical LIBOR Advance whose Borrowing Date
were on the last Business Day on or before the first day of
the Remaining Interest Period and whose amount and whose
Interest Period were approximately equal, as determined by
such Lender, to the Affected Principal Amount and the
Remaining Interest Period; and
"D" is the number of days from and including the first day of
the Remaining Interest Period to but excluding the last day of
the Remaining Interest Period;
plus (y) any other out-of-pocket loss or expense (including any
internal processing charge customarily charged by such Lender) suffered
by such Lender in liquidating deposits prior to maturity in amounts
which correspond to the Affected Principal Amount.
For purposes of this Section:
"Affected Principal Amount" means, as applicable, (i) the
principal amount of a LIBOR Advance that Borrower fails to
take after having given an Advance Request; (ii) the entire
principal amount of a LIBOR Loan that Borrower fails to repay
when required by the terms of this Agreement; or (iii) the
amount of any prepayment or repayment on a LIBOR Loan that
occurs, or the entire principal amount of a LIBOR Loan that
converts to a Loan with a Base Rate other than the LIBOR Rate,
whether or not required hereby, on a date which is not the
last day of the Interest Period therefor.
"Remaining Interest Period" means, as applicable, (i) the
entire Interest Period that would have been applicable to a
Loan that Borrower fails to take after having given an Advance
Request; (ii) a period equal in duration to the Interest
Period of a LIBOR Loan that Borrower fails to repay when
required by the terms of this Agreement; or (iii) if a
prepayment or repayment on a LIBOR Loan occurs, or a LIBOR
Loan converts to a Loan with a Base Rate other than the LIBOR
Rate, whether or not required hereby, prior to the last day of
the Interest Period therefor, the period from and including
the date thereof to but excluding the last day of such
Interest Period.
A certificate of a Lender claiming compensation under this Section and
setting forth the amounts to be paid to it hereunder and the method of
calculation thereof shall be deemed and treated as prima facie
correct. Any compensation payable by Borrower to a Lender under this
Section shall be payable without regard to whether such Lender has
funded its LIBOR Advances through the purchase of deposits in an amount
or of a maturity corresponding to the deposits used as a reference in
determining the LIBO Rate under Section 4.3.2.
4.13. Capital Adequacy Reimbursement. If after the
Execution Date there is any change of Law, or in any rule, order, or
guideline of any Governmental Authority (whether or not having the
force of law and whether or not failure to comply therewith would be
unlawful), regarding the capital that financial institutions in a class
that includes a Lender are required to maintain, and which has the
effect of reducing the rate of return on, or increasing the cost of
maintaining, such Lender's capital as a consequence of its obligations
hereunder, then such Lender may from time to time demand, and Borrower
shall pay to such Lender within fifteen days after each demand, such
additional amount as will compensate such Lender for such reduction or
increase. If a Lender claims compensation under this Section, such
Lender shall furnish a certificate to Borrower that states the
additional amount to be paid to it hereunder
14
<PAGE>
and includes a description of the method used by such Lender in
calculating such amount. Borrower shall have the burden of proving that
the amount of any such additional compensation calculated by a Lender is
not correct.
4.14. Usury. Notwithstanding any provisions to the
contrary in Section 4 or elsewhere in any of the Loan Documents,
Borrower shall not be obligated to pay interest at a rate which exceeds
the maximum rate permitted by Law. If, but for this Section 4.14,
Borrower would be deemed obligated to pay interest at a rate which
exceeds the maximum rate permitted by Law, or if any of the Loan
Obligations is paid or becomes payable before its originally scheduled
Maturity and as a result Borrower has paid or would be obligated to pay
interest at such an excessive rate, then (i) Borrower shall not be
obligated to pay interest to the extent it exceeds the interest that
would be payable at the maximum rate permitted by Law; (ii) if the
outstanding Loan Obligations have not been accelerated as provided in
Section 18.3.2, any such excess interest that has been paid by Borrower
shall be refunded; (iii) if the outstanding Loan Obligations have been
accelerated as provided in Section 18.3.2, any such excess that has been
paid by Borrower shall be applied to the Loan Obligations as provided
in Section 18.3.10; and (iii) the effective rate of interest shall be
deemed automatically reduced to the maximum rate permitted by Law.
5. Fees.
5.1. Upfront Fee to Co-Arrangers. Borrower shall pay each
Co-Arranger a one-time upfront fee (the "Upfront Fee") in the amount
set forth in, and in accordance with the terms of, the Fee Letter. No
additional upfront fee shall be paid in connection with the creation of
availability under the Aggregate Post-Offering Acquisition Loan
Commitment.
5.2. Commitment Fee to Lenders. Borrower shall pay to
Administrative Agent for the ratable account of Lenders a "Commitment
Fee" calculated by applying the daily equivalent of the Commitment Fee
Rate to the Unused Aggregate Commitment on each day during the period
from the Effective Date to the Revolver Maturity Date. The "Unused
Aggregate Commitment" on any day shall be an amount equal to (i) the
sum of the amounts of (a) the Aggregate Revolving Commitment, (b) the
Aggregate Term Commitment (minus all Term Advances), (c) the Aggregate
Canadian Term Commitment (minus all Canadian Term Advances), (d) the
Aggregate Post-Offering Acquisition Loan Commitment, and (e) the
Aggregate General Acquisition Loan Commitment minus (ii) the sum of the
amounts of (a) the Aggregate Revolving Loan plus (1) the Letter of
Credit Exposure and (2) the Swingline Loan, (b) the Aggregate General
Acquisition Loan, and (c) the Aggregate Post-Offering Acquisition
Loan. The Commitment Fee shall be payable quarterly in arrears,
commencing on the first day of the first calendar quarter beginning
after the Effective Date and continuing on the first day of each
calendar quarter thereafter and on the Revolver Maturity Date. The
"Commitment Fee Rate" shall be an annual rate equal to the applicable
rate in the table below:
<TABLE>
<CAPTION>
If Indebtedness to Operating Cash Flow Then the Commitment Fee Rate is:
is:
<C> <C>
greater than or equal to 2.00 to 1.00 0.375%
less than 2.00 to 1.00 .250%
</TABLE>
For purposes of calculating the Commitment Fee Rate, Operating Cash
Flow shall be calculated as of the end of each fiscal quarter for the
four fiscal quarters then ended based on the Adjusted Operating Cash
Flow set forth in the Financial Statements provided to Administrative
Agent as required under Section 15.14.
15
<PAGE>
5.3. Administrative Fee to Administrative Agent. Borrower
shall pay to Administrative Agent for its own account as Administrative
Agent an "Administrative Fee" in accordance with the terms of the Fee
Letter.
5.4. Letter of Credit Fees to Lenders. Borrower shall pay
to Administrative Agent for the ratable account of Lenders a
non-refundable fee for the Canadian Letter of Credit and each Letter of
Credit issued pursuant to Section 3.9 (and specifically excluding the
Swiftpack Letter of Credit) (the "Letter of Credit Fee") that shall be
calculated by applying the quarterly equivalent of the then applicable
LIBOR Increment to the undrawn amount of such Letter of Credit. The
Letter of Credit Fee for each such Letter of Credit shall be payable
quarterly in advance on the date of issuance and on the first day of
each calendar quarter thereafter so long as such Letter of Credit
remains outstanding.
5.5. Letter of Credit Fees to Administrative Agent as
Letter of Credit Issuer. Borrower shall pay to Administrative Agent
for its own account as the Letter of Credit Issuer such fees as and
when customarily charged by it to its customers for whose account it
issues letters of credit similar to the Letters of Credit, plus 1/4% of
the face amount of the Letter of Credit payable at issuance.
5.6. Special U.K. LC Fee. In connection with the
Swiftpack Letter of Credit, Dresdner UK is obligated to pay in pounds
sterling to Administrative Agent, for the ratable benefit of Lenders,
(quarterly in arrears on the last Business Day of each calendar
quarter, but if and only to the extent that Dresdner UK collects an
equivalent amount from DTUK), a special letter of credit fee calculated
by multiplying the quarterly equivalent of the applicable LIBOR
Increment hereunder by the "Maximum Available Amount" (as defined in
the Swiftpack Letter of Credit) under the Swiftpack Letter of Credit.
Promptly upon receipt of such payment from Dresdner UK, or in the
alternative, upon receipt of the payment received from DTI pursuant to
Section 5.7, Administrative Agent shall distribute such payment pro rata
to the Lenders.
5.7. DTUK Special LC Fee Backstop. In the event DTUK
fails to pay to Dresdner UK, as and when due, the "Special LC Fees"
payable with respect to the "Loan" and the "Loan Note Guaranty", as
such terms are defined in the Dresdner UK Credit Agreement, Borrower
shall on demand pay to Administrative Agent for the ratable benefit of
Lenders the Dollar equivalent of the amount in British Pounds
respecting such "Special LC Fees" which Administrative Agent would
otherwise have received from Dresdner UK as provided in the Subrogation
Agreement.
6. Payments.
6.1. Scheduled Payments on Revolving Loans and the
Swingline Loan.
6.1.1. Interest. Borrower shall pay interest accrued on
each Alternate Base Rate Loan that is a Revolving Loan and on the
Swingline Loan monthly in arrears beginning on the first Business Day
of the first calendar month following the Effective Date and continuing
on the first Business Day of each calendar month thereafter, and on the
Revolver Maturity Date. Borrower shall pay interest accrued on each
LIBOR Loan that is a Revolving Loan at the end of its Interest Period,
and in addition, for each LIBOR Loan with an Interest Period longer
than three months, Borrower shall pay interest on such LIBOR Loan
quarterly on the first Business Day of each calendar quarter following
the first day of such Interest Period. Borrower shall pay interest
accrued on each Revolving Loan and the Swingline Loan after the
Revolver Maturity Date on demand.
6.1.2. Principal.
16
<PAGE>
6.1.2.1. Daily Payments. Borrower shall maintain one or more
lockboxes with Administrative Agent under its standard lockbox
agreements or other institutions acceptable to Administrative Agent
(the "Lockboxes"). Administrative Agent will establish on its books an
account in the name of Borrower designated as the "Cash Collateral
Account". Borrower shall direct all Account Debtors to remit payments
on their Accounts to one or another of the Lockboxes. All proceeds of
Collateral and all funds Borrower receives directly (other than
Revolving Advances and Swingline Advances) shall be deposited in the
Cash Collateral Account. Collected funds in the Cash Collateral
Account on each Business Day, to the extent they do not exceed the
Swingline Loan on such Business Day, shall be remitted by
Administrative Agent to Boatmen's and applied by Boatmen's to reduce
the Swingline Loan. The collected funds remaining in the Cash
Collateral Account on every Wednesday (the "Settlement Date") after
such remittance and application to reduce the Swingline Loan, to the
extent they do not exceed the aggregate of the Alternate Base Rate
Revolving Loans on the Settlement Date, shall be remitted by
Administrative Agent to Lenders in accordance with their prorata shares
of the Revolving Commitment and applied by Lenders to reduce the
Alternate Base Rate Revolving Loans. Any collected funds still
remaining in the Cash Collateral Account after such remittances and
application to reduce the Swingline Loan and Alternate Base Rate
Revolving Loans on any date which is the last day of an Interest Period
for LIBOR Loans that are Revolving Loans shall be remitted by
Administrative Agent to Lenders in accordance with their prorata shares
of the respective Aggregate Commitments and applied by Lenders to
reduce such LIBOR Loans.
6.1.2.2. Payment on Revolver Maturity Date. Borrower shall
pay the entire amount of the Aggregate Revolving Loan on the Revolver
Maturity Date.
6.2. Scheduled Payments on Term Loan and Canadian Term
Loan.
6.2.1. Interest. Borrower shall pay interest accrued on
each Alternate Base Rate Loan that is a Term Loan or Canadian Term Loan
monthly in arrears, beginning on the first Business Day of the first
calendar month following the Effective Date, and continuing on the
first Business Day of each calendar month thereafter, and on the Term
Maturity Date. Borrower shall pay interest accrued on each LIBOR Loan
that is a Term Loan or Canadian Term Loan at the end of its Interest
Period, and in addition, for each LIBOR Loan with an Interest Period
longer than three months, Borrower shall pay interest on such LIBOR
Loan quarterly on the first Business Day of each calendar quarter
following the first day of such Interest Period. Borrower shall pay
interest accrued on each Term Loan and Canadian Term Loan after the
Term Maturity Date on demand.
6.2.2. Principal. Commencing on the first day of January,
1997, Borrower shall repay the Aggregate Term Loan and Aggregate
Canadian Term Loan on the dates and in the amounts set forth in the
following table:
17
<PAGE>
<TABLE>
<CAPTION>
Term Loan Canadian Term
Date Payment Loan Payment
<C> <C> <C>
January 1, 1997 $4,750,000
April 1, 1997 $4,750,000
July 1, 1997 $4,750,000
October 1, 1997 $4,750,000
January 1, 1998 $5,000,000
April 1, 1998 $5,000,000
July 1, 1998 $5,000,000
October 1, 1998 $5,000,000
January 1, 1999 $5,250,000
April 1, 1999 $5,250,000
July 1, 1999 $5,250,000
October 1, 1999 $5,250,000
January 1, 2000 $5,500,000
April 1, 2000 $5,500,000
July 1, 2000 $5,500,000
October 1, 2000 $5,500,000
January 1, 2001 $5,500,000
April 1, 2001 $5,500,000
Term Maturity Date Balance Balance
</TABLE>
6.3. Scheduled Payments on Post-Offering Acquisition Loan
and General Acquisition Loan.
6.3.1. Interest. Subject to Section 6.3.3 with respect to
the Aggregate General Acquisition Loan, Borrower shall pay interest
accrued on each Alternate Base Rate Loan that is a Post-Offering
Acquisition Loan or a General Acquisition Loan monthly in arrears,
beginning on the first Business Day of the first full calendar month
following the Effective Date, and continuing on the first Business
Day of each calendar month thereafter, and on July 23, 2001. Borrower
shall pay interest accrued on each LIBOR Loan that is a Post-Offering
Acquisition Loan or a General Acquisition Loan at the end of its
Interest Period, and in addition, for each LIBOR Loan with an Interest
Period longer than three months, Borrower shall pay interest on such
Loan quarterly on the first Business Day of each calendar quarter
following the first day of such Interest Period. Borrower shall pay
interest accrued on each Post-Offering Acquisition Loan or General
Acquisition Loan after July 23, 2001 on demand.
6.3.2. Principal. Subject to Section 6.3.3 with respect to
the Aggregate General Acquisition Loan, Borrower shall repay the amount
of each Post-Offering Acquisition Advance of the Aggregate Post-Offering
Acquisition Loan and the amount of each General Acquisition Advance of
the Aggregate General Acquisition Loan in quarterly installments,
commencing on the first Business Day of the second full calendar
quarter beginning after such Post-Offering Acquisition Advance or
General Acquisition Advance, as applicable, and continuing on the first
Business Day of each calendar quarter thereafter, each in an amount
equal to 5% of the amount of such Post-Offering Acquisition Advance or
General Acquisition Advance, and a final installment in the amount of
the Aggregate Post-Offering Acquisition Loan (the "Post-Offering
Acquisition Balloon Payment") or the Aggregate General Acquisition Loan
(the "General Acquisition Balloon Payment") on July 23, 2001.
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<PAGE>
6.3.3. Special General Acquisition Loan Payment Provisions.
General Acquisition Advances made in connection with the acquisition of
Mid-West Enterprises and Mid-West Systems shall be repaid as follows:
Within 15 days after the making of such General Acquisition Advances,
Borrower shall make a principal payment of at least $10,000,000,
together with all interest accrued and outstanding on the Aggregate
General Acquisition Loan to the date of such payment. As soon as
Administrative Agent has established an operating account for Borrower
at Administrative Agent's office, and in no event later than 30 days
after the making of the General Acquisition Advances for the
acquisition of Mid-West Enterprises and Mid-West Systems, Borrower
shall repay the full principal balance of the Aggregate General
Acquisition Loan, together with all interest accrued thereon to the
date of such payment. Borrower may request Revolving Advances to make
such repayment.
6.4. Prepayments; Reduction of Revolving Commitment.
6.4.1. Voluntary Prepayments. Borrower shall not be
entitled to prepay any LIBOR Loan. Borrower may wholly prepay the
Aggregate Alternate Base Rate Term Loan, the Aggregate Alternate Base
Rate Canadian Term Loan, the Aggregate Alternate Base Rate
Post-Offering Acquisition Loan, the Aggregate Alternate Base Rate
General Acquisition Loan, the Aggregate Alternate Base Rate Revolving
Loan, or the Swingline Loan at any time and may make partial
prepayments thereon from time to time, without penalty or premium, but
only if (i) Borrower gives Administrative Agent written notice (which
may be mailed, personally delivered or telecopied as provided in
Section 21.1) of Borrower's intention to make such prepayments at least
one Business Day prior to tendering the prepayments, (ii) the total
amount of the prepayments is a whole multiple of $500,000, and (iii)
Borrower pays any accrued interest on the amount prepaid at the time
of such prepayment. Each such prepayment will be applied by Lenders,
in accordance with their respective prorata shares of the applicable
Commitments, to reduce the Alternate Base Rate Loans and, in the case
of the Term Loans, the Canadian Term Loans, the Post-Offering
Acquisition Loans and the General Acquisition Loans, to reduce the
repayment installments due under Sections 6.2.2 and 6.3.2 in the
inverse order of their due dates; provided that the Canadian Term
Loan shall not be prepaid until the Aggregate Term Loan, the Aggregate
Post-Offering Acquisition Loan and the Aggregate General Acquisition
Loan have been paid down to zero.
6.4.2. Voluntary Reduction of Aggregate Revolving
Commitment. Borrower may reduce the Aggregate Revolving Commitment in
whole multiples of $500,000 at any time and from time to time, but only
if (i) Borrower gives Administrative Agent written notice of Borrower's
intention to make such reduction at least one Business Day prior to the
effective date of the reduction, and (ii) Borrower makes on the
effective date of the reduction any payment on the Aggregate Revolving
Loan required under Section 6.4.3 as a consequence of the reduction.
Any such reduction of the Aggregate Revolving Commitment shall be
permanent.
6.4.3. Mandatory Prepayments When Over-Advances Exist. If
at any time the sum of the Aggregate Revolving Loan and the Swingline
Loan exceeds the Maximum Available Amount (an "Overadvance"), whether
as a result of optional Revolving Advances by Lenders as contemplated
by Section 3.1.2 or otherwise, Borrower shall on demand by
Administrative Agent make a prepayment in the amount of the excess.
Each such prepayment shall be applied first by Boatmen's to reduce the
Swingline Loan until it is reduced to zero, then by Lenders in
accordance with their respective prorata shares of the Revolving
19
<PAGE>
Commitment to reduce the Alternate Base Rate Revolving Loan until it is
reduced to zero and then to reduce LIBOR oans that are Revolving Loans,
until they are reduced to zero.
6.4.4. Other Mandatory Prepayments.
6.4.4.1. Proceeds from Sales of Assets. If Borrower sells any
of its assets in a single transaction or related series of transactions
that are not in the ordinary course of business, Borrower shall make a
prepayment on the Loans (in the order of application specified below)
in the amount of the gross proceeds therefrom less reasonable selling
expenses and the increment in federal, state and local income taxes, if
any, payable as a consequence of any taxable gain from such sale.
Borrower need not make such prepayment, however, (i) unless the net
proceeds from such sale or sales exceed $150,000, or (ii) from the net
proceeds of any such sale of a capital asset to the extent such net
proceeds are expended by Borrower within 90 days of completion of the
sale for replacement of such asset by another asset of comparable type
and utility and such expenditure will not result in Borrower exceeding
the limits for Capital Expenditures in Section 17.2.
6.4.4.2. Proceeds from Sale of Securities. If after the
Execution Date any Borrower or its parent corporation issues any equity
or debt securities, or warrants or options therefor, Borrower shall
make a prepayment on the Loans (in the order of application specified
below) promptly after such sale in an amount equal to the gross
proceeds therefrom less reasonable brokers' and underwriters' fees and
commissions and other reasonable issuing expenses; provided, however,
Borrower need not make such prepayment with respect to proceeds up to
$1,000,000 which are received as a result of the exercise of stock
options held by officers of Borrower.
6.4.4.3. Application of Insurance/Condemnation Proceeds. All
Insurance/Condemnation Proceeds shall be deposited in an
interest-bearing account with Administrative Agent in the name of
Borrower (the "Proceeds Account") promptly upon receipt thereof by
Borrower or Administrative Agent. Within 90 days after such receipt
Borrower may expend, or commit to expend, some or all the funds in the
Proceeds Account for rebuilding, repairing or replacing the property
for which such Insurance/Condemnation Proceeds were paid. All funds in
the Proceeds Account that have not been committed to be so expended by
the 90th day after receipt shall be applied to reduce the Aggregate
Term Loan and/or the Aggregate Canadian Term Loan, depending on whether
the Insurance/Condemnation Proceeds are received as a result of a loss
to assets located in Canada or the United States, and all funds
remaining in the Proceeds Account upon completion of such rebuilding,
repairing or replacement shall be applied to reduce the Aggregate Term
Loan and or the Aggregate Canadian Term Loan, as applicable; provided ,
however, that in no event shall the aggregate mandatory prepayment of
the Aggregate Canadian Term Loan pursuant hereto exceed $1,999,999.
The foregoing notwithstanding, Administrative Agent shall have the
right to debit the Proceeds Account in the amount of, and apply the
debit amount to pay, any of the Loan Obligations that are not paid when
due as provided herein. The Proceeds Account shall, contemporaneously
with its establishment, be assigned by Borrower to Administrative Agent
as security for the Loan. Expenditures by Borrower for
20
<PAGE>
such rebuilding, repairing or replacement in excess of the amount of the
Insurance/Condemnation Proceeds shall be deemed Capital Expenditures
subject to the limits in Section 17.2). In the event that any insurance
Condemnation Proceeds remain after application as described above, they
shall be applied as specified below.
6.4.4.4. Excess Cash Flow. Within 120 days after the end of
each fiscal year of Borrower, commencing with the fiscal year ending on
the last Sunday in June, 1997, Borrower shall pay to Administrative
Agent for the ratable account of Lenders funds in an amount equal to
75% of Borrower's Excess Cash Flow for such fiscal year. Such funds
shall be applied ratably to the Post-Offering Acquisition Balloon
Payment and the General Acquisition Balloon Payment until each is
reduced to zero. If, after any such application, the Post-Offering
Acquisition Balloon Payment and the General Acquisition Balloon Payment
shall have been reduced to zero and there shall be funds remaining from
Borrower's Excess Cash Flow, 50% of such funds shall be applied to
reduce ratably the remaining scheduled principal payments of the
Aggregate Post-Offering Acquisition Loan, the Aggregate General
Acquisition Loan and the Aggregate Term Loan. The remainder shall be
returned to Borrower. Each year thereafter, within 120 days after the
end of each fiscal year of Borrower, Borrower shall pay to
Administrative Agent for the ratable account of Lenders funds in an
amount equal to 50% of Borrower's Excess Cash Flow for such fiscal
year, which funds shall be applied to reduce ratably the remaining
scheduled principal payments of the Aggregate Post-Offering Acquisition
Loan, the Aggregate General Acquisition Loan and the Aggregate Term
Loan. If such application reduces the Aggregate Post-Offering
Acquisition Loan, the Aggregate General Acquisition Loan and the
Aggregate Term Loan to zero, the remaining amount of such prepayment
and all subsequent prepayments shall be applied to reduce the Aggregate
Revolving Loan, with a corresponding permanent reduction in the
Aggregate Revolving Commitment. "Excess Cash Flow" means, for any
period of calculation, Operating Cash Flow minus the sum of Fixed
Charges (including principal payments, interest payments and Capital
Expenditures, but exclusive of dividends) and the amount of any
voluntary prepayment (including prepayment premium) of long term
indebtedness of Borrower in such period.
Each prepayment required under Section 6.4.4.1 or 6.4.4.2 (or, to the
extent applicable, under Section 6.4.4.3) shall be applied to reduce
the Aggregate Term Loan, the Aggregate Post-Offering Acquisition Loan
and the Aggregate General Acquisition Loan ratably. If application of
any prepayment to the Aggregate Term Loan, the Aggregate Post-Offering
Acquisition Loan and the Aggregate General Acquisition Loan reduces
each of the foregoing to zero, the remaining amount of such prepayment
and all subsequent prepayments shall be applied to reduce the Aggregate
Revolving Loan, with a corresponding permanent reduction in the
Aggregate Revolving Commitment.
6.4.5. Mandatory Reduction of Revolving Commitment. At
Co-Arrangers' option, but no less often than quarterly, Administrative
Agent shall calculate the Dollar equivalent of the face amount of the
Swiftpack Letter of Credit using the rate at which Administrative Agent
could convert British Pounds into Dollars on such date and, to the
extent, if any, that such amount exceeds $21,000,000, the Revolving
Commitment shall be automatically reduced temporarily by the amount of
such excess until the next such calculation.
21
<PAGE>
6.5. Manner of Payments and Timing of Application of
Payments.
6.5.1. Payment Requirement. Except as provided in Section
6.1.2.1. with respect to payments from collected funds in the Cash
Collateral Account and unless expressly provided to the contrary
elsewhere herein, Borrower shall make each payment on the Loan
Obligations to Administrative Agent for the account of the Lenders as
required under the Loan Documents at the Lending Office. All such
payments shall be made in Dollars on the date when due, without
deduction, set-off or counterclaim. All such payments will be
distributed by Administrative Agent to Lenders as provided in Section
19.14 for application to the Loan Obligations as provided herein.
6.5.2. Application of Payments and Proceeds. All payments
received by a Lender in immediately available funds at or before 2:00
p.m., St. Louis time, on a Business Day will be applied to the relevant
Loan Obligation on the same day. Such payments received on a day that
is not a Business Day or after 2:00 p.m. on a Business Day will be
applied to the relevant Loan Obligation on the next Business Day.
Except as expressly provided otherwise herein, Lenders may apply, and
reverse and reapply, payments and proceeds of the Collateral to the
Loan Obligations in such order and manner as Lenders determine in their
absolute discretion. Borrower hereby irrevocably waives the right to
direct the application of payments and proceeds of the Collateral.
6.5.3. Interest Calculation. Section 6.5.2 notwithstanding,
for purposes of interest calculation only, (i) a payment by check, draft
or other instrument received at or before 2:00 p.m., St. Louis time,
on a Business Day shall be deemed to have been applied to the relevant
Loan Obligation on the second following Business Day, (ii) a payment
by check, draft or other instrument received on a day that is not a
Business Day or after 2:00 p.m. on a Business Day shall be deemed to
have been applied to the relevant Loan Obligation on the third
following Business Day, (iii) a payment in cash or by wire transfer
received at or before 2:00 p.m., St. Louis time, on a Business Day
shall be deemed to have been applied to the relevant Loan Obligation on
the Business Day when it is received, and (iv) a payment in cash or by
wire transfer received on a day that is not a Business Day or after
2:00 p.m., St. Louis time, on a Business Day shall be deemed to have
been applied to the relevant Loan Obligation on the next Business Day.
6.6. Returned Instruments. If a payment is made by check,
draft or other instrument and the check, draft or other instrument is
returned unpaid, the application of the payment to the Loan Obligations
will be reversed and will be treated as never having been made.
6.7. Compelled Return of Payments or Proceeds. If a
Lender is for any reason compelled to surrender any payment or any
proceeds of the Collateral because such payment or the application of
such proceeds is for any reason invalidated, declared fraudulent, set
aside, or determined to be void or voidable as a preference, an
impermissible setoff, or a diversion of trust funds, then this
Agreement and the Loan Obligations to which such payment or proceeds
was applied or intended to be applied shall be revived as if such
application was never made; and Borrower shall be liable to pay to such
Lender, and shall indemnify such Lender for and hold such Lender
harmless from any loss with respect to, the amount of such payment or
proceeds surrendered. This Section shall be effective notwithstanding
any contrary action such Lender may take in reliance upon its receipt
of any such payment or proceeds. Any such contrary action so taken by
such Lender shall be without prejudice to such Lender's rights under
this Agreement and shall be deemed to have been conditioned upon the
application of such payment or proceeds having become final and
irrevocable. The provisions of this Section shall survive termination
of
22
<PAGE>
the Commitments, the expiration of the Letters of Credit and the payment
and satisfaction of all of the Loan Obligations.
6.8. Due Dates Not on Business Days. If any payment
required hereunder becomes due on a date that is not a Business Day,
then such due date shall be deemed automatically extended to the next
Business Day.
7. Borrowings.
7.1. Advances to Borrower. Borrower may request Advances
by submitting an Advance Request to Administrative Agent.
Administrative Agent may treat every request for an Alternate Base Rate
Revolving Advance as a request for a Swingline Advance to the extent
the requested amount does not exceed the Maximum Swingline Amount and
as a request for a Revolving Advance in the amount of the excess.
Every Advance Request shall be irrevocable. An Advance Request
received by Administrative Agent on a day that is not a Business Day or
that is received by Administrative Agent after 11:00 a.m., St. Louis
time, on a Business Day shall be treated as having been received by
Administrative Agent at 11:00 a.m., St. Louis time, on the next
Business Day.
7.2. Revolving Advances to Repay the Swingline Loan.
7.2.1. Boatmen's shall, on any Advance Date for an Advance
other than a Swingline Advance, on any date when a prepayment of an
Alternate Base Rate Revolving Loan is made as permitted or required
under Section 6.4, and on each Settlement Date, and Boatmen's may, on
any other date in Boatmen's absolute discretion, give notice to Lenders
of the amount of the Swingline Loan after application of all payments
to be applied thereto as provided elsewhere herein. Such notice shall
be given no later than 12:00 p.m. (St. Louis time) and may include a
demand that the Swingline Loan be fully paid. If Boatmen's demands
that the Swingline Loan be fully paid, then prior to 3:00 p.m. (St.
Louis time) on such date, each Lender (other than Boatmen's) shall make
an Alternate Base Rate Revolving Advance (a "Mandatory Advance") to
Boatmen's for the account of Borrower and the proceeds thereof shall be
applied by Boatmen's to reduce the Swingline Loan. Such Alternate Base
Rate Advances shall be made by Lenders in accordance with their prorata
shares of the Aggregate Revolving Commitment and shall be made notwith-
standing that (i) the amount of the aggregate Mandatory Advances may not
be in the minimum amount for Advances otherwise required hereunder,
(ii) any conditions to Advances in Section 10 may not be then satisfied,
(iii) there is an Existing Default, (iv) the amount of such Mandatory
Advances would result in the Aggregate Revolving Loan exceeding
the Maximum Available Amount, or (v) such Mandatory Advances may be
made after the Revolver Maturity Date; provided, however, that in no
event shall any Lender be required to make any Mandatory Advance that
would result in the Revolving Loan of such Lender exceeding such
Lender's Revolving Commitment. After application of the proceeds of
Mandatory Advances to reduce the Swingline Loan, Boatmen's Revolving
Loan shall be deemed increased by the remaining amount of the Swingline
Loan and the Swingline Loan simultaneously reduced to zero.
7.2.2. If for any reason, including the commencement of a
proceeding in bankruptcy with respect to any Borrower, Mandatory
Advances cannot be made on the date otherwise required above, then each
Lender shall be deemed automatically to have purchased from Boatmen's
as of such date a prorata undivided interest and participation in the
Swingline Loan so as to cause such Lender to share in the Swingline
Loan in accordance with its prorata share of the Aggregate Revolving
Commitment. Each Lender shall remit its prorata share of the Swingline
Loan to Boatmen's promptly on demand. All interest payable with
respect
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to such Lender's prorata share of the Swingline Loan shall be for the
account of Boatmen's to the date such remittance is made, and shall be
for the account of and remitted by Boatmen's to such Lender as a
participant from and after such date. Further, until such remittance
is made, such Lender shall pay to Boatmen's, on demand, interest on
such Lender's prorata share of the Aggregate Swing Loan at the Federal
Funds Rate.
7.3. Lenders' Right to Make Other Revolving Advances.
With the prior approval of Required Lenders in each instance, Lenders
shall have the right themselves (but no Lender shall be obligated) to
make prorata Revolving Advances at any time and from time to time to
cause timely payment of any of the Loan Obligations. Administrative
Agent will give notice to Borrower after any such Revolving Advance is
made, but failure to give such notice shall not affect the validity of
any such Revolving Advance.
7.4. Letters of Credit. Borrower may request the issuance
of a Letter of Credit by submitting a Letter of Credit Request to
Administrative Agent and executing the reimbursement agreement required
under Section 12.1 no less than five Business Days prior to the
requested issue date for such Letter of Credit.
7.5. Administrative Agent's Notice to Lenders; Funds
Deposit.
7.5.1. Advances. Not later than 12:00 noon (St. Louis time)
on the date when an Advance is requested to be made (each an "Advance
Date"), which may only be on a Business Day, Administrative Agent shall
promptly notify each Lender of the amount of the Advance to be made on
that Business Day. Each Lender shall make available by 3:00 p.m. (St.
Louis time) on the Advance Date its prorata share of such Advance
(except a Swingline Advance, which shall be funded solely by Boatmen's
as provided herein), rounded to the nearest penny, in immediately
available funds consisting solely of Dollars, to Administrative Agent
in accordance with such remittance instructions as may be given by
Administrative Agent to Lenders from time to time.
7.5.2. Funding Draws on Letters of Credit. In the event
that a draw is made on a Letter of Credit and Borrower does not
reimburse the amount of such draw in full to Letter of Credit Issuer on
demand, Letter of Credit Issuer shall promptly notify Administrative
Agent of such failure. Upon Administrative Agent's receipt of such
notice from Letter of Credit Issuer, Administrative Agent shall
promptly notify each Lender thereof and shall have the right to cause a
Revolving Advance to be made, regardless of whether such Revolving
Advance would result in the Revolving Loan exceeding the Maximum
Available Amount, by notifying each Lender of the draw, the amount of
the Revolving Advance required to fund such draw, and the amount of
each such Lender's ratable share of such Revolving Advance (which
notice shall be deemed to be a Revolving Advance Request). Unless
otherwise agreed by Lenders, the Advance Date and time for such
Revolving Advance shall not be later than 12:00 p.m. (St. Louis time)
on the first Business Day following Administrative Agent's delivery of
notice to the Lenders. By no later than such Advance Date and time,
each Lender shall unconditionally make available its prorata share of
the Revolving Advance, in immediately available funds consisting solely
of Dollars, to Administrative Agent in accordance with such remittance
instructions as may be given by Administrative Agent to each Lender
from time to time. Each Revolving Advance made by Lenders pursuant to
this Section 7.5.2 shall be deemed to be a Alternate Base Rate Advance.
7.6. Advances Ratable. All Advances shall be made by
Lenders as provided herein in accordance with their prorata shares of
the respective Commitments, as applicable. Except as otherwise
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expressly provided herein, a Lender shall not be obligated to make
Revolving Advances in excess of its Revolving Commitment, Term Advances
in excess of its Term Commitment, Canadian Term Advances in excess of
its Canadian Term Commitment, Post-Offering Acquisition Advances in
excess of its Acquisition Commitment or General Acquisition Advances in
excess of its General Acquisition Commitment or advance more than its
prorata share of any Advance.
7.7. Administrative Agent's Availability Assumption.
Unless Administrative Agent has been given written notice by a Lender
prior to an Advance Date that such Lender does not intend to make
available to Administrative Agent such Lender's prorata portion of the
Advance which it will be obligated to make on the Advance Date,
Administrative Agent may assume that each Lender has made the required
amount available to Administrative Agent on the Advance Date and
Administrative Agent may, in reliance upon such assumption, make
available to Borrower a corresponding amount. If such corresponding
amount is not in fact made available to Administrative Agent by such
Lender on the Advance Date, Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender. If such
Lender does not pay such corresponding amount immediately upon
Administrative Agent's demand therefor, then Administrative Agent shall
promptly notify Borrower and the other Lenders and Borrower shall
immediately pay such corresponding amount to Administrative Agent.
Administrative Agent shall also be entitled to recover, either from
such defaulting Lender or Borrower, interest on such corresponding
amount for each day from, but not including, the date such
corresponding amount was made available by Administrative Agent to
Borrower to, and including, the date such corresponding amount is
recovered by Administrative Agent, at a rate per annum equal to (i) if
paid by such Lender, the cost to Administrative Agent of funding such
amount at the Federal Funds Rate, or (ii) if paid by Borrower, the
applicable rate for Revolving Advances determined from the Advance
Request to which such amount relates. Each Lender shall be obligated
only to fund its prorata share of an Advance subject to the terms and
conditions hereof, regardless of the failure of another Lender to fund
its prorata share thereof.
7.8. Disbursement. Provided that all conditions precedent
herein to a requested Advance have been satisfied, Administrative Agent
(Boatmen's, in the case of a Swingline Advances) will make the amount
of such requested Advance available to Borrower on the applicable
Advance Date in immediately available funds in Dollars at the Lending
Office. Such funds will be deposited in an account of Borrower's at
the Lending Office unless Borrower gives Administrative Agent specific
disbursement instructions otherwise.
7.9. Amount, Number, and Purpose Restrictions on
Advances. No Advance will be made unless it is a whole multiple of
$500,000 and not less than $1,000,000, in the case of a LIBOR Advance,
or a whole multiple of $50,000 and not less than $500,000, in the case
of an Alternate Base Rate Advance. On any one day, no more than one
Revolving Advance will be made from each Lender pursuant to an Advance
Request; no more than one Post-Offering Acquisition Advance will be
made from each Lender pursuant to an Advance Request; no more than one
General Acquisition Advance will be made from each Lender pursuant to
an Advance Request; and no more than one Swingline Advance will be made
from Boatmen's pursuant to an Advance Request. Advances will only be
made for the purposes permitted in Section 15.1.
7.10. Restriction on Number of LIBOR Loans. No more than
ten LIBOR Loans with different Interest Periods may be outstanding at
any one time.
7.11. Each Advance Request and Letter of Credit Request a
Certification. Each Advance Request and each Letter of Credit Request
by a Borrowing Officer shall constitute a certification by Borrower
that (i) there is no Existing Default, (ii) all representations and
warranties of Borrower in this Agreement are then true, with such
exceptions as have been disclosed to Administrative Agent in writing by
Borrower, and will be true on the Advance Date or Issuance Date, as
applicable, as if then made, with
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such exceptions as have been disclosed to Administrative Agent in
writing by Borrower, except that with respect to the representations
and warranties made regarding financial data in Section 13.15, such
representations and warranties shall be deemed made with respect to the
most recent Financial Statements and other financial data delivered by
Borrower to Lenders, and (iii) all conditions precedent hereunder to the
making of the requested Advance or issuance of the requested Letter of
Credit have been satisfied.
7.12. Requirements for Every Advance Request. Only a
written request (which may be mailed, personally delivered or
telecopied as provided in Section 21.1) from a Borrowing Officer to
Administrative Agent that specifies the amount of the Advance to be
made, the Advance Date, whether it is to be a LIBOR Advance or an
Alternate Base Rate Advance, and the Interest Period to be applicable
to the Advance if it is a LIBOR Advance, shall be treated as an
"Advance Request".
7.13. Requirements for Every Letter of Credit Request.
Only a written request (which may be mailed, personally delivered or
telecopied as provided in Section 21.1) from a Borrowing Officer to
Administrative Agent that specifies the amount, requested issue date
(which shall be a Business Day and in no event later than 180 days
before the Revolver Maturity Date) and beneficiary of the requested
Letter of Credit and other information necessary for its issuance shall
be treated as a "Letter of Credit Request".
7.14. Exoneration of Administrative Agent and Lenders.
Neither Administrative Agent nor any Lender shall incur any liability
to Borrower for treating a request that meets the express requirements
of Section 7.12 or Section 7.13 as an Advance Request or Letter of
Credit Request, as applicable, if Administrative Agent believes in good
faith that the Person making the request is a Borrowing Officer. Neither
Administrative Agent nor any Lender shall incur any liability to
Borrower for failing to treat any such request as an Advance Request or
Letter of Credit Request, as applicable, if Lender believes in good
faith that the Person making the request is not a Borrowing Officer.
7.15. Suspension of Obligation to Make LIBOR Advances. If
(i) on any date for determining the LIBO Rate for any Interest Period,
by reason of any changes arising after the Execution Date affecting the
London Interbank Market, or any Lender's position in such market,
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition herein of
LIBO Rate, or (ii) the making of any Advance which is to be a LIBOR
Advance or the continuance of any LIBOR Advance by a Lender has become
unlawful by compliance by such Lender in good faith with any Law or any
pronouncement of a Governmental Authority (whether or not having the
force of law and whether or not failure to comply therewith would be
unlawful), then such Lender shall promptly give notice to Borrower of
such determination. Until such Lender notifies Borrower that the
circumstances giving rise to the suspension described herein no longer
exist, (a) the obligation of such Lender to make Advances which are
LIBOR Advances shall be suspended, (b) each outstanding LIBOR Advance
from such Lender shall be automatically converted into an Alternate
Base Rate Advance on the earlier of the last day of the Interest Period
for such LIBOR Advance or the last date permitted by applicable law,
and (c) all Revolving Advances from such Lender shall be Alternate Base
Rate Advances. Notwithstanding anything to the contrary contained
herein, if a LIBOR Advance is converted to an Alternate Base Rate
Advance pursuant to this Section 7.15, the per annum interest rate
applicable thereto from and after the effective date of such conversion
shall be the Alternate Base Rate (but otherwise calculated as provided
in Section 4).
8. Security and Guaranties. As security for payment and
performance of the Loan Obligations, Borrower shall on the Execution
Date execute and deliver, or cause to be executed and delivered, to
Administrative Agent the following documents, each being satisfactory
to Lenders:
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8.1. Security Agreements. Security agreements from each
Borrower and each Guarantor granting to Administrative Agent for the
benefit of Lenders a Security Interest under the UCC in all of the
Goods, Equipment, Accounts, Inventory, Instruments, Documents, Chattel
Paper, General Intangibles and other personal property and Fixtures of
such Borrower and such Guarantor, whether now owned or hereafter
acquired, and all proceeds thereof, subject only to Permitted Security
Interests affecting such property and existing on the Execution Date.
8.2. Mortgages. Mortgages and deeds of trust granting to
Administrative Agent for the benefit of Lenders Security Interests in
the real property described in Attachment 1 to the Disclosure Schedule,
and all income and proceeds thereof, subject only to Permitted Security
Interests affecting such real property and existing on the Execution
Date. If Borrower or any Guarantor acquires or leases any real
property after the Execution Date, Borrower shall notify Administrative
Agent thereof and shall deliver, or cause to be delivered, to
Administrative Agent for the benefit of Lenders a deed of trust or
mortgage, or leasehold deed of trust or mortgage, as appropriate, on
each parcel of such real property promptly upon request by
Administrative Agent.
8.3. Intellectual Property Assignments. One or more
assignments assigning to Administrative Agent for the benefit of
Lenders a Security Interest in all the Intellectual Property of
Borrower and each Guarantor described in Attachment 2 to the Disclosure
Schedule.
8.4. Stock Pledge Agreements. Stock pledge agreements
granting to Administrative Agent for the benefit of Lenders a Security
Interest in all of the capital stock and other equity Securities of
every Borrower, and every Subsidiary and Affiliate of every Borrower
(other than DTI and certain foreign Subsidiaries, as to which less than
100% of such securities may be pledged), and all dividends and other
proceeds thereof. If any Borrower or any such Subsidiary or Affiliate
issues any such capital stock or other equity Securities, such
Borrower, Subsidiary, or Affiliate shall notify Administrative Agent
thereof and shall deliver to Administrative Agent a stock pledge
agreement granting to Administrative Agent for the benefit of Lenders a
Security Interest in such capital stock or other equity Securities.
8.5. Account Assignment. An assignment assigning to
Administrative Agent for the benefit of Lenders all of Borrower's
rights and interest in the Cash Collateral Account.
8.6. Guaranty. Guaranties (i) by Armac, AMI and Mid-West
Systems (each, a "Guarantor") of the Loan Obligations pursuant to
guaranties satisfactory to Administrative Agent (as each of the same
may be amended, restated or replaced from time to time, a "Guaranty")
and (ii) by each Canadian Loan Guarantor of all of the Indebtedness and
obligations of the Canadian Borrowers under the Aggregate Canadian Term
Commitment (as each of the same may be amended, restated or replaced
from time to time, a "Canadian Loan Guaranty").
Administrative Agent may, either before or after an Event of Default,
but only with the consent or at the direction of Lenders granted or
withheld in their absolute discretion, exchange, waive or release the
Security Interests in any of the Collateral or permit Borrower or any
Guarantor to substitute any real or personal property for any of the
Collateral without affecting the Loan Obligations or Administrative
Agent's right to take any other action with respect to any other
Collateral; provided, however, that Administrative Agent may, in its
sole discretion and without the consent of any other Lender, do, or
permit Borrower or any Guarantor to do, any of the foregoing with
respect to the Collateral or other real or personal property with a
value of up to $100,000 in the aggregate.
9. Power of Attorney. Each Borrower hereby authorizes
Administrative Agent and irrevocably appoints Administrative Agent
(acting by any of its officers) as such Borrower's agent and
attorney-in-fact
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(which appointment is coupled with an interest and is therefore
irrevocable) to do any of the following until all of the Loan
Obligations are fully paid and satisfied and the Commitments are
terminated:
9.1. At any time while there is an Existing Default, (i)
demand payment of any Account; (ii) enforce payment of any Account by
legal proceedings or otherwise; (iii) exercise all of Borrower's
rights and remedies in proceedings brought to collect any Account; (iv)
sell or assign any Account upon such terms, for such amount and at such
time or times as Administrative Agent deems advisable; (v) settle,
adjust, compromise, extend or renew any Account; (vi) discharge and
release any Account; (vii) prepare, file and sign such Borrower's name
on any proof of claim in bankruptcy or other similar documents against
an Account Debtor; (viii) notify the postal authorities of any change
of the address for delivery of such Borrower's mail to any address
designed by Administrative Agent, and open and process all mail
addressed to such Borrower; (ix) endorse such Borrower's name on any
verification of Accounts and notices thereof to Account Debtors; (x)
make one or more Revolving Advances to pay the costs and expenses of
any of the foregoing; and (xi) do anything that Administrative Agent
deems necessary in its reasonable discretion to assure that the Loan
Obligations are fully paid.
9.2. At any time, (i) take control in any manner of any
item of payment or proceeds of any Account; (ii) have access to any
lockbox or postal box into which such Borrower's mail is deposited;
(iii) endorse such Borrower's name upon any items of payment and
deposit the same in the Cash Collateral Account and apply the proceeds
thereof to the Loan Obligations as provided herein; (iv) endorse such
Borrower's name upon any chattel paper, document, instrument, invoice,
or similar document or agreement relating to any Account or other item
of the Collateral; and (v) execute in such Borrower's name and on such
Borrower's behalf any financing statement or amendments thereto deemed
necessary or appropriate by Administrative Agent to assure the
perfection or continued perfection of Administrative Agent's Security
Interests in the Collateral for the benefit of Lenders.
The foregoing power of attorney and authorization shall be deemed
automatically revoked upon the payment in full of all of the Loan
Obligations and the termination of the Commitments.
10. Conditions of Lending.
10.1. Conditions to Initial Advance. As conditions
precedent to Lenders' obligations to make the initial Advances:
10.1.1. Listed Documents and Other Items. Administrative
Agent shall have received on or before the Effective Date all of the
documents and other items listed or described in Exhibit 10.1.1 hereto,
with each being (as applicable) duly executed and (also as applicable)
sealed, attested, acknowledged, certified, or authenticated.
10.1.2. Net Worth. Borrower's aggregate Net Worth shall be
not less than $88,000,000.
10.1.3. Availability Under Aggregate Revolving Commitment.
The Maximum Available Amount must be in excess of $9,000,000.
10.1.4. Financial Condition. Lenders shall have determined
to their satisfaction that the financial statements of Borrower for the
fiscal year ended June 25, 1995 (the "Initial Financial Statements")
and the Historical Combined Financial Statements and proforma financial
statements of Borrower dated June 27, 1996 for the periods covering
Borrower's fiscal year 1992 through Borrower's fiscal year 2001 and
other information concerning Borrower furnished to Administrative Agent
by Borrower (i) for the period ended
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on or before the Effective Date, fairly and accurately reflect the
business and financial condition of Borrower, its cash flows, and the
results of its operations for such periods in all material respects,
and (ii) for the periods that will end after the Effective Date, fairly
and accurately forecast the business and financial condition of
Borrower, its cash flows, and the results of its operations for such
periods, in each case, as of the date of such statements and
projections.
10.1.5. Mid-West Enterprises and Mid-West Systems Financial
Statements. Lenders shall have received the audited financial
statements of Mid-West Enterprises and Mid-West Systems for the period
ended May 28, 1995 and shall have determined to their satisfaction that
such financial statements fairly and accurately reflect the business
and financial condition of Mid-West Enterprises and Mid-West Systems
respectively, their respective cash flows, and the results of their
respective operations for such period in all material respects.
10.1.6. Default. There shall be no Existing Default and no
Default or Event of Default will occur as a result of such Advance
being requested or made or the application of the proceeds thereof.
10.1.7. Perfection of Security Interests. Every Security
Interest required to be granted by Borrower to Administrative Agent
under Section 8 shall have been perfected and shall be, except as
otherwise satisfactory to Lenders, a first priority Security Interest.
10.1.8. Representations and Warranties. The representations
and warranties contained in the Loan Documents shall be true and
correct.
10.1.9. Material Adverse Change. Since the date of the most
recent Financial Statements delivered to Administrative Agent, there
shall not have been any change which would have a Material Adverse
Effect.
10.1.10. Pending Material Proceedings. There shall be no
pending Material Proceedings.
10.1.11. Payment of Fees. Borrower shall have paid and
reimbursed to Lenders all fees, costs and expenses that are payable or
reimbursable to Lenders hereunder on or before the Effective Date.
10.1.12. Legal Opinion. Co-Arrangers shall have received an
opinion of Borrower's counsel, dated the Effective Date, addressed to
Lenders and satisfactory to Co-Arrangers.
10.1.13. Other Items. Co-Arrangers shall have received such
other consents, approvals, opinions, certificates or documents as they
reasonably deem necessary.
10.2. Conditions to All Subsequent Advances. The
obligation of Lenders to make any Advance subsequent to the initial
Advances shall be subject to the prior or concurrent fulfillment of
each of the following additional conditions precedent:
10.2.1. General Conditions. All of the conditions to the
initial Advances in Section 10.1 shall have been and shall remain
satisfied.
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10.2.2. Representations and Warranties. The representations
and warranties contained in the Loan Documents, with such exceptions as
have been disclosed to Lenders in writing by Borrower as addenda to the
Disclosure Schedule and are satisfactory to Administrative Agent, shall
be true and correct in all material respects as of the time of such
Advance and with the same force and effect as if made at such time,
except that with respect to the representations and warranties made
regarding financial data in Section 13.15, such representations and
warranties shall be deemed made with respect to the most recent
Financial Statements and other financial data delivered by Borrower to
Lenders.
10.2.3. Default. There shall be no Existing Default and no
Default or Event of Default will occur as a result of such Revolving
Advance being requested or made or the application of the proceeds
thereof.
11. Special Conditions to Post-Offering Acquisition Advances;
General Acquisition Advances; Certain Revolving Advances. As
additional conditions precedent to any Post-Offering Acquisition
Advance, any General Acquisition Advance and any Revolving Advance used
in connection with a Permitted Acquisition, whether an initial Advance
or a subsequent Advance, Borrower shall have executed and delivered to
Lenders (in the case of Post-Offering Acquisition Advances only) the
Post-Offering Acquisition Notes as required by Section 3.5, and in
addition:
11.1. Acquisitions Requiring Approval. Subject to the terms
of Sections 11.2.1 and 11.2.2, if (i) as of the date of the consummation
of an acquisition for which an Advance is requested, the aggregate
consideration paid or committed to be paid by Borrower for such
acquisition and all prior acquisitions by Borrower made after the
Effective Date is greater than $25,000,000, or (ii) the pro forma ratio
of Borrower's Indebtedness (after taking into effect any Advances made
in connection with such acquisition) to Adjusted Operating Cash Flow
(after taking into effect any Operating Cash Flow of the Target
Company) is equal to or greater than 2.50 to 1.00 on a trailing 12
month basis (assuming Borrower owned the Target Company for such
period) based on the Financial Statements for the acquisition furnished
to Co-Arrangers as required in Section 15.24, or (iii) any of the
conditions to initial Advances in Section 10.1 shall not then be
satisfied or shall not be satisfied after giving effect to the proposed
acquisition, then (1) the form and substance of the Acquisition
Documents and all financial, accounting, and tax aspects of the
transaction and the amount and form of consideration to be paid, must
be satisfactory to Required Lenders, and (2) Required Lenders must be
satisfied that after giving effect to the terms and conditions under
which the acquisition is made, the making of any Advance, or the
satisfaction by Borrower of the conditions precedent in this Section 11,
each Borrower shall be Solvent.
11.2. Other Acquisition Provisions.
11.2.1. Certain Post-Offering Acquisition Advances. If as of
the date of the consummation of an acquisition for which a
Post-Offering Acquisition Advance is requested, (i) there is no
Existing Default and no Default or Event of Default will occur as a
result of such Post-Offering Acquisition Advance being made; (ii) all
of the conditions of Sections 11.3 through 11.11 shall have been
satisfied (except that Section 11.7 need be satisfied only with respect
to Borrower) and (iii) the pro forma ratio of Borrower's Indebtedness
(after taking into effect any Advances made in connection with such
acquisition) to Adjusted Operating Cash Flow (after taking into effect
any Operating Cash Flow of the Target Company) is less than 2.50 to
1.00 on a trailing 12 month basis (assuming Borrower owned the Target
Company for such period) based on the Financial Statements for the
acquisition furnished to Co-Arrangers as required in Section 15.24, then
either;
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11.2.1.1. if the aggregate consideration paid or committed
to be paid by Borrower with Post-Offering Acquisition Advances for
such acquisition and all prior acquisitions by Borrower made after the
Effective Date is less than $25,000,000, the consent of Required Lenders
to such acquisition shall not be required; or
11.2.1.2. if the aggregate consideration paid or committed
to be paid by Borrower with Post-Offering Acquisition Advances for
any single acquisition is less than $10,000,000, the consent of Required
Lenders to such acquisition shall not be required; or
11.2.1.3. if the aggregate consideration paid or committed
to be paid by Borrower with Post-Offering Acquisition Advances for
such acquisition and all prior acquisitions by Borrower made after the
Effective Date is greater than $25,000,000 and less than $50,000,000 and
the total consideration to be paid by Borrower with Post-Offering
Acquisition Advances for such acquisition is equal to or greater than
$10,000,000, clauses (1) and (2) of Section 11.1 shall apply; or
11.2.1.4. if the aggregate consideration paid or committed
to be paid by Borrower with Post-Offering Acquisition Advances for
such acquisition and all prior acquisitions by Borrower made after the
Effective Date is greater than $50,000,000 and the total consideration
to be paid by Borrower with Post-Offering Acquisition Advances for such
acquisition is equal to or greater than $10,000,000, clauses (1) and (2)
of Section 11.1 shall apply and for purposes of this Section 11.2.1.4,
the term Required Lenders shall be deemed to include both Co-Arrangers.
11.2.2. Certain General Acquisition Advances. If (i) as of
the date of the consummation of an acquisition for which a General
Acquisition Advance is requested, (i) there is no Existing Default and
no Default or Event of Default will occur as a result of such General
Acquisition Advance being made; (ii) all of the conditions of Sections
11.3 through 11.11 shall have been satisfied (except that Section
11.7 need be satisfied only with respect to Borrower); and (iii) the pro
forma ratio of Borrower's Indebtedness (after taking into effect any
Advances made in connection with such acquisition) to Adjusted Operating
Cash Flow (after taking into effect any Operating Cash Flow of the
Target Company) is less than 2.50 to 1.00 on a trailing 12 month
basis (assuming Borrower owned the Target Company for such period) based
on the Financial Statements for the acquisition furnished to
Co-Arrangers as required in Section 15.24, then, either;
11.2.2.1. if the aggregate consideration paid or committed
to be paid by Borrower with General Acquisition Advances for such
acquisition and all prior acquisitions by Borrower is less than
$20,000,000, the consent of Required Lenders to such acquisition shall
not be required; or
11.2.2.2. if the aggregate consideration paid or committed
to be paid by Borrower with General Acquisition Advances for such
acquisition and all prior acquisitions by Borrower is equal to or
greater than $20,000,000, clauses (1) and (2) of Section 11.1 shall
apply notwithstanding any contrary provisions in Section 11.2.1.
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11.3. Surviving Company Becomes a Borrower or a Guarantor.
The Surviving Company, if it is not a Guarantor or a Borrower under the
Loan Agreement and a party to the Contribution Agreement as of the time
of such consummation, shall, contemporaneously with such Advance,
become a Borrower or a Guarantor by execution of an appropriate
amendment to the Loan Agreement, or a Guaranty, as applicable, and a
party to the Contribution Agreement by execution of an appropriate
amendment thereto and thereby bound by all of the terms and conditions
thereof.
11.4. Security Interests Granted in Assets. The Surviving
Company shall have executed and delivered to Administrative Agent
additional Security Documents granting to Administrative Agent for the
benefit of Lenders Security Interests in all of the material acquired
assets subject only to Permitted Security Interests.
11.5. Acquisition Documents Assignment. The Acquiring
Company shall have executed and delivered to Administrative Agent an
assignment assigning to Administrative Agent for the benefit of Lenders
all of Borrower's rights and interest under the related Acquisition
Documents.
11.6. Other Approvals Obtained. Any consents, approvals,
or no-action notices necessary for the acquisition to be consummated,
including any necessary approvals by a Governmental Authority and from
the board of directors or shareholders of Borrower and the Target
Company, shall have been obtained and, if requested by either
Co-Arranger, copies thereof provided to Co-Arrangers.
11.7. Satisfactory Due Diligence Completed. Borrower and
Lenders shall have conducted appropriate, independent due diligence
investigations, including, without limitation, investigations of
fraudulent conveyance risks, contingent liabilities and contractual
obligations and the results thereof shall have been provided to
Co-Arrangers and shall be satisfactory to Co-Arrangers. All financial,
accounting and tax aspects of the acquisition shall be satisfactory to
Co-Arrangers.
11.8. Special Opinion of Counsel. Administrative Agent
shall have received an opinion of counsel satisfactory to Co-Arrangers
that the Acquisition Documents are enforceable against the parties
thereto (except to the extent that the enforceability thereof against
such parties may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally or by
equitable principles of general application) and do not violate any Law
or Charter Document of any of the parties thereto, and that the
execution and consummation of the Acquisition Documents in accordance
with their terms will not violate the terms of the Loan Documents.
11.9. Proforma Financial Statements. Borrower's
Representative shall have delivered to Co-Arrangers the proforma
financial statements required under Section 15.24, together with a
certificate of a Responsible Officer of Borrower's Representative that
the projections therein of Borrower's quarterly financial condition,
results of operations, and cash flows represent Borrower's best
estimate of Borrower's future financial performance for the periods set
forth therein, that such projections have been prepared on the basis of
the assumptions described in the proforma financial statements, and
that Borrower's Representative believes such assumptions are fair and
reasonable in light of current and reasonably foreseeable business
conditions.
11.10. Contemporaneous Closing. The Acquisition Documents
shall have been delivered to Co-Arrangers in final form; the execution
and delivery of the Acquisition Documents shall have been duly
authorized and executed and shall be the valid and binding obligation
of the Acquiring Company and the other parties thereto and shall be
enforceable in accordance with its terms; each of the parties to the
Acquisition Documents shall have performed all of the obligations,
covenants, and conditions required of it prior to or as a condition to
the consummation of the transactions contemplated by the Acquisition
Documents, and no such obligation, covenant, or condition shall have
been waived by any party
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except for waivers agreed to by Borrower in its reasonable discretion
and which Co-Arrangers reasonably determine will not have a Material
Adverse Effect; Borrower shall not be in default of any of its
obligations under the Acquisition Documents; the representations and
warranties in the Acquisition Documents shall be true and accurate as
of the date of the closing of the acquisition; and the acquisition shall
have closed, or w ill close pursuant to the Acquisition Documents
contemporaneously with the Advance.
11.11. Other Conditions. All of the conditions to the
initial Advances in Section 10.1 shall have been and shall remain
satisfied.
12. Conditions to Issuance of Letter of Credit. As conditions
precedent to the issuance of any Letter of Credit:
12.1. Reimbursement Agreement. Borrower shall have
executed and delivered to Letter of Credit Issuer a reimbursement
agreement satisfactory to Letter of Credit Issuer under which Borrower
undertakes to reimburse to Letter of Credit Issuer on demand the amount
of each draw on such Letter of Credit, together with interest from the
date of the draw at the rate provided in Section 4.2.
12.1.1. Special Swiftpack Letter of Credit Provisions. In
addition to all other requirements regarding Letters of Credit,
Borrower shall reimburse to Letter of Credit Issuer on demand the
amount of each draw on the Swiftpack Letter of Credit, together with
interest from the date of the draw at the rate provided in Section
4.2; such reimbursement shall be made solely in Dollars which shall be
calculated using the rate at which Administrative Agent could convert
the amount drawn into Dollars as of the time of the draw in accordance
with its customary practices.
12.2. No Prohibitions. No order, judgment or decree of any
Governmental Authority shall exist which purports by its terms to
enjoin or restrain Letter of Credit Issuer or any other Lender from
issuing such Letter of Credit, and no Law or request or directive
(whether or not having the force of law) from any Governmental
Authority with jurisdiction over Letter of Credit Issuer or any other
Lender shall exist which prohibits, or requests that Letter of Credit
Issuer or any other Lender refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular, or imposes
upon Letter of Credit Issuer or any other Lender with respect to such
Letter of Credit any restriction or reserve or capital requirement (for
which Letter of Credit Issuer or any other Lender is not otherwise
compensable by Borrower hereunder).
12.3. Representations and Warranties. The representations
and warranties contained in the Loan Documents shall be true and
correct, with such exceptions as have been disclosed to Administrative
Agent in writing by Borrower as addenda to the Disclosure Schedule and
are satisfactory to Administrative Agent, as of the time of issuance.
12.4. No Default. There shall be no Existing Default and
no Default or Event of Default will occur as a result of such Letter of
Credit being requested or issued.
12.5. Other Conditions. All of the conditions to the
initial Advances in Section 10.1 shall have been and shall remain
satisfied.
13. Representations and Warranties. Except as otherwise described
in the disclosure schedule that is attached hereto as Exhibit 13 (the
"Disclosure Schedule"), Borrower represents and warrants to Lenders as
follows:
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13.1. Organization and Existence. Each Covered Person is
duly organized and existing in good standing under the laws of the
jurisdiction of its organization, is duly qualified to do business and
is in good standing in every jurisdiction where the nature or extent of
its business or properties require it to be qualified to do business,
except where the failure to so qualify will not have a Material Adverse
Effect. Each Covered Person has the power and authority to own its
properties and carry on its business as now being conducted.
13.2. Authorization. Each Covered Person is duly
authorized to execute and perform every Loan Document to which such
Covered Person is a party, and Borrower is duly authorized to borrow
hereunder, and this Agreement and the other Loan Documents have been
duly authorized by all requisite corporate action of each Covered
Person. No consent, approval or authorization of, or declaration or
filing with, any Governmental Authority, and no consent of any other
Person, is required in connection with Borrower's execution, delivery
or performance of this Agreement and the other Loan Documents, except
for those already duly obtained.
13.3. Due Execution. Every Loan Document to which a
Covered Person is a party has been executed on behalf of such Covered
Person by a Person duly authorized to do so.
13.4. Enforceability of Obligations. Each of the Loan
Documents to which a Covered Person is a party constitutes the legal,
valid and binding obligation of such Covered Person, enforceable
against such Covered Person in accordance with its terms, except to the
extent that the enforceability thereof against such Covered Person may
be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by equitable
principles of general application.
13.5. Burdensome Obligations. No Covered Person is a party
to or bound by any Contract or is subject to any provision in the
Charter Documents of such Covered Person which would, if performed by
such Covered Person, result in a Default or Event of Default either
immediately or upon the elapsing of time.
13.6. Legal Restraints. The execution of any Loan Document
by a Covered Person will not violate or constitute a default under the
Charter Documents of such Covered Person, any Material Agreement of
such Covered Person, or any Material Law, and will not, except as
expressly contemplated or permitted in this Agreement, result in any
Security Interest being imposed on any of such Covered Person's
property. The performance by any Covered Person of its obligations
under any Loan Document to which it is a party will not violate or
constitute a default under the Charter Documents of such Covered
Person, any Material Agreement of such Covered Person, or any Material
Law, and will not, except as expressly contemplated or permitted in
this Agreement, result in any Security Interest being imposed on any of
such Covered Person's property.
13.7. Labor Contracts and Disputes. There is no collective
bargaining agreement or other labor contract covering employees of a
Covered Person. No union or other labor organization is seeking to
organize, or to be recognized as, a collective bargaining unit of
employees of a Covered Person. There is no pending or, to Borrower's
knowledge, threatened, strike, work stoppage, material unfair labor
practice claim or other material labor dispute against or affecting any
Covered Person or its employees.
13.8. No Material Proceedings. There are no Material
Proceedings pending or, to the best knowledge of Borrower, threatened.
13.9. Material Licenses. All Material Licenses have been
obtained or exist for each Covered Person.
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13.10. Compliance with Material Laws. Each Covered Person
is in compliance with all Material Laws. Without limiting the
generality of the foregoing:
13.10.1. General Compliance with Environmental and Employment
Laws. The operations and employee compensation practices of every
Covered Person comply in all material respects with all applicable
Environmental Laws and Employment Laws.
13.10.2. Proceedings. None of the operations of any Covered
Person are the subject of any judicial or administrative complaint,
order or proceeding alleging the violation of any applicable
Environmental Laws or Employment Laws.
13.10.3. Investigations Regarding Hazardous Materials. None
of the operations of any Covered Person are the subject of
investigation by any Governmental Authority regarding the improper
transportation, storage, disposal, generation or release into the
environment of any Hazardous Material, the results of which may have a
Material Adverse Effect on such Covered Person, or reduce materially
the value of the Collateral.
13.10.4. Notices and Reports Regarding Hazardous Materials.
No notice or report under any Environmental Law indicating a past or
present spill or release into the environment of any Hazardous Material
has been filed within the immediately preceding four fiscal years, or
is required to be filed by any Covered Person.
13.10.5. Hazardous Materials on Real Property. No Covered
Person, nor to Borrower's knowledge, any other Person, has at any time
transported, stored, disposed of, generated or released any Hazardous
Material on the surface, below the surface, or within the boundaries of
any real property owned or operated by such Covered Person or any
improvements thereon, except for transportation or storage in the
ordinary course of business and in compliance with all applicable
Laws. Borrower has no knowledge of any Hazardous Material on the
surface, below the surface, or within the boundaries of any real
property owned or operated by such Covered Person or any improvements
thereon. No property of such Covered Person is subject to a Security
Interest in favor of any Governmental Authority for any liability under
any Environmental Law or damages arising from or costs incurred by such
Governmental Authority in response to a spill or release of Hazardous
Material into the environment.
13.10.6. Environmental Property Transfer Acts. No
Environmental Property Transfer Acts are applicable to the transactions
contemplated by this Agreement or any Acquisition Documents and
Borrower has provided all notices and obtained all necessary
environmental permit transfers and consents, if any, required in order
to consummate the transactions contemplated by this Agreement or the
Acquisition Documents, to perfect Administrative Agent's Security
Interests for the benefit of the Lenders and to operate Borrower's
business as presently or proposed to be operated.
13.11. Other Names. No Covered Person has used any name
other than the full name which identifies such Covered Person in this
Agreement. The only trade name or style under which a Covered Person
sells Inventory or creates Accounts, or to which instruments in payment
of Accounts are made payable, is the name which identifies such Covered
Person in this Agreement.
13.12. Prior Transactions. Since January 16, 1996, no
Covered Person has been a party to any merger or consolidation, or
acquired all or substantially all of the assets of any Person, or
acquired any of its property outside of the ordinary course of business
or pursuant to the provisions hereof.
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13.13. Capitalization. Each Borrower's authorized capital
stock and issued and outstanding capital stock is as described in
section 13.13 of the Disclosure Schedule, and all issued and out-
standing shares of each Borrower are validly issued and outstanding,
fully paid, and non-assessable.
13.14. Solvency. Each Borrower is presently Solvent.
13.15. Financial Statements. The Initial Financial
Statements are complete and correct in all material respects, have been
prepared in accordance with GAAP, and fairly reflect the financial
condition, results of operations and cash flows of the Persons covered
thereby as of the dates and for the periods stated therein.
13.16. No Change in Condition. Since the date of the
Initial Financial Statements delivered to Administrative Agent, there
has been no change which would have a Material Adverse Effect on any
Covered Person.
13.17. No Defaults. No Covered Person has breached or
violated or has defaulted under any Material Agreement, or has
defaulted with respect to any Material Obligation of such Covered
Person. No Default has occurred which is continuing and no Event of
Default has occurred.
13.18. Investments. No Covered Person has any Investments
in other Persons except existing Permitted Investments.
13.19. Indebtedness. No Covered Person has any Indebtedness
except existing Permitted Indebtedness.
13.20. Indirect Obligations. No Covered Person has any
Indirect Obligations except existing Permitted Indirect Obligations.
13.21. Encumbrances. None of the real property purported to
be owned by a Covered Person is subject to any Encumbrances except
existing Permitted Encumbrances.
13.22. Operating Leases. No Covered Person has an interest
as lessee under any Operating Leases other than leases of non-material
items office equipment.
13.23. Capital Leases. No Covered Person has an interest as
a lessee under any Capital Leases other than Capital Leases that are
Permitted Indebtedness.
13.24. Tax Liabilities; Governmental Charges. Each Covered
Person has filed or caused to be filed all tax reports and returns
required to be filed by it with any Governmental Authority, except
where extensions have been properly obtained or where failure to file
is not reasonably likely to have a Material Adverse Effect. Each
Covered Person has paid or made adequate provision for payment of all
Taxes of such Covered Person, except Taxes which are being diligently
contested in good faith by appropriate proceedings and as to which such
Covered Person has established adequate reserves in conformity with
GAAP. No Security Interests for any such Taxes has been filed and no
claims are being asserted with respect to any such Taxes which, if
adversely determined, would have a Material Adverse Effect on such
Covered Person. The federal income tax returns of every Covered Person
have been audited by the Internal Revenue Service and passed upon
without exception for all fiscal years of Borrower ended on or prior to
December 31, 1989, or the period during which any assessments may be
made by the IRS with respect to such returns has expired without waiver
or extension. There are no material unresolved issues concerning any
liability of a Covered Person for any Taxes which, if adversely
determined, would have a Material Adverse Effect on such Covered Person.
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13.25. Pension Benefit Plans. All Pension Benefit Plans
maintained by each Covered Person or an ERISA Affiliate qualify under
Section 401 of the Code and are in compliance with the provisions of
ERISA. Except with respect to events or occurrences which would not
have a Material Adverse Effect:
13.25.1. Prohibited Transactions. None of such Pension
Benefit Plans has participated in, engaged in or been a party to any
non-exempt prohibited transaction as defined in ERISA or the Code, and
no officer, director or employee of a Covered Person or of an ERISA
Affiliate has committed a breach of any of the responsibilities or
obligations imposed upon fiduciaries by Title I of ERISA.
13.25.2. Claims. There are no claims, pending or threatened,
involving any such Pension Benefit Plan by a current or former employee
(or beneficiary thereof) of such Covered Person or ERISA Affiliate, nor
is there any reasonable basis to anticipate any claims involving any
such Pension Benefit Plan which would likely be successfully maintained
against such Covered Person or ERISA Affiliate.
13.25.3. Reporting and Disclosure Requirements. There are no
violations of any reporting or disclosure requirements with respect to
any such Pension Benefit Plan and none of such Pension Benefit Plans
has violated any applicable Law, including ERISA and the Code.
13.25.4. Accumulated Funding Deficiency. No such Pension
Benefit Plan has (i) incurred an accumulated funding deficiency
(within the meaning of Section 412(a) of the Code), whether or not
waived; (ii) been a Pension Benefit Plan with respect to which a
Reportable Event (to the extent that the reporting of such events to
the PBGC within thirty days of the occurrence has not been waived) has
occurred and is continuing; or (iii) been a Pension Benefit Plan with
respect to which there exist conditions or events which have occurred
that present a significant risk of termination of such Pension Benefit
Plan by the PBGC.
13.25.5. Multi-employer Plan. All Multi-employer Plans to
which any Covered Person contributes or is obligated to contribute are
listed in Section 13.25.5 of the Disclosure Schedule. No Covered Person
or ERISA Affiliate has received notice that any such Multi-employer
Plan is in reorganization or has been terminated within the meaning of
Title IV of ERISA, and no such Multi-employer Plan is reasonably
expected to be in reorganization or to be terminated within the meaning
of Title IV of ERISA.
13.26. Welfare Benefit Plans. No Covered Person or ERISA
Affiliate maintains a Welfare Benefit Plan that has a liability which,
if enforced or collected, would have a Material Adverse Effect. Each
Covered Person and ERISA Affiliate has complied in all material
respects with the applicable requirements of Section 4980B of the Code
pertaining to continuation coverage as mandated by COBRA.
13.27. Retiree Benefits. No Covered Person or ERISA
Affiliate has an obligation to provide any Person with any medical,
life insurance, or similar benefit following such Person's retirement
or termination of employment (or to such Person's beneficiary
subsequent to such Person's death) other than (i) such benefits
provided to Persons at such Person's sole expense and (ii) obligations
under COBRA.
13.28. Distributions. No Distribution as defined in
Section 16.9 has been declared, paid or made upon or in respect of any
capital stock or other Securities of Borrower on and after the
Execution Date, except as expressly permitted hereby.
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13.29. Real Property. Section 13.29 of the Disclosure
Schedule contains a correct and complete list of (i) the street
addresses and a general description of all real property owned by
Borrower, and (ii) a list of all leases and subleases of real property
by Borrower, with Borrower identified for each as the lessee, sublessee,
lessor, or sublessor, as is the case, together with the street
addresses and a general description of the real property involved and
the names of the other parties to such leases and subleases. Each of
such leases and subleases is valid and enforceable in accordance with
its terms and is in full force and effect, and no default by any party
to any such lease or sublease exists. Attachment 1 to the Disclosure
Schedule contains the legal escriptions from the most recent evidences
of title to all the real property in which Administrative Agent will
have a Security Interest under a Mortgage as provided in Section 8.2.
13.30. State of Collateral and other Property. Each Covered
Person has good and marketable or merchantable title to all real and
personal property purported to be owned by it or reflected in the
Initial Financial Statements, except for personal property sold in the
ordinary course of business after the date of the Initial Financial
Statements. There are no Security Interests on any of the property
purported to be owned by any Covered Person, including the Collateral,
except existing Permitted Security Interests. Each tangible item of
Personal Property Collateral purported to be owned by a Covered Person
is in good operating condition and repair and is suitable for the use
to which it is customarily put by its owner. Without limiting the
generality of the foregoing:
13.30.1. Accounts. With respect to each Account scheduled,
listed or referred to in reports submitted by Borrower to
Administrative Agent pursuant to the Loan Documents, except as
disclosed therein: (i) the Account arose from a bona fide transaction
completed in accordance with the terms of any documents pertaining to
such transaction; (ii) the Account is not evidenced by a judgment and
there is no material dispute respecting it; (iii) the amount of the
Account as shown on Borrower's books and records and all invoices and
statements which may be delivered to Administrative Agent with respect
thereto are actually and absolutely owing to Borrower and are not in
any way contingent; (iv) there are no set-offs, counterclaims or
disputes existing or asserted with respect to the Account and Borrower
has not made any agreement with any Account Debtor for any deduction
therefrom except a discount or allowance allowed by Borrower in the
ordinary course of its business for prompt payment; (v) there are no
facts, events or occurrences which in any way impair the validity or
enforcement of the Account or tend to reduce the amount payable
thereunder as shown on Borrower's books and records and all invoices
and statements delivered to Administrative Agent with respect thereto;
(vi) the Account is assignable; (vii) the Account arose in the ordinary
course of Borrower's business; (viii) the Account Debtor with respect
to the Account has the capacity to contract; (ix) the services
furnished and/or goods sold giving rise to the Account are not subject
to any Security Interest except the first priority, perfected Security
Interest granted to Administrative Agent for the benefit of Lenders and
except the Permitted Security Interests; (x) there are no proceedings
or actions which are threatened or pending against the Account Debtor
with respect to the Account; and (xi) no payments have been or shall be
made on the Account except payments promptly delivered to
Administrative Agent or to other financial institutions approved by
Administrative Agent pursuant to this Agreement.
13.30.2. Inventory. With respect to Inventory scheduled,
listed or referred to in any certificate, schedule, list or report
given by Borrower, except as disclosed therein: (i) such Inventory
(except for Inventory in transit) is located at one or another of the
premises listed in section 13.30.2 of the Disclosure Schedule; (ii)
Borrower has good and merchantable title to such Inventory subject
to no Security Interest whatsoever except for the first priority,
perfected Security Interest granted to Administrative Agent for the
benefit of Lenders and except for existing Permitted Security nterests;
(iii) such Inventory is of good and
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merchantable quality, free from any material defects; (iv) such
Inventory is not subject to any licensing, patent, royalty, trademark,
trade name or copyright agreements with any third parties; and (v) the
completion of manufacture and sale or other disposition of such
Inventory by Administrative Agent or Lenders following an Event of
Default shall not require the consent of any Person and shall not
constitute a breach or default under any contract or agreement to which
Borrower is a party or to which the Inventory is subject.
13.30.3. Equipment. With respect to the Borrower's equipment:
(i) Borrower has good and marketable title thereto; (ii) none of such
equipment is subject to any Security Interest except for the first
priority Security Interest granted to Administrative Agent for the
benefit of Lenders pursuant hereto and except for Permitted Security
Interests; and (iii) all such equipment is in good operating condition
and repair, ordinary wear and tear alone excepted, and is suitable for
the uses to which customarily put in the conduct of Borrower's business.
13.30.4. Intellectual Property. (i) Section 13.30.4 of the
Disclosure Schedule contains a complete and correct list of all of
Borrower's Intellectual Property, (ii) Borrower owns all right, title
and interest in, under and to such Intellectual Property, subject to no
licenses or any interest therein or other agreements relating thereto,
except for the Intellectual Property Assignments; (iii) no Intellectual
Property or grant of license by or to Borrower is subject to any
pending or, to Borrower's knowledge, threatened challenge; (iv) to
Borrower's knowledge, Borrower has not committed any patent, trademark,
trade name, service mark or copyright infringement, and the present
conduct of Borrower's business does not infringe any patents,
trademarks, trade name rights, service marks, copyrights, publication
rights, trade secrets or other proprietary rights of any Person; and
(v) there are no claims or demands of any Person pertaining to, or any
proceedings which are pending or, to Borrower's knowledge, threatened,
which challenge Borrower's rights in respect of any proprietary or
confidential information or trade secrets used in the conduct of
Borrower's business.
13.30.5. Documents, Instruments and Chattel Paper. All
documents, instruments and chattel paper describing, evidencing or
constituting Collateral, and all signatures and endorsements thereon,
are complete, valid, and genuine, and all goods evidenced by such
documents, instruments and chattel paper are owned by Borrower free and
clear of all Security Interests other than Permitted Security Interests.
13.31. Chief Place of Business; Locations of Collateral. As
of the Execution Date,
13.31.1. the only chief executive office and the principal
places of business of Borrower are located at the places listed and so
identified in section 13.31.1 of the Disclosure Schedule;
13.31.2. the books and records of Borrower, and all of
Borrower's chattel paper and all records of Accounts, are located only
at the places listed and so identified in section 13.31.2 of the
Disclosure Schedule; and
13.31.3. all of the Collateral (except for Inventory which
is in transit and Borrower's Real Property Collateral) is located only
at the places listed and so identified in section 13.31.3 of the
Disclosure Schedule.
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13.32. Negative Pledges. No Covered Person is a party to or
bound by any Contract which prohibits the creation or existence of any
Security Interest upon or assignment or conveyance of any of the
Collateral except Contracts in favor of Lenders.
13.33. Security Documents.
13.33.1. Security Agreements. Each Security Agreement is
effective to grant to Administrative Agent for the benefit of Lenders
an enforceable Security Interest in all rights, title and interest of
Borrower in the Personal Property Collateral described therein. Upon
appropriate filing (as to all Personal Property Collateral in which a
Security Interest may be perfected under the applicable state's UCC by
filing a financing statement) or Administrative Agent's taking
possession (as to items of the Personal Property Collateral of which a
secured party must take possession in order to perfect a Security
Interest under the applicable state's UCC), Administrative Agent will
have a fully perfected first priority Security Interest in the Personal
Property Collateral described in each Security Agreement, subject only
to Permitted Security Interests affecting such Personal Property
Collateral.
13.33.2. Mortgages. The Mortgages are effective to grant to
Administrative Agent for the benefit of Lenders a legal, valid and
enforceable mortgage lien on the Real Property Collateral. Upon proper
recording and payment of recording fees and taxes, if any,
Administrative Agent will have for the benefit of Lenders a fully
perfected first priority lien on the Real Property Collateral subject
only to Permitted Security Interests affecting the Real Property
Collateral.
13.33.3. Intellectual Property Assignments. Each Intellectual
Property Assignment is effective to assign to Administrative Agent for
the benefit of Lenders all of Borrower's rights, title and interest in
and to the Intellectual Property, subject only to Permitted Security
Interests affecting the Intellectual Property.
13.33.4. Account Assignment. The Account Assignment is
effective to grant to Administrative Agent for the benefit of Lenders
an enforceable Security Interest in all rights, title and interest of
Borrower in the Cash Collateral Account.
13.33.5. Stock Pledge Agreement. Each Stock Pledge Agreement
is effective to grant to Administrative Agent for the benefit of
Lenders a Security Interest in all of Borrower's rights and interest in
the stock and other Securities described therein.
13.33.6. Acquisition Documents Assignments. Each Acquisition
Documents Assignment is effective to grant to Administrative Agent for
the benefit of Lenders an enforceable Security Interest in and lien on
all of Borrower's rights, remedies, claims and interests under the
related Acquisition Documents.
13.34. S Corporation. There is no election in effect under
Section 1362(a) of the Code for Borrower to be treated as an S
Corporation as defined in Section 1361(a) of the Code.
13.35. Subsidiaries and Affiliates. Each Borrower has no
Affiliates who are not individuals and has no Subsidiaries other than
those listed in section 13.35 of the Disclosure Schedule.
13.36. Bank Accounts and Lockboxes. Borrower has no lockbox
other than the lockboxes allowed or required hereunder. All bank
accounts maintained by Borrower with any bank or other financial
institution are described in section 13.36 of the Disclosure Schedule.
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13.37. Margin Stock. Borrower is not engaged and will not
engage, principally or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U), and no part of the
proceeds of any Advance will be used to purchase or carry any such
margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock or for any purpose which
violates, or which would be inconsistent with, the provisions of
Regulation U or Regulation G. None of the transactions contemplated by
any Acquisition Documents will violate Regulations G, T, U or X of the
FRB.
13.38. Securities Matters. No proceeds of any Advance will
be used to acquire any security in any transaction which is subject to
Sections 13 and 14 of the Securities Exchange Act of 1934, as amended.
13.39. Investment Company Act, Etc. Borrower is not an
investment company registered or required to be registered under the
Investment Company Act of 1940, as amended, or a company controlled
(within the meaning of such Investment Company Act) by such an
investment company or an affiliated person of, or promoter or principal
underwriter for, an investment company, as such terms are defined in
the Investment Company Act of 1940, as amended. Borrower is not
subject to regulation under the Public Utility Holding Company Act of
1935, the Federal Power Act, the Interstate Commerce Act or any other
Law limiting or regulating its ability to incur Indebtedness for money
borrowed.
13.40. No Material Misstatements or Omissions. Neither the
Loan Documents, any of the Financial Statements nor any statement,
list, certificate or other information furnished or to be furnished by
Borrower to Administrative Agent or Lenders in connection with the Loan
Documents or any of the transactions contemplated thereby contains or
any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements therein not misleading. Borrower
has disclosed to Administrative Agent and Lenders everything regarding
the business, operations, property, financial condition, or business
prospects or itself and every Covered Person that would have a Material
Adverse Effect on Borrower or any Covered Person.
13.41. Filings. All registration statements, reports, proxy
statements and other documents, if any, required to be filed by
Borrower with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, have been filed, and such filings are complete and
accurate and contain no untrue statements of material fact or omit to
state any material facts required to be stated therein or necessary in
order to make the statements therein not misleading.
13.42. Broker's Fees. No broker or finder is entitled to
compensation for services rendered with respect to the loan
transactions contemplated by this Agreement and the other Loan
Documents.
13.43. Eligibility of Collateral. Each Account or item of
Inventory which Borrower, expressly or by implication, requests
Administrative Agent to classify as an Eligible Account or as Eligible
Inventory, respectively, will, as of the time when such request is
made, conform in all respects to the requirements of such
classification set forth in the respective definitions of "Eligible
Accounts" and "Eligible Inventory" herein.
14. Survival of Representations. All representations and
warranties in Section 13, and all representations and warranties in any
certificate delivered by Borrower pursuant hereto, shall survive
execution of each of the Loan Documents and the making of every
Advance, and may be relied upon by Administrative Agent and Lenders as
being true and correct as of the date when made or deemed made or
reaffirmed until all of the Loan Obligations are fully and irrevocably
paid as contemplated in Section 6.6.
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15. Affirmative Covenants. Borrower covenants and agrees that, so
long as any of the Commitments remains in effect or any of the Loan
Obligations are owing to Lenders by Borrower or any Letters of Credit
are outstanding, Borrower shall do, or cause to be done, the following:
15.1. Use of Proceeds. Subject to the terms and conditions
hereof, (i) the proceeds of the Term Advance shall be used only for
repayment of the Prior Senior Indebtedness, Capital Expenditures and
general corporate purposes; (ii) the proceeds of all Revolving Advances
and Swingline Advances shall be used solely for repayment of the Prior
Senior Indebtedness, Capital Expenditures, Permitted Acquisitions,
working capital and general corporate purposes, including for payment
of Borrower's reimbursement obligations with respect to draws on
Letters of Credit; (iii) the proceeds of Post-Offering Acquisition
Advances shall be used to pay the consideration and post-closing
expenses and fees payable by Borrower in connection with Permitted
Acquisitions consummated during the Post-Offering Acquisition Loan
Availability Period; and (iv) the proceeds of General Acquisition
Advances shall be used to pay the consideration and post-closing
expenses and fees payable by Borrower in connection with Permitted
Acquisitions consummated within one year of the Execution Date.
15.2. Corporate Existence. Each Covered Person shall
maintain its existence in good standing and shall maintain in good
standing its right to transact business in those jurisdictions in which
it is now or hereafter doing business, except where the failure to so
qualify will not have a Material Adverse Effect. Each Covered Person
shall obtain and maintain all Material Licenses for such Covered Person.
15.3. Maintenance of Property and Leases. Each Covered
Person shall maintain in good condition and working order, and repair
and replace as required, all buildings, equipment, machinery, fixtures
and other real and personal property whose useful economic life has not
elapsed and which is necessary for the ordinary conduct of the business
of such Covered Person. Each Covered Person shall maintain in good
standing and free of defaults all of its leases of buildings,
equipment, machinery, fixtures and other real and personal property
whose useful economic life has not elapsed and which is necessary for
the ordinary conduct of the business of such Covered Person. Borrower
shall not permit any of its equipment or other property to become a
fixture to real property or an accession to other personal property
unless Administrative Agent has a valid, perfected and first priority
Security Interest for the benefit of Lenders in such real or personal
property. Borrower shall not, without Administrative Agent's prior
written consent, alter or remove any identifying symbol or number on
its equipment.
15.4. Inventory. Borrower shall keep its Inventory in good
and merchantable condition at its own expense and shall hold such
Inventory for sale or lease, or to be furnished in connection with the
rendition of services, in the ordinary course of Borrower's business,
on terms which do not include bill-and-hold, guaranteed sale, sale and
return, sale on approval, consignment or similar repurchase or return
terms. All such Inventory shall be produced in accordance with the
Federal Fair Labor Standards Act of 1938 and all rules, regulations,
and orders thereunder.
15.5. Insurance. Each Covered Person shall at all times
keep insured or cause to be kept insured, in insurance companies having
a rating of at least "A" by Best's Rating Service, all property owned
by it of a character usually insured by others carrying on businesses
similar to that of such Covered Person in such manner and to such
extent and covering such risks as such properties are usually insured.
Each Covered Person shall at all times carry insurance, in insurance
companies having a rating of at least "A" by Best's Rating Service,
against liability on account of damage to persons or property
(including product liability insurance and insurance required under all
applicable workers' compensation laws) and covering all other
liabilities common to such Covered Person's business, in such manner
and to such extent as such coverage is usually carried by others
conducting businesses similar to that of such Covered Person. All
policies of liability insurance maintained hereunder shall name
Administrative Agent as an additional
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insured for the ratable benefit of Lenders; all fire and casualty
policies of insurance maintained hereunder shall reflect Lenders'
interests therein as mortgagees under a standard New York or Union
mortgagee clause. Administrative Agent is authorized, but not obligated,
as the attorney-in-fact for Borrower and for the benefit of Lenders, (i)
prior to the occurrence of an Event of Default, with Borrower's consent
(which consent shall not be unreasonably withheld), and upon the
occurrence of an Event of Default, without Borrower's consent, to adjust
and compromise proceeds payable under such policies of insurance, (ii)
to collect, receive and give receipts for such proceeds in the name
of Borrower, Administrative Agent and the Lenders, and (iii) to endorse
Borrower's name upon any instrument in payment thereof. Such power
granted to Administrative Agent shall be deemed coupled with an
interest and shall be irrevocable. All policies of insurance maintained
hereunder shall contain a clause providing that such policies may not be
canceled, reduced in coverage or otherwise modified without 30 days
prior written notice to Administrative Agent. Borrower shall upon
request of Administrative Agent at any time furnish to Administrative
Agent updated evidence of insurance (in the form required as a condition
to Administrative Agent's lending hereunder) for such insurance.
15.6. Payment of Taxes and Other Obligations. Each Covered
Person shall promptly pay and discharge or cause to be paid and
discharged, as and when due, any and all income taxes, federal or
otherwise, lawfully assessed and imposed upon it, and any and all
lawful taxes, rates, levies, and assessments whatsoever upon its
properties and every part thereof, or upon the income or profits
therefrom and all claims of materialmen, mechanics, carriers,
warehousemen, landlords and other like Persons for labor, materials,
supplies, storage or other items or services which if unpaid might be
or become a Security Interest or charge upon any of its property;
provided, however, that a Covered Person may diligently contest in good
faith by appropriate proceedings the validity of any such taxes, rates,
levies, or assessments, provided such Covered Person has established
adequate reserves therefor in conformity with GAAP on the books of such
Covered Person, and no Security Interest, other than a Permitted
Security Interest, results from such non-payment.
15.7. Compliance With Laws. Each Covered Person shall
comply with all Material Laws. Without limiting the generality of the
foregoing:
15.7.1. Environmental Laws. Each Covered Person shall comply
and shall use commercially reasonable efforts to ensure compliance by
all tenants, subtenants and other occupants, if any, with all
Environmental Laws.
15.7.2. Pension Benefit Plans. Each Covered Person and each
ERISA Affiliate shall at all times make prompt payments or
contributions to meet the minimum funding standards under ERISA and the
Code with respect to any Pension Benefit Plan maintained by such
Covered Person or ERISA Affiliate, and shall comply with all reporting
and disclosure requirements and all provisions of the Code and ERISA
applicable to any Pension Benefit Plan maintained by such Covered
Person or ERISA Affiliate.
15.7.3. Employment Laws. Each Covered Person shall comply
with all requirements of all Employment Laws applicable to such Covered
Person.
15.8. Discovery and Clean-Up of Hazardous Material.
15.8.1. In General. Upon any Covered Person receiving notice
of any violation of Environmental Laws or any similar notice described
in Section 15.10.4, or upon any Covered Person otherwise discovering
Hazardous Material on any property owned or leased by such Covered
Person which is in violation of, or which would result in liability
under, any Environmental Law, Borrower shall: (i) promptly take such
acts as may be
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necessary to prevent danger or harm to the property or any person
therein as a result of such Hazardous Material; (ii) at the request of
Administrative Agent, and at Borrower's sole cost and expense, obtain
and deliver to Administrative Agent promptly, but in no event later
than 90 days after such request, a then currently dated environmental
assessment of the property certified to Administrative Agent and any
future holder of the Loan Obligations, a proposed plan for responding
to any environmental problems described in such assessment, and an
estimate of the costs thereof; and (iii) take all necessary steps to
initiate and expeditiously complete all removal, remedial, response,
corrective and other action to eliminate any such environmental
problems, and keep Administrative Agent informed of such actions and
the results thereof.
15.8.2. Asbestos Clean-Up. In the event that any property of
any Covered Person contains Asbestos Material, Borrower shall develop
and implement, as soon as reasonably possible, an Operations and
Maintenance Program (as contemplated by EPA guidance document entitled
"Managing Asbestos in Place; A Building Owner's Guide to Operations and
Maintenance Programs for Asbestos-Containing Materials") for managing
in place the Asbestos Material, and deliver a true, correct and
complete copy of such Operations and Maintenance Program to
Administrative Agent. In the event that the asbestos survey done in
connection with developing the Operations and Maintenance Program
reveals Asbestos Material which, due to its condition, location or
planned building renovation, is recommended to be encapsulated or
removed, Borrower shall promptly cause the same to be encapsulated or
removed and disposed of offsite, in either case by a licensed and
experienced asbestos contractor, all in accordance with applicable
state, federal and local Laws. Upon completion of any such
encapsulation or removal, Borrower shall deliver to Administrative
Agent a certificate in such form as is then customarily available
signed by the consultant overseeing the activity certifying to
Administrative Agent that the work has been completed in compliance
with all applicable Laws regarding notification, encapsulation, removal
and disposal and that no airborne fibers beyond permissible exposure
limits remain on site. All costs of such inspection, testing and
remedial actions shall be paid by Borrower.
15.9. Termination of Pension Benefit Plan. No Covered
Person or ERISA Affiliate shall terminate or amend any Pension Benefit
Plan maintained by such Covered Person or ERISA Affiliate if such
termination or amendment would result in any liability to such Covered
Person or ERISA Affiliate under ERISA or any increase in current
liability for the plan year for which such Covered Person or ERISA
Affiliate is required to provide security to such Pension Benefit Plan
under the Code.
15.10. Notice to Co-Arrangers of Material Events. Borrower
shall, promptly upon any Responsible Officer of Borrower obtaining
knowledge or notice thereof, give notice to Co-Arrangers of (i) any
breach of any of the covenants in Section 15, 16, or 17; (ii) any
Default or Event of Default; (iii) the commencement of any Material
Proceeding; and (iv) any loss of or damage to any assets of a Covered
Person or the commencement of any proceeding for the condemnation or
other taking of any of the assets of a Covered Person, if Insurance/
Condemnation Proceeds are likely to be payable as a consequence of such
loss, damage or proceeding, or if such loss, damage or proceeding
has or is reasonably likely to have a Material Adverse Effect on such
Covered Person. In addition,
15.10.1. Borrower shall furnish to Co-Arrangers from time to
time all information which Co-Arrangers request with respect to the
status of any Material Proceeding.
15.10.2. Borrower shall furnish to Co-Arrangers from time to
time all information which Co-Arrangers request with respect to any
Pension Benefit Plan established by a Covered Person or ERISA Affiliate.
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15.10.3. Borrower shall deliver notice to Co-Arrangers of the
establishment by a Covered Person or an ERISA Affiliate of any Pension
Benefit Plan.
15.10.4. Borrower shall promptly inform Co-Arrangers of its
receipt of, and deliver to Co-Arrangers a copy of, any (i) notice that
any violation of any Environmental Law or Employment Law may have been
committed or is about to be committed by any Covered Person,
(ii) notice that any administrative or judicial complaint or order has
been filed or is about to be filed against any Covered Person alleging
violations of any Environmental Law or Employment Law or requiring such
Covered Person to take any action in connection with the release of any
Hazardous Material into the environment, (iii) notice from a
Governmental Authority or private party alleging that a Covered Person
may be liable or responsible for costs associated with a response to or
cleanup of a release of Hazardous Material into the environment or any
damages caused thereby, (iv) notice that a Covered Person is subject to
federal, state or local investigation regarding the improper
transportation, storage, disposal, generation or release into the
environment of any Hazardous Material, or (v) notice that any
properties or assets of a Covered Person are subject to a Security
Interest in favor of any Governmental Authority for any liability under
any Environmental Law or damages arising from or costs incurred by such
Governmental Authority in response to a release of Hazardous Material
into the environment.
15.10.5. Borrower shall deliver to Co-Arrangers notice of the
following events promptly after they occur: (i) the failure of any
Covered Person or ERISA Affiliate to make any required installment or
any other required payment to any Pension Benefit Plan in sufficient
amount to comply with ERISA and the Code on or before the due date for
such installment or payment; (ii) the occurrence of any Reportable
Event, or a prohibited transaction or accumulated funding deficiency
(as those terms are defined in ERISA), with respect to any Pension
Benefit Plan maintained or contributed to by a Covered Person or ERISA
Affiliate; (iii) receipt by a Covered Person or ERISA Affiliate of any
notice from a Multi-employer Plan regarding the imposition of
withdrawal liability; and (iv) receipt by a Covered Person or ERISA
Affiliate of any notice of the institution, or a Covered Person's
expectancy of the institution, of any proceeding or receipt by such
Covered Person or ERISA Affiliate of any notice of the taking, or such
Covered Person's expectancy of the taking, of any other action which
may result in the termination of any Pension Benefit Plan maintained or
contributed to by such Covered Person or ERISA Affiliate, or the
withdrawal or partial withdrawal by a Covered Person or ERISA Affiliate
from any Pension Benefit Plan, and the filing or receipt by a Covered
Person or ERISA Affiliate of any such notice and filing or receipt of
all subsequent reports or notices under ERISA with or from the IRS, the
PBGC, or the DOL relating to the same; and, in addition to such notice,
deliver to Co-Arrangers a certificate of a Responsible Officer of
Borrower, setting forth details as to such events and the action that
the affected Covered Person or ERISA Affiliate proposes to take with
respect thereto. For purposes of this Section, Borrower and any ERISA
Affiliate shall be deemed to know all facts known by the administrator
of any Plan of which Borrower or any ERISA Affiliate is the plan
sponsor.
15.10.6. Borrower shall promptly deliver to Co-Arrangers
notice of any default or event of default, or the occurrence of any
event which would with the passage of time, giving of notice or
otherwise, constitute a default or event of default with respect to any
of the Permitted Indebtedness.
15.10.7. Borrower shall promptly deliver notice to
Co-Arrangers of the assertion by the holder of any capital stock of a
Covered Person or any Indebtedness of a
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Covered Person in the outstanding principal amount in excess of
$250,000 that a default exists with respect thereto or that such
Covered Person is not in compliance with the terms thereof, or of the
threat or commencement by such holder of any enforcement action because
of such asserted default or noncompliance.
15.10.8. Borrower shall, promptly after becoming aware
thereof, deliver notice to Co-Arrangers of any pending or threatened
strike, work stoppage, material unfair labor practice claim or other
material labor dispute affecting a Covered Person.
15.10.9. Borrower shall promptly deliver notice to
Co-Arrangers of any change in the name, state of incorporation, or form
of organization of any Covered Person, or the trade names or styles
under which a Covered Person will sell Inventory or create Accounts, or
to which instruments in payment of Accounts may be made payable, at
least 30 days prior to such change.
15.10.10. Borrower shall, promptly after becoming aware
thereof, deliver notice to Co-Arrangers of any event that has or could
have a Material Adverse Effect with respect to any Covered Person.
15.10.11. Borrower shall, promptly after becoming aware
thereof, deliver notice to Co-Arrangers of an actual, alleged, or
potential violation of any Material Law applicable to a Covered Person
or the property of a Covered Person.
15.10.12. Borrower shall notify Co-Arrangers promptly in
writing of any fact or condition of which Borrower is aware which
adversely affects the value of the Collateral, including any adverse
fact or condition or the occurrence of any event which causes loss or
depreciation in the value of any item of the Collateral, and the amount
of such loss or depreciation. Borrower shall provide such additional
information to Co-Arrangers regarding the amount of any loss or
depreciation in value of the Collateral as either Co-Arranger may
request from time to time.
15.11. Borrowing Officer. Borrower's Representative shall
keep on file with Administrative Agent at all times an appropriate
instrument naming each Borrowing Officer.
15.12. Maintenance of Security Interests of Security
Documents.
15.12.1. Preservation and Perfection of Security Interests.
Borrower shall promptly, upon the reasonable request of Administrative
Agent and at Borrower's expense, execute, acknowledge and deliver, or
cause the execution, acknowledgment and delivery of, and thereafter
file or record in the appropriate governmental office, any document or
instrument supplementing or confirming the Security Documents or
otherwise deemed necessary by Administrative Agent to create, preserve
or perfect any Security Interest purported to be created by the
Security Documents or to fully consummate the transactions contemplated
by the Loan Documents. The foregoing actions by Borrower shall include
(i) filing financing or continuation statements, and amendments
thereof, in form and substance satisfactory to Administrative Agent;
(ii) delivering to Administrative Agent the original certificates of
title for motor vehicles, or applications therefor duly executed, with
Administrative Agent's Security Interest for the benefit of Lenders
properly shown thereon; (iii) delivering to Administrative Agent the
originals of all instruments, documents and chattel paper, and all
other Collateral of which Administrative Agent determines it should
have physical possession in order to perfect and protect Administrative
Agent's Security Interest
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for the benefit of Lenders therein, duly endorsed or assigned to
Administrative Agent without restriction; (iv) delivering to Admin-
istrative Agent warehouse receipts covering any portion of the
Collateral located in warehouses and for which warehouse receipts are
issued; (v) transferring Inventory to warehouses designated by
Administrative Agent; (vi) delivering to Administrative Agent all
letters of credit on which Borrower is named beneficiary; (vii) placing
a durable notice of the existence of Administrative Agent's Security
Interest for the benefit of Lenders, acceptable to Administrative Agent,
upon such items of the Collateral as are designated by Administrative
Agent; and (viii) placing a notice o f the existence of Administrative
Agent's Security Interest for the benefit of Lenders, acceptable to
Administrative Agent, upon those writings evidencing the Collateral
and the books and records of Borrower pertaining to the Collateral, as
designated by Administrative Agent.
15.12.2. Collateral Held by Warehouseman, Bailee, etc. If any
Collateral is at any time in the possession or control of a
warehouseman, bailee or any of Borrower's agents or processors, then
Borrower shall notify Administrative Agent thereof and shall notify
such Person of Administrative Agent's Security Interest for the benefit
of Lenders in such Collateral and, upon Administrative Agent's request,
instruct such Person to hold all such Collateral for Administrative
Agent's account subject to Administrative Agent's instructions. If at
any time any Collateral is located on any premises that are not owned
by Borrower, then Borrower shall obtain written waivers, in form and
substance satisfactory to Administrative Agent, of all present and
future Security Interests to which the owner or lessor or any mortgagee
of such premises may be entitled to assert against the Collateral.
15.12.3. Compliance With Terms of Security Documents.
Borrower shall comply with all of the terms, conditions and covenants
in the Security Documents to which Borrower is a party.
15.13. Accounting System. Each Covered Person shall
maintain a system of accounting established and administered in
accordance with GAAP. Without limiting the generality of the foregoing:
15.13.1. Account Records. Each Covered Person shall maintain
a record of Accounts at its principal place of business that itemize
each Account of such Covered Person and describe the names and
addresses of the Account Debtors on such Accounts, all relevant invoice
numbers, invoice dates, and shipping dates, and the due dates,
collection histories, and aging of such Accounts.
15.13.2. Inventory Records. Each Covered Person shall
maintain an inventory system satisfactory to Administrative Agent.
15.14. Financial Statements. Borrower shall deliver to each
Lender:
15.14.1. Annual Financial Statements. Within 120 days after
the close of each fiscal year of Borrower, year-end consolidated and
consolidating Financial Statements and Historical Combined Financial
Statements of Borrower and its Subsidiaries, containing an audit report
without qualification by an independent certified public accounting
firm selected by Borrower and satisfactory to Administrative Agent, and
accompanied by (a) a Compliance Certificate of the Chief Financial
Officer of Borrower, (b) a certificate of the independent certified
public accounting firm that examined such Financial Statements to the
effect that they have reviewed and are familiar with this Agreement and
that, in examining such Financial Statements, they did not become aware
of any fact or condition which then constituted a Default or Event of
Default, except for those, if any, described in reasonable
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detail in such certificate, (c) the management letter and report on
internal controls delivered by such independent certified public
accounting firm in connection with their audit, and (d) if requested by
Administrative Agent, any summary prepared by such independent
certified public accounting firm of the adjustments proposed by the
members of its audit team.
15.14.2. Quarterly Financial Statements. Within 45 days after
the end of each fiscal quarter of Borrower, unaudited consolidated and
consolidating Financial Statements and Historical Combined Financial
Statements of Borrower and its Subsidiaries for the quarters not
covered by the latest year-end Financial Statements, in each case
accompanied by a Compliance Certificate of the Chief Financial Officer
of Borrower.
15.14.3. Monthly Financial Statements. Within 30 days after
the end of each month, unaudited consolidated Financial Statements and
Historical Combined Financial Statements of Borrower and its
Subsidiaries for each of the months not covered by the latest year-end
Financial Statements, in each case accompanied by (i) a Compliance
Certificate of the Chief Financial Officer of Borrower, (ii) a
statement comparing such Financial Statements with budgeted projections
for such month and for the elapsed portion of the fiscal year of
Borrower as contained in the annual budget prepared for such fiscal
year, (iii) a statement comparing the statements delivered pursuant to
clause (ii) above with the statements for the equivalent months and
equivalent elapsed periods during the prior fiscal year of Borrower,
(iv) a management report explaining the significant variances of the
statements delivered pursuant to clause (ii) above from the budgeted
projections for such month and for the elapsed portion of fiscal year
of Borrower as contained in the annual budget prepared for such fiscal
year, and (v) a summary of significant items discussed at any meetings
of the Board of Directors of Borrower held during such month.
Each Compliance Certificate shall be in the form of Exhibit 15.14, shall
contain detailed calculations of the financial easurements referred
to in Section 17 for the relevant periods, and shall contain statements
by the signing officer to the effect that, except as explained in
reasonable detail in such Compliance Certificate, (i) the attached
Financial Statements are complete and correct in all material respects
(subject, in the case of Financial Statements other than annual, to
normal year-end audit adjustments) and have been prepared in accordance
with GAAP applied consistently throughout the periods covered thereby
and with prior periods (except as disclosed therein), (ii) all of the
representations and warranties of Borrower contained in this Agreement
and other Loan Documents are true and correct as of the date such
certification is given as if made on such date, and (iii) there is
no Existing Default. If any Compliance Certificate delivered to Lender
discloses that a representation or warranty is not true and correct, or
that a Default or Event of Default has occurred that has not been waived
in writing by Lender, such Compliance Certificate shall state what
action Borrower has taken or proposes to take with respect thereto.
15.15. Other Financial Information. Borrower shall also
deliver the following to Co-Arrangers:
15.15.1. Borrowing Base Certificate. On the Effective Date
and periodically thereafter, but not less often than monthly within 30
days after the end of each month, a borrowing base certificate in
substantially the form of Exhibit 15.15.1 (the "Borrowing Base
Certificate") duly completed and signed by the chief financial officer
of Borrower's Representative. If there is an Existing Default, or
the Maximum Available Amount is less than $1,000,000, Borrower shall
provide a Borrowing Base Certificate at least
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weekly and more often if so requested by either Co-Arranger in such
Co-Arranger's discretion.
15.15.2. Agings Report. Upon the request of either
Co-Arranger, within five days after the end of each month, a report of
the aging of all Accounts of Borrower in such reasonable detail as
Co-Arrangers may require.
15.15.3. Other Reports or Information Concerning Accounts or
Inventory. Such other reports and information, in form and detail
satisfactory to Co-Arrangers, and documents as either Co-Arranger may
request from time to time concerning Accounts or Inventory including,
to the extent requested by either Co-Arranger, copies of all invoices,
bills of lading, shipping receipts, purchase orders, and warehouse
receipts.
15.15.4. Stockholder and SEC Reports. Promptly after their
preparation, copies of any and all (i) proxy statements, financial
statements and reports which Borrower makes available to its
stockholders, and (ii) reports, registration statements and
prospectuses, if any, filed by Borrower with any securities exchange or
the Securities and Exchange Commission or any Governmental Authority
succeeding to any of its functions.
15.15.5. Pension Benefit Plan Reports. Upon the request of
Co-Arrangers, a copy of each annual report or other filing or notice
filed with respect to each Pension Benefit Plan of any Covered Person
or any ERISA Affiliate.
15.15.6. Tax Returns. Upon the request of either Co-Arranger,
a copy of each federal, state, or local tax return or report filed by
Borrower.
15.16. Review of Accounts. Not less often than annually,
and promptly at either Co-Arranger's request if there is an Existing
Default, Borrower shall conduct a review of its Accounts, bad debt
reserves, and collection histories of Account Debtors and promptly
following such review provide Co-Arrangers with a report of such review
in form and detail satisfactory to Co-Arrangers.
15.17. Inventory. Not less often than annually, and
promptly at either Co-Arranger's request if there is an Existing
Default, Borrower shall conduct a physical count of its Inventory and
promptly following the completion of such count provide Co-Arrangers
with a report thereof in form and detail satisfactory to Co-Arrangers,
including the value of such Inventory (on a first-in-first-out basis
and valued at the lower of cost or market).
15.18. Annual Projections. Within the 60 days following the
first day of each fiscal year of Borrower, projected balance sheets,
statements of income and expense, and statements of cash flows for
Borrower as of the end of and for each month of such fiscal year and
the next succeeding fiscal year, in such detail as either Co-Arranger
may require.
15.19. Other Information. Upon the request of either
Co-Arranger, Borrower shall promptly deliver to Co-Arrangers such other
information about the business, operations, revenues, financial
condition, property, or business prospects of Borrower as either
Co-Arranger may, from time to time, reasonably request.
15.20. Audits by Co-Arrangers; Lenders. Either Co-Arranger
or Persons authorized by and acting on behalf of such Co-Arranger, may
at any time during normal business hours audit the books and records,
and inspect any of the property, of each Covered Person from time to
time upon reasonable notice to such Covered Person. At any time after
the occurrence of an Event of Default that
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has not been cured or waived in writing any Lender may during normal
business hours audit the books and records, and inspect any of the
property, of each Covered Person from time to time upon reasonable
notice to such Covered Person. In the course of any such audit or
inspection, such Person may make copies or abstracts of such books and
records and discuss the affairs, finances and books and records of such
Covered Person with its accountants, officers and employees. Each
Covered Person hall cooperate with Co-Arrangers and such Persons in the
conduct of such audits and shall deliver to Co-Arrangers any instrument
necessary for Co-Arrangers to obtain records from any service bureau
maintaining records for such Covered Person. Borrower shall reimburse
each Co-Arranger for all costs and expenses actually incurred by it in
conducting each audit; provided, however, that if an Event of Default
has not occurred, such reimbursement for each such audit shall be
limited to $500 per day per person involved in conducting the audit
plus such Co-Arranger's other actual out-of-pocket expenses.
15.21. Verification of Accounts and Notices to Account
Debtors. Administrative Agent shall have the right at any time and
from time to time, after first giving either oral or written notice to
Borrower, to verify the validity and amount of any Account and any
other matter relating to an Account, by communicating in writing or
orally directly with the Account Debtor or any Person who represents or
Administrative Agent believes represents the Account Debtor.
15.22. Appraisals of Collateral. Upon either Co-Arranger's
reasonable request at any time, Borrower shall provide Co-Arrangers
with appraisals, prepared on a basis satisfactory to Co-Arrangers and
from appraisers acceptable to Co-Arrangers, of any or all of the
Collateral as either Co-Arranger may specify. So long as there is no
Existing Default, no more than one such appraisal per calendar year
shall be at the expense of Borrower, and any additional appraisals in
such calendar year shall be at the expense of Lenders. At any time
when there is an Existing Default, all such appraisals shall be at the
expense of Borrower.
15.23. Access to Officers and Auditors. Each Covered Person
shall permit any Lender and Persons authorized by either Co-Arranger to
discuss the affairs, finances and accounts of such Covered Person with
its officers and independent auditors as often as either Co-Arranger
may reasonably request, and such Covered Person shall direct such
officers and independent auditors to cooperate with Co-Arrangers and
make full disclosure to Co-Arrangers of those matters that they may
deem relevant to the continuing ability of Borrower timely to pay and
perform the Loan Obligations. Each Lender agrees that it will not
disclose to third parties any information that it obtains about
Borrower or its operations or finances that are designated by Borrower
as confidential or that Borrower has advised Lenders constitutes
non-public information. Lenders may, however, disclose such
information to all of their respective officers, attorneys, auditors,
accountants, bank examiners, agents and representatives who have a need
to know such information in connection with the administration,
interpretation or enforcement of the Loan Documents or the lending and
collection activity contemplated therein or to the extent required by
Law or a Governmental Authority. Lenders shall advise such persons
that such information is to be treated as confidential. A Lender may
also disclose such information in any documents that it files in any
legal proceeding to pursue, enforce or preserve its rights under the
Loan Documents to the extent that such Lender's counsel advises in
writing that such disclosure is reasonably necessary. Lenders'
non-disclosure obligation shall not apply to any information that (i)
is disclosed to a Lender by a third party not affiliated with or
employed by Borrower who does not have a commensurate duty of
non-disclosure, or (ii) becomes publicly known other than as a result
of disclosure by a Lender.
15.24. Proformas for Permitted Acquisitions; Historical
Combined Financial Statements. Borrower shall, prior to making any
Permitted Acquisition, prepare and furnish to Co-Arrangers proforma
financial statements for the Surviving Company, demonstrating to the
satisfaction of Co-Arrangers that the Surviving Company will be Solvent
upon consummation of such acquisition and upon the passage of time
thereafter, and that none of the covenants in Section 17 will be
violated as a
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consequence of such acquisition or with the passage of time thereafter.
Such proforma financial statements shall contain quarterly balance
sheets, income statements, statements of cash flows, and such other
reports and disclosures, and shall cover such forecast periods, as
either Co-Arranger may in its reasonable discretion require. Borrower
shall also provide to Co-Arrangers copies of the audited (if available,
or unaudited if no audited financial statements exist) financial
statements for the Target Company for the three fiscal years most
recently ended and for each of the completed fiscal quarters in the then
current fiscal year. Borrower shall further provide the amount of
Operating Cash Flow attributable to the Target Company quarterly for the
immediately preceding four fiscal quarters that will be included by
Borrower in its calculation of Adjusted Operating Cash Flow under this
Agreement. The financial statements and Adjusted Operating Cash Flow
must be satisfactory to Co-Arrangers in their sole discretion (i) if and
to the extent of any adjustments therein, or (ii) if unaudited.
15.25. Acquisition Documents. Borrower shall fully perform
all of its obligations under all Acquisition Documents, and shall
promptly enforce all of its rights and remedies thereunder as it deems
appropriate in its reasonable business judgment; provided, however,
that Borrower shall not take any action or fail to take any action
which would result in a waiver or other loss of any material right or
remedy of Borrower thereunder, unless such waiver or loss of a material
right or remedy would not have a Material Adverse Effect on Borrower or
any other Covered Person and Borrower's board of directors determines
by way of written resolution that such waiver or other loss of any
material right was in the best interest of Borrower. Borrower shall
not, without Co-Arrangers's prior written consent (which consent will
not be unreasonably withheld or delayed), modify, amend, supplement,
compromise, satisfy, release or discharge any of the Acquisition
Documents, any collateral securing the same, any Person liable directly
or indirectly with respect thereto, or any agreement relating to the
Acquisition Documents or the collateral therefor. Borrower shall
notify Co-Arrangers in writing promptly after Borrower becomes aware
thereof, of any event or fact which could give rise to a claim by it
for indemnification under any of the Acquisition Documents which when
aggregated with any other claim(s) which could be brought thereunder by
Borrower are reasonably determined to exceed $500,000, and shall
diligently pursue such right and report to Co-Arrangers on all further
developments with respect thereto. If Borrower fails after
Administrative Agent's demand to pursue diligently any right under any
of the Acquisition Documents, or if there is an Existing Default, then
Administrative Agent may directly enforce such right in its own or
Borrower's name and may enter into such settlements or other agreements
with respect thereto as Administrative Agent determines.
Notwithstanding the foregoing, Borrower shall at all times remain
liable to observe and perform all of its duties and obligations under
all of the Acquisition Documents, and Administrative Agent's exercise
of any of its rights with respect to the Collateral shall not release
Borrower from any of such duties or obligations. Administrative Agent
shall not be obligated to perform or fulfill any of Borrower's duties
or obligations under any of the Acquisition Documents or to make any
payment thereunder, or to make any inquiry as to the sufficiency of any
payment or property received by it thereunder or the sufficiency of
performance by any party thereunder, or to present or file any claim,
or to take any action to collect or enforce any performance or payment
of any amounts, or any delivery of any property.
15.26. Interest Rate Protection Agreements. If Borrower has
not issued equity securities in the minimum amount of $50,000,000 and
made a prepayment on the Aggregate Term Loan with the net proceeds
thereof within 120 days after the Execution Date, Borrower shall
purchase, within 150 days after the Execution Date, one or more
Interest Rate Protection Agreements with respect to an amount of the
Loan Obligations and for a period of time as shall be mutually agreed
upon among Borrower and Co-Arrangers. If, within 60 days after the
Execution Date, Borrower has determined to not effect such issuance of
equity securities, Borrower shall purchase, within 90 days after the
Execution Date, one or more Interest Rate Protection Agreements with
respect to an amount of the Loan Obligations and for a period of time
as shall be mutually agreed upon among Borrower and Co-Arrangers.
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<PAGE>
15.27. Further Assurances. Borrower shall execute and
deliver, or cause to be executed and delivered, to Administrative Agent
such documents and agreements, and shall take or cause to be taken such
actions, as Administrative Agent may from time to time request to carry
out the terms and conditions of this Agreement and the other Loan
Documents.
16. Negative Covenants.
Borrower covenants and agrees that, while any of the
Commitments remains in effect or any of the Loan Obligations are owing
to Lenders by Borrower or any of the Letters of Credit are outstanding,
Borrower shall not, directly or indirectly, do any of the following, or
permit any Covered Person to do any of the following, without the prior
written consent of Required Lenders:
16.1. Investments. Make any Investments in any other
Person except the following ("Permitted Investments"):
16.1.1. Investments in (i) interest-bearing United States
government obligations; (ii) certificates of deposit issued by any
Lender; (iii) certificates of deposit issued by and time deposits with
any Qualified Financial Institution; (iv) prime commercial paper rated
A1 or better by Standard and Poor's Corporation or Prime P1 or better
by Moody's Investor Service, Inc.; or (v) agreements involving the sale
to Borrower of United States government securities and their guarantied
repurchase the next Business Day by a Qualified Financial Institution.
16.1.2. Accounts arising in the ordinary course of business
and payable in accordance with Borrower's customary trade terms.
16.1.3. Any Investments that are Permitted Acquisitions.
16.1.4. Investments existing on the Execution Date and
disclosed in section 13.18 of the Disclosure Schedule.
16.1.5. Notes taken by Borrower from purchasers in connection
with any Management Incentive Stock Issue.
16.1.6. Indebtedness of any Borrower to any other Borrower.
Borrower may request Administrative Agent to invest on behalf of
Borrower all of the excess cash in the Cash Collateral Account as of
the end of a Business Day, but only in Permitted Investments described
in clauses (ii) and (iv) of Section 16.1.1. Any such request will only
be honored by Administrative Agent if made by a Borrowing Officer and
received by Administrative Agent before 2:00 p.m., St. Louis time, on a
Business Day; and unless a different Permitted Investment is
specifically requested, Administrative Agent will invest excess funds
in agreements involving the sale to Borrower of United States
government securities and their guarantied repurchase on the next
Business Day by Administrative Agent.
16.2. Indebtedness. Create, incur, assume, or allow to
exist any Indebtedness of any kind or description, except the following
("Permitted Indebtedness"):
16.2.1. Indebtedness to trade creditors incurred in the
ordinary course of business, to the extent that it is not overdue past
the original due date by more than 90 days.
16.2.2. The Loan Obligations.
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16.2.3. Indebtedness secured by Permitted Security Interests.
16.2.4. Indebtedness of Kalish Canada to NBD Bank, Canada in
an amount up to $3,060,000 (Cdn.), or Indebtedness of Kalish Canada
incurred in connection with the Kalish Acquisition, but not any
extensions, renewals or refundings of such Indebtedness.
16.2.5. Indebtedness of DTUK to Dresdner UK, in an amount up
to pound sterling 13,500,000, incurred in connection with the
acquisition of Swiftpack stock, but not any extensions, renewals or
refundings of such Indebtedness. Provided there are no material adverse
tax consequences to any Lender or to Borrower, Lenders will investigate,
and may require, refinancing of the Indebtedness of DTUK to Dresdner UK.
16.2.6. Indebtedness of Swiftpack to Midland Bank plc (i) in
an amount up to pound sterling 456,500 in connection with that certain
guaranty facility dated December 22, 1994 and (ii) in an amount up to
pound sterling 500,000 in connection with a proposed line of credit, but
not any extensions, renewals or refundings of such Indebtedness.
16.2.7. Indebtedness of AMI in an amount up to $200,000 to
the Pennsylvania Industrial Development Authority in connection with
the expansion of AMI's facilities, but not any extensions, renewals or
refundings of such Indebtedness
16.3. Prepayments. Voluntarily prepay any Indebtedness
other than (a) the Loan Obligations in accordance with the terms of the
Loan Documents, and (b) trade payables in the ordinary course of
business.
16.4. Indirect Obligations. Create, incur, assume or allow
to exist any Indirect Obligations except (i) Indirect Obligations
existing on the Execution Date and disclosed on section 13.20 of the
Disclosure Schedule, (ii) the Canadian Loan Guaranty, (iii) a guaranty
by DTI of the Indebtedness of Kalish Canada to NBD Bank, Canada
referred to in Section 16.2.4, (iv) a guaranty by DTI of the
indebtedness of Swiftpack to Midland Bank plc referred to in Section
16.2.6, (v) a guaranty by DTI of the Indebtedness of AMI referred to in
Section 16.2.7, (vi) guaranties of indebtedness incurred to acquire
capital assets in an amount not to exceed $1,000,000 in any Fiscal Year
and $5,000,000 n the aggregate, but only to the extent the aggregate
purchase price thereof would not (when aggregated with other Capital
Expenditures of Borrower in the same period) exceed the limits for
Capital Expenditures in Section 17.2, (vi) a guaranty by DTI of the
monetary obligations of AMI under a certain Consulting and
Noncompetition Agreement dated January 16, 1996 with Charles K. Watters,
and (vii) the Guaranties and Canadian Loan Guaranties (collectively, the
"Permitted Indirect Obligations").
16.5. Security Interests. Create, incur, assume or allow
to exist any Security Interest upon all or any part of its property,
real or personal, now owned or hereafter acquired, except in connection
with Permitted Acquisitions and the following ("Permitted Security
Interests"):
16.5.1. Security Interests for taxes, assessments or
governmental charges not delinquent or being diligently contested in
good faith and by appropriate proceedings and for which adequate book
reserves in accordance with GAAP are maintained.
16.5.2. Security Interests arising out of deposits in
connection with workers' compensation insurance, unemployment
insurance, old age pensions, or other social security or retirement
benefits legislation.
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16.5.3. Deposits or pledges to secure bids, tenders,
contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds, and other obligations
of like nature arising in the ordinary course of business.
16.5.4. Security Interests imposed by any Law, such as
mechanics', workmen's, materialmen's, landlords', carriers', or other
like Security Interests arising in the ordinary course of business
which secure payment of obligations which are not past due or which are
being diligently contested in good faith by appropriate proceedings and
for which adequate reserves in accordance with GAAP are maintained on
Borrower's books.
16.5.5. Purchase money Security Interests securing payment of
the purchase price of capital assets acquired by Borrower after the
Execution Date in an amount not to exceed $3,000,000 in the aggregate
during any fiscal year of Borrower and $10,000,000 in the aggregate,
but only to the extent the aggregate purchase price thereof would not
(when aggregated with other Capital Expenditures of Borrower in the
same period) exceed the limits for Capital Expenditures prescribed in
Section 17.2.
16.5.6. Security Interests of customers of Borrower in items
of Inventory for the manufacture of which such customers have paid
deposits to Borrower, to the extent such Security Interests secure the
repayment of such deposits.
16.5.7. Security Interests securing the Loan Obligations in
favor of Administrative Agent for the benefit of Lenders.
16.5.8. Security Interests existing on the Execution Date
that are disclosed in section 13.30 of the Disclosure Schedule and are
satisfactory to Lenders.
16.6. Acquisitions. Acquire stock or other equity interest
in a Person or acquire all or a material part of the assets of a
Person, regardless of the form of the transaction, other than in
Permitted Acquisitions.
16.7. Bailments; Consignments; Warehousing. Store any
Inventory in excess of $250,000 in the aggregate with a bailee,
warehouseman, consignee or pursuant to an express or implied agreement
establishing a bailment or consignment of Inventory or similar
arrangement, unless Administrative Agent has received a written
acknowledgment satisfactory to Administrative Agent from the third
party involved which acknowledges the prior perfected Security Interest
of Administrative Agent for the benefit of Lenders in such Inventory.
16.8. Disposal of Property. Sell, transfer, exchange,
lease, or otherwise dispose of any of its assets, including, without
limitation, the shares of stock of DTUK not pledged to Administrative
Agent to secure the Loan Obligations, except (i) sales of Inventory in
the ordinary course of business and (ii) sales of capital assets
approved by Administrative Agent if the net proceeds thereof are used
as required or permitted by Section 6.4.4.1. Notwithstanding the
foregoing, Borrower may sell, transfer or otherwise dispose of obsolete
or unusable equipment having an orderly liquidation value no greater
than $50,000 individually, and $100,000 in the aggregate in any fiscal
year of Borrower, provided that (a) if such sale, transfer or
disposition is effected without replacement of such equipment, or if
such equipment is replaced by equipment leased by Borrower or by
equipment purchased by Borrower subject to a Permitted Security
Interest, then Borrower shall deliver all of the cash proceeds of any
such sale, transfer or other disposition to Administrative Agent for
application to the Loan Obligations as required by Section 6.4.4.1 or
(b) if such sale, transfer or other disposition is made in connection
with the purchase by Borrower of replacement equipment (other than
equipment subject to a Security Interest), then Borrower shall use the
proceeds of
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<PAGE>
any such sale, transfer or other disposition to finance the purchase
by Borrower of such replacement equipment and shall deliver to Admin-
istrative Agent written evidence of the use of the proceeds for such
purchase. All replacement equipment purchased by Borrower shall be free
and clear of all Security Interests and Encumbrances, except for
Permitted Security Interests.
16.9. Distributions. At any time when there is an Existing
Default, directly or indirectly declare or make, or incur any liability
to make, any Distribution. For purposes of this Section, a
"Distribution" means and includes (i) any cash dividend, (ii) any
acquisition or redemption of any outstanding stock, (iii) any
retirement or prepayment of debt securities before their regularly
scheduled maturity dates, and (iv) any loan or advance to a shareholder.
16.10. Change of Control. Merge or consolidate with or into
another Person, or permit any Person or Group to become the record or
beneficial owner, directly or indirectly, of securities representing
30% or more of the voting power of DTI's then outstanding securities
having the power to vote, or acquiring the power to elect a majority of
the Board of Directors of DTI.
16.11. Capital Structure; Equity Securities. Make any
change in its capital structure which has or could have a Material
Adverse Effect; or create any new class of stock, issue any stock, or
issue any other equity securities, or non-equity securities that are
convertible into equity securities, except common stock and other
securities that are subordinated in right of payment to all the Loan
Obligations in a manner satisfactory to Required Lenders.
16.12. Change of Business. Engage in any business other
than substantially as conducted on the Effective Date.
16.13. Transactions With Affiliates. Enter into or be a
party to any transaction or arrangement, including the purchase, sale
or exchange of property of any kind or the rendering of any service,
with any Affiliate, or make any loans or advances to any Affiliate. If
there is no Existing Default, however, Borrower may engage in the such
transactions in the ordinary course of business and pursuant to the
reasonable requirements of its business and on fair and reasonable
terms substantially as favorable to it as those which it could obtain
in a comparable arm's-length transaction with a non-Affiliate.
16.14. No Default on Indebtedness or Material Agreements.
Default upon or fail to pay any Indebtedness for money borrowed in
excess of $500,000 as the same matures, or breach, violate, or be in
default under any Material Agreement.
16.15. Conflicting Agreements. Enter into any agreement,
that would, if fully complied with by it, result in a Default or Event
of Default either immediately or upon the elapsing of time.
16.16. Bank Accounts. Maintain any deposit accounts at
institutions other than Administrative Agent except (i) zero or pegged
balance payroll accounts and petty cash accounts as described in
section 16.16 of the Disclosure Schedule and (ii) other zero or pegged
balance payroll accounts and petty cash accounts of which Borrower has
notified Administrative Agent in writing and which have an aggregate
balance not exceeding $2,000,000.
16.17. Sale and Leaseback Transactions. Enter into any
agreement or arrangement with any Person providing for Borrower to
lease or rent property that Borrower has or will sell or otherwise
transfer to such Person.
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<PAGE>
16.18. New Subsidiaries. Organize, create or acquire any
Subsidiary, except as part of a Permitted Acquisition.
16.19. Fiscal Year. Change its fiscal year.
16.20. Transactions Having a Material Adverse Effect. Enter
into any transaction which has or is reasonably likely to have a
Material Adverse Effect.
16.21. Mid-West Bank Accounts. Until the General
Acquisition Loan, and all accrued and unpaid interest thereon, is fully
and irrevocably paid pursuant to Section 6.3.3, make disbursements
(other than in payment of the Loan Obligations) of cash of Mid-West
Enterprises or Mid-West Systems or marketable securities of Mid-West
Enterprises or Mid-West Systems converted to cash which would, when
aggregated with all prior disbursements, result in the aggregate all
such disbursements from such sources exceeding $10,000,000. Any
transfer of a marketable security shall be deemed to be a disbursement
of cash in the amount of the market value of such marketable security
at the time of such transfer.
17. Financial Covenants.
17.1. Special Definitions. As used in this Section 17 and
elsewhere in this Agreement, the following capitalized terms have the
following meanings:
"Adjusted Operating Cash Flow" means, with respect to
Borrower, the Operating Cash Flow of Borrower for any period
of determination, calculated by including the Operating Cash
Flow for such period of every Surviving Company in consummated
Permitted Acquisitions as if such Permitted Acquisition had
occurred as of the first day of such period.
"Capital Expenditure": an expenditure for an asset that must
be depreciated or amortized under GAAP, or for any asset that
under GAAP must be treated as a capital asset, including but
not limited to, with respect to every Capital Lease, the
amount which under GAAP must be recorded as an amortizable
asset.
"Capitalization" means, as of any date with respect to
Borrower, the sum of (a) all Borrower's Indebtedness plus (b)
eight times the total rental payments under all Operating
Leases of Borrower for the most recently ended four fiscal
quarters of Borrower, plus (c) Borrower's Net Worth.
"Current Assets" means current assets as determined in
accordance with GAAP.
"Current Liabilities" means current liabilities as determined
in accordance with GAAP, excluding amounts outstanding under
the Aggregate Revolving Loan.
"Interest Expense" means, for any period of calculation, all
interest, whether paid in cash or accrued as a liability, but
without duplication, on Indebtedness of Borrower during such
period.
"Fixed Charges" means, for any period of calculation, the sum
of (i) interest paid, (ii) the sum of all scheduled principal
payments on any Indebtedness of Borrower (including the
Aggregate Term Loan, the Aggregate Canadian Term Loan, the
Aggregate Post-Offering Acquisition Loan and the Aggregate
General Acquisition Loan), (iii) federal, state and local
income taxes paid, (iv) Capital Expenditures (excluding
permitted expenditures for acquisitions) incurred during the
calculation period ending on such date (provided, however,
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<PAGE>
that only the amount of all payments actually made in
connection with all such Capital Leases during the applicable
calculation period shall be accounted for in calculating
Capital Expenditures for the purposes of calculating Fixed
Charges), and (v) Dividends.
"Net Worth" means, as of any date, Total Assets minus Total
Liabilities.
"Operating Cash Flow" means, for any period of calculation, an
amount equal to the sum of (i) Net Income, (ii) federal, state
and local income tax expense, (iii) interest expense, (iv)
depreciation and amortization expense, (v) losses on the sale
or other disposition of assets, and (vi) extraordinary losses,
minus (a) gains on the sale or other disposition of assets,
and (b) extraordinary gains, all calculated for such period.
"Total Assets" means the sum of all assets as presented in the
balance sheet in Borrower's most recent Financial Statements.
"Total Liabilities" means all liabilities of Borrower as
presented in the balance sheet in Borrower's most recent
Financial Statements.
For purposes of Section 17, (i) the term "Borrower" includes DTUK and
Swiftpack (ii) all "Indebtedness" of Borrower denominated in British
Pounds shall be converted into Dollars at the Base Conversion Rate and
(iii) "Indebtedness" shall not include the Swiftpack Letter of Credit
until it is drawn on. The "Base Conversion Rate" shall be the
conversion rate for British Pounds into Dollars quoted as the late New
York rate in the Midwest Edition of the Wall Street Journal as of the
date of calculation.
All other capitalized terms used in this Section 17 shall have their
meanings and shall be determined under GAAP.
17.2. Capital Expenditures. Borrower shall not make
Capital Expenditures (exclusive of Permitted Acquisitions) in any of
the fiscal periods specified below that in the aggregate exceed the
amount specified for such fiscal period:
<TABLE>
<CAPTION>
Period Maximum Capital Expenditures
<C> <C>
Effective Date through 6/30/96 $12,000,000
7/1/96 through 6/30/97 $11,500,000
Each fiscal year thereafter $12,500,000
</TABLE>
17.3. Capital Leases. Become obligated as lessee under any
Capital Leases except Capital Leases existing on the Execution Date and
disclosed in section 13.23 of the Disclosure Schedule and Capital Leases
entered into by Borrower after the Execution Date for capital assets
whose aggregate cost if purchased would not exceed $4,000,000 in any
fiscal year and $15,000,000 in the aggregate.
17.4. Operating Lease Obligations. Become obligated as
lessee under any Operating Lease except Operating Leases existing on
the Execution Date and disclosed in section 13.22 of the Disclosure
Schedule and Operating Leases entered into by Borrower after the
Execution Date if, after giving effect thereto, the aggregate amount
of all rentals payable by Borrower in respect of all Operating Leases
does not exceed $5,500,000 in any fiscal year of Borrower. For purposes
hereof, the term "rentals" means all payments due from the lessee or
sublessee under an Operating Lease, including, without limitation, basic
rent, percentage rent, property taxes, utility or maintenance costs and
insurance premiums.
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<PAGE>
17.5. Minimum Adjusted Operating Cash Flow. Borrower's
Adjusted Operating Cash Flow for each fiscal period specified below,
calculated at the end of each fiscal quarter of Borrower on the basis
of the four consecutive fiscal quarters then ended, shall not be less
than the amount set forth opposite such period:
<TABLE>
<CAPTION>
Period Minimum Operating Cash Flow
<C> <C>
Execution Date through 12/31/96 $49,000,000
1/1/97 through 6/30/97 $51,000,000
7/1/97 through 6/30/98 $52,500,000
7/1/98 through 6/30/99 $57,500,000
Thereafter $61,000,000
</TABLE>
17.6. Minimum Interest Coverage. The ratio of Borrower's
Adjusted Operating Cash Flow to Interest Expense for each fiscal period
specified below, calculated at the end of each fiscal quarter of
Borrower on the basis of the four consecutive fiscal quarters then
ended, shall not be less than the ratio set forth opposite such period:
<TABLE>
<CAPTION>
Period Ratio of Adjusted Operating Cash Flow
to Interest Expense
<C> <C>
Execution Date through 6/30/97 4.00 to 1.00
7/1/97 through 12/31/97 4.20 to 1.00
1/1/98 through 6/30/98 4.80 to 1.00
Thereafter 5.60 to 1.00
</TABLE>
17.7. Minimum Fixed Charge Coverage. The ratio of
Borrower's Adjusted Operating Cash Flow to Fixed Charges, calculated at
the end of each fiscal quarter of Borrower on the basis of the four
consecutive fiscal quarters then ended, shall not be less than 1.00 to
1.00.
17.8. Indebtedness to Adjusted Operating Cash Flow. The
ratio of Borrower's Indebtedness to Adjusted Operating Cash Flow for
each fiscal period specified below, calculated at the end of each
fiscal quarter of Borrower on the basis of the four consecutive fiscal
quarters then ended, shall not be greater than the ratio set forth
opposite such period:
<TABLE>
<CAPTION>
Period Ratio of Indebtedness to Adjusted
Operating Cash Flow
<C> <C>
Execution Date through 6/30/97 3.00 to 1.00
7/1/97 through 12/31/97 2.90 to 1.00
1/1/98 through 6/30/98 2.70 to 1.00
thereafter 2.20 to 1.00
</TABLE>
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17.9. Minimum Net Worth. Borrower's Net Worth shall at no
time during any fiscal period specified in the table below be less than
the amount specified for such period:
<TABLE>
<CAPTION>
Period Minimum Net Worth
<C> <C>
Effective Date through 12/31/96 $85,000,000
1/1/97 through 6/30/97 $92,000,000
7/1/97 through 6/30/98 $98,000,000
7/1/98 through 6/30/99 $115,000,000
thereafter $130,000,000
</TABLE>
17.10. Minimum Current Ratio. The ratio of Borrower's
Current Assets to Current Liabilities shall at no time be less than
1.00 to 1.00
17.11. Indebtedness Plus Eight Times Operating Lease
Payments to Capitalization. The ratio of Borrower's Indebtedness plus
eight times total rental payments under all Operating Leases for the
most recent four fiscal quarters then ended to Capitalization for each
fiscal period specified below, calculated as of the last day of each
fiscal quarter of Borrower, shall not be greater than the ratio set
forth opposite such period:
<TABLE>
<CAPTION>
Period Ratio of Indebtedness Plus Eight
Times Operating Lease Payments to
Capitalization
<C> <C>
Execution Date through 6/30/97 0.73 to 1.00
7/1/97 through 6/30/98 0.68 to 1.00
thereafter 0.60 to 1.00
</TABLE>
18. Default.
18.1. Events of Default. Any one or more of the following
shall constitute an event of default (an "Event of Default") under this
Agreement:
18.1.1. Failure to Pay Principal or Interest. Failure of
Borrower to pay any principal of the Loans or interest accrued thereon
when due.
18.1.2. Failure to Pay Other Amounts Owed to Lenders.
Failure of Borrower to pay any of the Loan Obligations (other than
principal of the Loans or interest accrued thereon) within 5 days after
notice from Administrative Agent that the same is due. Borrower shall
notify Lenders of any such default or event of default immediately upon
the occurrence thereof.
18.1.3. Failure to Pay Amounts Owed to Other Persons.
Failure of any Covered Person to make any payment due on Indebtedness
of such Covered Person over $250,000 to Persons other than Lenders
which continues unwaived beyond any applicable grace period specified
in the documents evidencing such Indebtedness; provided however, that
no Event of Default will occur if such default or breach is being
diligently contested in good
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faith by appropriate proceedings and Borrower has established adequate
reserves in conformity with GAAP. Borrower shall notify Lenders of any
such default or breach immediately upon the occurrence thereof.
18.1.4. Representations or Warranties. Any representation or
warranty made by Borrower in this Agreement, or any statement or
representation made in any certificate, report, opinion or other
document delivered pursuant to this Agreement, is discovered to have
been false in any material respect when made.
18.1.5. Certain Covenants. Failure of any Covered Person to
comply with the covenants in Sections 15.1, 15.9, 15.14, 15.20, 15.23,
15.24, 16, and 17.
18.1.6. Other Covenants. Failure of any Covered Person to
comply with any of the terms or provisions of any of the Loan Documents
applicable to it (other than a failure which constitutes an Event of
Default under any of Sections 18.1.1 through 18.1.5) which is not
remedied or waived in writing by Required Lenders within 30 days after
notice thereof from Required Lenders to such Covered Person.
18.1.7. Acceleration of Other Indebtedness. Any Obligation
of a Covered Person (other than the Loan Obligations) for the payment
of borrowed money in an amount over $250,000 becomes or is declared to
be due and payable or required to be prepaid (other than by a regularly
scheduled prepayment) prior to the original maturity thereof as a
consequence of a default with respect thereto by any Covered Person;
provided however, that no Event of Default will occur if such default
or breach is being diligently contested in good faith by appropriate
proceedings and Borrower has established adequate reserves in
conformity with GAAP. Borrower shall notify Lenders of the
acceleration of any such Obligation immediately upon receipt of notice
thereof.
18.1.8. Default Under Other Agreements. The occurrence of
any default or event of default under any agreement, including, without
limitation, the Dresdner UK Loan Documents, to which a Covered Person
is a party (other than the Loan Documents), which default or breach
continues unwaived beyond any applicable grace period provided therein
and either (i) involves an agreement providing for Indebtedness in an
amount in excess of $500,000 (provided however, that no Event of
Default will occur under this clause (i) if such default or breach is
being diligently contested in good faith by appropriate proceedings and
Borrower has established adequate reserves in conformity with GAAP) or
(ii) would or is reasonably likely to have a Material Adverse Effect on
such Covered Person. Borrower shall notify Lenders of any such Default
or Event of Default immediately upon the occurrence thereof.
18.1.9. Bankruptcy; Insolvency; Etc. A Covered Person (i)
fails to pay, or admits in writing its inability to pay, its debts
generally as they become due, or otherwise becomes insolvent (however
evidenced); (ii) makes a general assignment for the benefit of
creditors; (iii) files a petition in bankruptcy, is adjudicated
insolvent or bankrupt, petitions or applies to any tribunal for any
receiver or any trustee of such Covered Person or any substantial part
of its property; (iv) commences any proceeding relating to such Covered
Person under any reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect; (v) has commenced against it any such
proceeding which remains undismissed for a period of ninety (90) days,
or by any act indicates its consent to, approval of, or acquiescence in
any such proceeding or the appointment of any receiver of or any
trustee for it or of any substantial part of its
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property, or allows any such receivership or trusteeship to continue
undischarged for a period of ninety (90) days; or (vi) takes any
corporate action to authorize any of the foregoing.
18.1.10. Judgments; Attachment; Etc. Any one or more
judgments or orders is entered against a Covered Person or any
attachment or other levy is made against the property of a Covered
Person with respect to a claim or claims involving in the aggregate
liabilities (not paid or fully covered by insurance, less the amount of
reasonable deductibles in effect on the Execution Date) in excess of
$1,000,000, becomes final and non-appealable or if timely appealed is
not fully bonded and collection thereof stayed pending the appeal.
18.1.11. Pension Benefit Plan Termination, Etc. Any Pension
Benefit Plan termination by the PBGC or the appointment by the
appropriate United States District Court of a trustee to administer any
Pension Benefit Plan or to liquidate any Pension Benefit Plan; or any
event which constitutes grounds either for the termination of any
Pension Benefit Plan by PBGC or for the appointment by the appropriate
United States District Court of a trustee to administer or liquidate
any Pension Benefit Plan shall have occurred and be continuing for
thirty (30) days after Borrower has notice of any such event; or any
voluntary termination of any Pension Benefit Plan which is a defined
benefit pension plan as defined in Section 3(35) of ERISA while such
defined benefit pension plan has an accumulated funding deficiency,
unless Administrative Agent has been notified of such intent to
voluntarily terminate such plan and Lenders have given their consent
and agreed that such event shall not constitute a Default; or the plan
administrator of any Pension Benefit Plan applies under Section 412(d)
of the Code for a waiver of the minimum funding standards of Section
412(1) of the Code and Lenders determine that the substantial business
hardship upon which the application for such waiver is based could
subject any Covered Person or ERISA Affiliate to a liability in excess
of $25,000.
18.1.12. Liquidation or Dissolution. A Covered Person files
a certificate of dissolution under applicable state law or is
liquidated or dissolved or suspends or terminates the operation of its
business, or has commenced against it any action or proceeding for its
liquidation or dissolution or the winding up of its business, or takes
any corporate action in furtherance thereof, other than in connection
with the consolidation of Covered Persons and the assets of such
Covered Person with and into another Covered Person.
18.1.13. Seizure of Assets. All or any part of the property
of Borrower is nationalized, expropriated, seized or otherwise
appropriated, or custody or control of such property or of Borrower
shall be assumed by any Governmental Authority or any court of
competent jurisdiction at the instance of any Governmental Authority,
unless the same is being contested in good faith by proper proceedings
diligently pursued and a stay of enforcement is in effect.
18.1.14. Racketeering Proceeding. There is filed against
Borrower any civil or criminal action, suit or proceeding under any
federal or state racketeering statute (including, without limitation,
the Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit or proceeding is not dismissed within 120 days and could
result in the confiscation or forfeiture of any material portion of the
Collateral.
18.1.15. Loan Documents; Security Interests. For any reason
other than the failure of Administrative Agent to take any action
available to it to maintain perfection of the Security Interests
created in favor of Administrative Agent for the benefit of Lenders
pursuant to the Loan Documents, any Loan Document ceases to be in full
force and effect or
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any Security Interest with respect to any portion of the Collateral
intended to be secured thereby ceases to be, or is not, valid, perfected
and prior to all other Security Interests (other than the Permitted
Security Interests) or is terminated, revoked or declared void or
invalid.
18.1.16. Loss to Collateral. Any loss, theft, damage or
destruction of any item or items of Collateral occurs which either (i)
has a Material Adverse Effect or (ii) materially and adversely affects
the operation of Borrower's business and is not covered by insurance as
required herein.
18.1.17. Material Adverse Change. There occurs any material
adverse change in Borrower's property, business, operation, or
condition (financial or otherwise), or there occurs any event which has
or is reasonably likely to have a Material Adverse Effect.
18.2. Cross-Default. Any Event of Default under this
Agreement will constitute an event of default under any other agreement
of Borrower with Lender and under any evidence of Indebtedness of
Borrower held by Lender, whether or not such is an event of default
specified therein.
18.3. Rights and Remedies in the Event of Default.
18.3.1. Termination of Commitments. Upon an Event of Default
described in Section 18.1.9, the Commitments shall be deemed canceled
without presentment, demand or notice of any kind. Upon any other
Event of Default, and at any time thereafter, Required Lenders may
cancel the Commitments. Such cancellation may be without demand or
notice of any kind, which Borrower expressly waives.
18.3.2. Acceleration. Upon an Event of Default described in
Section 18.1.9, all of the outstanding Loan Obligations shall
automatically become immediately due and payable. Upon any other Event
of Default, and at any time thereafter, Required Lenders may declare
all of the outstanding Loan Obligations immediately due and payable.
Such acceleration in either case may be without presentment, demand or
notice of any kind, which Borrower expressly waives.
18.3.3. Right of Set-off. Upon the occurrence of any Event
of Default and at any time and from time to time thereafter, each
Lender is hereby authorized, without notice to Borrower (any such
notice being expressly waived by Borrower), to set off and apply
against the Loan Obligations any and all deposits (general or special,
time or demand, provisional or final) at any time held, or any other
Indebtedness at any time owing by such Lender to or for the credit or
the account of Borrower, irrespective of whether or not such Lender
shall have made any demand under this Agreement or the Notes and
although such Loan Obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which such
Lender may otherwise have.
18.3.4. Notice to Account Debtors. Upon the occurrence of
any Event of Default and at any time and from time to time thereafter,
Administrative Agent may (if Required Lenders concur), without prior
notice to Borrower, notify any or all Account Debtors that the Accounts
have been assigned to Administrative Agent for the benefit of Lenders
and that Administrative Agent has a Security Interest therein for the
benefit of Lenders, and Administrative Agent may direct, or Borrower,
at Administrative Agent's request, shall direct, any or all Account
Debtors to make all payments upon the Accounts directly to
Administrative Agent for the benefit of Lenders.
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18.3.5. Entry Upon Premises and Access to Information. Upon
an Event of Default and acceleration of the Loan Obligations as
provided herein, and at any time thereafter: Administrative Agent may
(i) enter upon the premises leased or owned by Borrower where
Collateral is located (or is believed to be located) without any
obligation to pay rent to Borrower, or any other place or places where
Collateral is believed to be located, (ii) render Collateral usable or
saleable, (iii) remove Collateral therefrom to the premises of
Administrative Agent or any agent of Administrative Agent for such time
as Administrative Agent may desire in order effectively to collect or
liquidate Collateral; (iv) take possession of, and make copies and
abstracts of, Borrower's original books and records, obtain access to
Borrower's data processing equipment, computer hardware and software
relating to any of the Collateral and, subject to any proprietary
rights of third parties, use all of the foregoing and the information
contained therein in any manner Administrative Agent deems appropriate
in connection with the exercise of Administrative Agent's rights; and
(v) notify postal authorities to change the address for delivery of
Borrower's mail to an address designated by Administrative Agent and to
receive, open and process all mail addressed to Borrower.
18.3.6. Completion of Uncompleted Inventory Items.
Administrative Agent may request that Borrower, and Borrower shall upon
such request, use Borrower's best efforts to obtain the consent of its
customers to the completion (before or after foreclosure by
Administrative Agent of its security interest therein) of the
manufacture of all uncompleted Inventory items that Borrower was
manufacturing for such customers pursuant to contracts or accepted
purchase orders, and the commitment by such customers to purchase such
items upon their completion as provided in the relevant contracts or
accepted purchase orders. Borrower shall, as an uncompensated agent
for Lenders, complete the manufacture and shipment of all such items as
provided in the relevant contracts or accepted purchase orders if
Administrative Agent so directs.
18.3.7. Borrower's Obligations. Upon the occurrence of an
Event of Default, Borrower shall, if Administrative Agent so requests,
assemble all the movable tangible Collateral and make it available to
Administrative Agent at a place or places to be designated by
Administrative Agent in its discretion.
18.3.8. Secured Party Rights. Upon an Event of Default and
acceleration of the Loan Obligations as provided herein, and at any
time and from time to time thereafter:
18.3.8.1. Administrative Agent may exercise any or all of its
rights under the Security Documents as a secured party under the UCC and
any other applicable Law; and
18.3.8.2. Administrative Agent may sell or otherwise dispose
of any or all of the Collateral at public or private sale in a
commercially reasonable manner, which sale Administrative Agent may
postpone from time to time by announcement at the time and place of
sale stated in the notice of sale or by announcement at any adjourned
sale without being required to give a new notice of sale, all as
Administrative Agent deems advisable, for cash or credit. A Lender may
become the purchaser at any such sale if permissible under applicable
Law, and such Lender may, in lieu of actual payment of the purchase
price, offset the amount thereof against Borrower's obligations owing
to Lender, and Borrower agrees that such Lender has no obligation to
preserve rights to Collateral against prior parties or to marshal any
Collateral for the benefit of any Person.
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In connection with the advertising for sale, selling, or otherwise
realizing upon any of the Collateral securing the obligations of
Borrower to Lender, Administrative Agent may use and is hereby granted
a license to use, without charge or liability to Administrative Agent
or Lenders therefor, any of Borrower's labels, trade names, trademarks,
trade secrets, service marks, patents, patent applications, licenses,
certificates of authority, advertising materials, or any of Borrower's
other properties or interests in properties of similar nature, to the
extent that such use thereof is not prohibited by agreements under which
Borrower has rights therein, and all of Borrower's rights under license,
franchise and similar agreements shall inure to Lenders' benefit.
18.3.9. Miscellaneous. Upon the occurrence of an Event of
Default and at any time thereafter, Lenders may exercise any other
rights and remedies available to Lenders under the Loan Documents or
otherwise available to Lenders at law or in equity.
18.3.10. Application of Funds. After payment of any amounts
due to Dresdner UK required by the Subrogation Agreement, any funds
received by Lenders or Administrative Agent for the benefit of Lenders
with respect to the Loan Obligations after any acceleration, including
proceeds of Collateral, shall be applied as follows: (i) first, to
reimburse Lenders prorata for any amounts due to Lenders under Section
20.6; (ii) second, to reimburse to Administrative Agent all unreimbursed
costs and expenses paid or incurred by Administrative Agent that are
payable or reimbursable by Borrower hereunder; (iii) third, to
reimburse to Co-Arrangers prorata all unreimbursed costs and expenses
paid or incurred by Co-Arrangers that are payable or reimbursable by
Borrower hereunder; (iv) fourth, to reimburse to Lenders prorata all
unreimbursed costs and expenses paid or incurred by Lenders (including
costs and expenses incurred by Administrative Agent as a Lender that
are not reimbursable as provided in the preceding clause) that are
payable or reimbursable by Borrower hereunder; (v) fifth, to the
payment of accrued and unpaid fees due hereunder and all other amounts
due hereunder (other than the Loans and interest accrued thereon);
(vi) sixth, to the payment of interest accrued on the Loans prorata to
each of the Lenders; (vii) seventh, to the payment of the Loans of each
of the Lenders, in such order as each Lender determines in its absolute
discretion; and (viii) eighth, to the payment of the other Loan
Obligations. Any remaining amounts shall be paid to Borrower or such
other Persons as shall be legally entitled thereto.
18.4. Limitation of Liability; Waiver. Administrative
Agent and Lenders shall not be liable to Borrower as a result of any
commercially reasonable possession, repossession, collection or sale by
Administrative Agent of Collateral; and Borrower hereby waives all
rights of redemption from any such sale and the benefit of all
valuation, appraisal and exemption laws. If Administrative Agent seeks
to take possession of any of the Collateral by replevin or other court
process after an Event of Default, Borrower hereby irrevocably waives
(i) the posting of any bonds, surety and security relating thereto
required by any statute, court rule or otherwise as an incident to such
possession, (ii) any demand for possession of the Collateral prior to
the commencement of any suit or action to recover possession thereof,
(iii) any requirement that Administrative Agent retain possession and
not dispose of any Collateral until after trial or final judgment, and
(iv) to the extent permitted by applicable law, all rights to notice
and hearing prior to the exercise by Administrative Agent of
Administrative Agent's right to repossess the Collateral without
judicial process or to replevy, attach or levy upon the Collateral
without notice or hearing. Administrative Agent shall have no
obligation to preserve rights to the Collateral or to marshall any
Collateral for the benefit of any Person.
18.5. Notice. Any notice of intended action required to be
given by Administrative Agent (including notice of a public or private
sale of Collateral), if given as provided in Section 21.1 at
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least 10 days prior to such proposed action, shall be effective and
constitute reasonable and fair notice to Borrower.
19. Administrative Agent and Lenders.
19.1. Appointment of Administrative Agent. Boatmen's is
hereby appointed Administrative Agent hereunder and under each of the
other Loan Documents. Each Lender irrevocably authorizes Boatmen's to
act as the Administrative Agent and for such Lender. Administrative
Agent shall not have any duties or responsibilities except those
expressly stated in the Loan Documents, nor any fiduciary relationship
with any Lender, and no implied covenants, functions, duties,
responsibilities, obligations or liabilities shall be read into the
Loan Documents or otherwise exist against Administrative Agent by
reason of this Agreement.
19.2. Powers. Administrative Agent shall have and may
exercise such powers hereunder as are specifically delegated to
Administrative Agent by the terms hereof, together with such powers as
are reasonably incidental thereto. Administrative Agent shall have no
implied duties to Lenders, or any obligation to Lenders to take any
action hereunder except action specifically provided by this Agreement
to be taken by Administrative Agent.
19.3. General Immunity of Administrative Agent. Neither
Administrative Agent nor any of its directors, officers, agents, or
employees shall be liable to any Lender for any act or failure to act
with respect to their respective duties hereunder that does not
constitute gross negligence or willful misconduct.
19.4. No Responsibility for Loans, Recitals, Etc.
Administrative Agent and its directors, officers, agents, and employees
shall not be responsible to Lenders for any recitals, reports,
statements, warranties or representations herein or in any Loan
Document or be bound to ascertain or inquire as to the performance or
observance of any of the terms of this Agreement.
19.5. Action on Instructions of Required Lenders.
Administrative Agent and its directors, officers, agents, and employees
shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with written instructions executed by
Required Lenders, and such instructions and any act or failure to act
pursuant thereto shall be binding on all of Lenders and on all holders
of Notes.
19.6. Employment of Agents and Counsel. Administrative
Agent may execute any of its duties hereunder by or through employees,
agents, and attorneys-in-fact and shall not be answerable to Lenders,
except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Administrative
Agent shall be entitled to advice of counsel concerning all matters
pertaining to the agency hereby created and its duties hereunder.
19.7. Reliance on Documents; Counsel. Administrative Agent
shall be entitled to rely upon any notice, consent, certificate,
affidavit, letter, telegram, statement, paper or document believed by
it to be genuine and correct and to have been signed or sent by the
proper person or persons, and, in respect to legal matters, upon the
opinion of counsel selected by it, which counsel may be its employees.
19.8. Administrative Agent's Reimbursement and
Indemnification. Lenders agree to reimburse and indemnify
Administrative Agent prorata according to their respective Commitments
(i) for any amounts not reimbursed by Borrower for which Administrative
Agent is entitled to reimbursement by Borrower under the Loan Documents
(other than any Administrative Agent's fee payable by Borrower
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to Administrative Agent and fees incurred by Administrative Agent for
its legal counsel and expenses advanced by Administrative Agent's legal
counsel in connection with the preparation and negotiation of the Loan
Documents and the closing of the transactions contemplated hereby),
(ii) for any other expenses incurred by Administrative Agent on behalf
of Lenders, in connection with the enforcement of the Loan Documents,
and (iii) for any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
and nature whatsoever which may be imposed on, incurred by or asserted
against Administrative Agent in any way relating to or arising out of
this Agreement or any other document delivered in connection with this
Agreement or the transactions contemplated hereby or the enforcement of
any of the terms hereof or of any such other documents; provided,
however, that no Lender shall be liable for any of the foregoing to the
extent arising from any act or failure to act of Administrative Agent
that constitutes gross negligence or willful misconduct with respect to
its duties as Administrative Agent.
19.9. Rights as a Lender. With respect to its Commitments,
Advances made by it and the Notes issued to it, Administrative Agent
shall have the same rights and powers hereunder as any Lender and may
exercise the same as though it were not Administrative Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise
indicates, include Administrative Agent in its individual capacity as a
lender hereunder. Administrative Agent may accept deposits from, lend
money to, and generally engage in any kind of banking or trust business
with Borrower or any Subsidiary or Affiliate of Borrower as if it were
not Administrative Agent.
19.10. Independent Credit Decisions. Each Lender
acknowledges that it has, independently and without reliance upon
Administrative Agent or any other Lender and based on the initial
financial statements prepared by Borrower and such other documents and
information as it has deemed appropriate, made its own credit analysis
and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently
and without reliance upon Administrative Agent or any other Lender and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Agreement and the other Loan documents.
19.11. Successor Administrative Agent. Administrative Agent
may resign at any time by giving written notice thereof to Lenders and
Borrower. Upon receipt of such notice of resignation, Required Lenders
may, after consultation with Borrower, and subject to the requirements
in this Section, appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by Required
Lenders and shall have accepted such appointment within thirty days
after the retiring Administrative Agent's giving notice of resignation,
then the retiring Administrative Agent may appoint, on behalf of
Borrower and Lenders, a successor Administrative Agent. Such successor
Administrative Agent shall be a commercial bank having capital and
retained earnings of at least $250,000,000. Administrative Agent's
resignation shall not be effective until a successor Administrative
Agent has been appointed and accepts such appointment. Upon a
successor Administrative Agent's acceptance of its appointment, such
successor Administrative Agent shall succeed to and become vested with
all the rights, powers, privileges and duties of the resigning
Administrative Agent as such, and the resigning Administrative Agent
shall be discharged from its duties and obligations as Administrative
Agent hereunder. After the resignation of Administrative Agent, the
provision of this Section 19 shall continue in effect for the resigning
Administrative Agent's benefit in respect of any act or failure to act
while it was Administrative Agent hereunder.
19.12. Notification of Lenders. Each Lender agrees to use
its good faith efforts, upon becoming aware of anything which would
likely have a Material Adverse Effect, to promptly notify Co-Arrangers
thereof. Administrative Agent shall promptly deliver to each Lender
copies of every written notice, demand, report (including any financial
report), or other writing which Administrative Agent gives
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to or
receives from Borrower and which itself (a) constitutes, or which
contains information about, something that would likely have a Material
Adverse Effect with respect to Borrower's Loan Obligations to such
Lender or (b) is otherwise delivered to Administrative Agent by
Borrower pursuant to the Loan Documents and is deemed material
information by Administrative Agent in its sole discretion.
Administrative Agent and its directors, officers, agents, and employees
shall have no liability to any Lender for failure to deliver any such
item to such Lender unless the failure constitutes gross negligence or
willful misconduct.
19.13. No Knowledge of Default. Administrative Agent shall
not be deemed to have knowledge of any Default or Event of Default
unless Administrative Agent has received written notice thereof from a
Lender or Borrower referring to this Agreement and describing such
Default or Event of Default, or Administrative Agent otherwise has
actual knowledge thereof. If Administrative Agent receives such notice
or otherwise acquires such actual knowledge, Administrative Agent shall
notify Lenders of the same, solicit advice from Lenders as to the
appropriate course of action, and take such action (including but not
limited to actions contemplated by Sections 9 and 18.3) as is directed
by Required Lenders; provided, however, that unless and until
Administrative Agent has received such directions, Administrative Agent
may at its option take such actions as it deems appropriate without the
direction of Required Lenders in circumstances where the ability of
Lenders to recover the Loan Obligations may otherwise be materially
impaired.
19.14. Collections and Distributions to Lenders by
Administrative Agent. All interest, fees, and payments of principal
received by Administrative Agent for the account of Lenders shall be
distributed by Administrative Agent to Lenders in accordance with their
prorata shares of the outstanding Loan Obligations at the time of such
distribution (or entirely to Boatmen's in the case of interest, fees,
and payments with respect to the Swingline Loan) on the same Business
Day when received, unless received after 2:00 p.m., St. Louis time, in
which case they shall be so distributed on the next Business Day. All
amounts received by any Lender on account of the Loan Obligations,
including amounts received by way of setoff, shall be paid promptly to
Administrative Agent for distribution to Lenders in accordance with
their prorata shares of the Loans. Such distributions shall be made
according to instructions that each Lender may give to Administrative
Agent from time to time.
20. General.
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20.1. Lenders' Right to Cure. Lenders may from time to
time, in their absolute discretion, for Borrower's account and at
Borrower's expense, pay (or, with the consent of Required Lenders, make
a Revolving Advance to pay) any amount or do any act required of
Borrower hereunder or requested by Administrative Agent or Required
Lenders to preserve, protect, maintain or enforce the Loan Obligations,
the Collateral or Administrative Agent's Security Interests therein for
the benefit of Lenders, and which Borrower fails to pay or do,
including payment of any judgment against Borrower, insurance premium,
taxes or assessments, warehouse charge, finishing or processing charge,
landlord's claim, and any other Security Interest upon or with respect
to the Collateral. All payments that Lenders make pursuant to this
Section and all out-of-pocket costs and expenses that Lenders pay or
incur in connection with any action taken by it hereunder shall be a
part of the Loan Obligations, the repayment of which shall be secured
by the Collateral. Any payment made or other action taken by Lenders
pursuant to this Section shall be without prejudice to any right to
assert an Event of Default hereunder and to pursue Lender's other
rights and remedies with respect thereto.
20.2. Rights Not Exclusive. Every right granted to
Administrative Agent and Lenders hereunder or under any other Loan
Document or allowed to it at law or in equity shall be deemed
cumulative and may be exercised from time to time.
20.3. Survival of Agreements. All covenants and agreements
made herein and in the other Loan Documents shall survive the execution
and delivery of this Agreement, the Notes and other Loan Documents, the
making of every Advance and the issuance of every Letter of Credit.
All agreements, obligations and liabilities of Borrower under this
Agreement concerning the payment of money to Administrative Agent and
Lenders, including Borrower's obligations under Sections 20.5 and 20.6,
but excluding the obligation to repay the Loans and interest accrued
thereon, shall survive the repayment in full of the Loans and interest
accrued thereon, the return of the Notes to Borrower, the termination
of the Commitments and the expiration of all Letters of Credit.
20.4. Assignments and Participations.
20.4.1. Permitted Assignments. At any time after the
Execution Date any Lender may assign to one or more banks or financial
institutions all or a portion of its rights and obligations under this
Agreement (including all or a portion of the Notes payable to it),
provided that the terms of assignment satisfy the following
requirements:
20.4.1.1. Administrative Agent shall have accepted the
assignment and Borrower shall have consented to the assignment, which
acceptance and consent shall not be unreasonably withheld.
20.4.1.2. Each such assignment shall be of a constant,
and not a varying, percentage of all of the assigning Lender's
rights and obligations under this Agreement.
20.4.1.3. For each assignment involving the issuance and
transfer of Notes, the assigning Lender shall execute an Assignment and
Acceptance in the form attached hereto as Exhibit 20.4.1.
20.4.1.4. The minimum Commitment which shall be assigned
(which shall include the applicable portion of the assigning Lender's
Revolving Commitment, Term Commitment, Canadian Term Commitment,
Post-Offering Acquisition Loan Commitment, General Acquisition Loan
Commitment and Letter of Credit Commitment, which shall also be
assigned) is $5,000,000 or
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such lesser amount which constitutes such Lender's entire Commitment;
provided, however, that no such minimum shall apply between Lenders
and their Affiliates.
20.4.1.5. The assignee shall have an office located in the
United States.
20.4.2. Consequences and Effect of Assignments.
20.4.2.1. From and after the effective date specified in any
Assignment and Acceptance, the assignee shall be deemed and treated as a
party to this Agreement and, to the extent that rights and obligations
hereunder and under the Notes held by the assignor have been assigned or
negotiated to the assignee pursuant to such Assignment and Acceptance,
to have the rights and obligations of a Lender hereunder as fully as if
such assignee had been named as a Lender in this Agreement and of a
holder of such Notes, and the assignor shall, to the extent that rights
and obligations hereunder or under such Notes have been assigned or
negotiated by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its future obligations under this
Agreement.
20.4.2.2. By executing and delivering an Assignment and
Acceptance, the assignor thereunder and the assignee confirm to and
agree with each other and the other parties hereto as follows: (i) the
assignment made under such Assignment and Acceptance is made under such
Assignment and Acceptance without recourse; (ii) such assignor makes no
representation or warranty and assumes no responsibility with respect
to the financial condition of any Covered Person or the performance or
observance by any Covered Person of any of its Loan Obligations;
(iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements delivered
pursuant to Section 15.14 hereof and such other Loan Documents and
other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without reliance
upon the Administrative Agent, such assignor, or any other Lender, and
based on such documents and information as it deems appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Agreement; (v) such assignee appoints and authorizes
the Administrative Agent to take such action as agent on its behalf and
to exercise such powers under this Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms
hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform
in accordance with their respective terms all of the obligations which
by the terms of this Agreement are required to be performed by such
assignee as a Lender and a holder of a Note.
20.4.3. Assignment Fee. Any Lender who makes an assignment
shall pay to the Administrative Agent a one-time administrative fee of
$3,500, which shall not be reimbursed by Borrower.
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20.4.4. Administrative Agent to Retain Copies of Assignments
and Acceptances. Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to and accepted by it.
20.4.5. Notice to Borrower of Assignment. Upon its receipt
of an Assignment and Acceptance executed by an assigning Lender, if
Administrative Agent accepts the assignment contemplated thereby,
Administrative Agent shall give prompt notice thereof to Borrower. If
Borrower consents to the assignment contemplated thereby, which consent
shall not be unreasonably withheld, Borrower shall execute and deliver
replacement Notes to the assignor and assignee as requested by
Administrative Agent and necessary to give effect to the assignment.
20.4.6. Sale of Participations. Each Lender may sell
participations to one or more banks or other entities as to all or a
portion of its rights and obligations under this Agreement provided
that the terms of sale satisfy the following requirements:
20.4.6.1. Such Lender's obligations under this Agreement
shall remain unchanged.
20.4.6.2. Such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations.
20.4.6.3. Such Lender shall remain the holder of any Notes
issued to it for the purpose of this Agreement.
20.4.6.4. Such participations shall be in a minimum amount of
$5,000,000, except that there shall be no such minimum amount between
Lenders and their Affiliates or between Affiliates of Lenders.
20.4.6.5. Borrower, Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this
Agreement and with regard to Advances and payments to be made under
this Agreement. Participation agreements between a Lender and its
participants may, however, provide that such Lender will obtain the
approval of such participant prior to such Lender agreeing to any
amendment or waiver of any provisions of this Agreement which would
(i) extend the maturity of the Notes, (ii) reduce the interest rates on
the Loans, (iii) increase any of the Commitments of the Lender granting
the participation, or (iv) release all or any substantial part of the
Collateral other than in accordance with the terms of the Loan
Documents.
The sale of any such participation which requires Borrower to file a
registration statement with the SEC or under the securities laws of any
state shall not be permitted.
20.4.7. Assignments to Affiliates. Notwithstanding anything
in Section 20.4 to the contrary, any Lender may assign all or any
portion of its interest in the Loans to its Affiliates without the
acceptance or consent of Administrative Agent or Borrower upon payment
of the administrative fee described in Section 20.4.3, and may assign
all or any portion of its interest in the Loans to the Federal Reserve
Bank without acceptance or approval of Administrative Agent or Borrower
and without payment of any fees.
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20.5. Payment of Expenses. Borrower agrees to pay or
reimburse to each Co-Arranger all of such Co-Arranger's out-of-pocket
costs incurred in connection with such Co-Arranger's due diligence
review before execution of the Loan Documents; the negotiation and
preparation of the Commitment Letter and the Loan Documents; the
perfection of Administrative Agent's Security Interests in any
Collateral; the interpretation of any of the Loan Documents; the
enforcement of such Co-Arranger's rights and remedies under the Loan
Documents after a Default or Event of Default; any amendment of or
supplementation to any of the Loan Documents; and any waiver, consent
or forbearance with respect to any Default or Event of Default.
Borrower further agrees to pay or reimburse to each Lender all of such
Lender's out-of-pocket costs incurred in connection with the
enforcement of such Lender's rights and remedies under the Loan
Documents after a Default or Event of Default. Out-of-pocket costs may
include but are not limited to the following, to the extent they are
actually paid or incurred: title insurance fees and premiums; the cost
of searches for Security Interests existing against Covered Persons;
recording and filing fees; appraisal fees; environmental consultant
fees; litigation costs; and all attorneys' and paralegals' expenses and
reasonable fees. Attorneys' and paralegals' expenses may include but
are not limited to filing charges; telephone, data transmission,
facsimile and other communication costs; courier and other delivery
charges; and photocopying charges. Litigation costs may include but
are not limited to filing fees, deposition costs, expert witness fees,
expenses of service of process, and other such costs paid or incurred
in any administrative, arbitration, or court proceedings involving
either Co-Arranger and any Covered Person, including proceedings under
the Federal Bankruptcy Code. All costs which Borrower is obligated to
pay or reimburse to either Co-Arrangers or any Lender are Loan
Obligations payable to such Co-Arranger or such Lender, secured by the
Collateral, and are payable on demand by such Co-Arranger or such
Lender.
20.6. General Indemnity.
20.6.1. Borrower shall pay, indemnify and hold harmless
Administrative Agent and each Lender and their respective directors,
officers, employees, agents, and representatives (the "Indemnified
Parties") for, from and against, and promptly reimburse the Indemnified
Parties for, any and all claims, damages, liabilities, losses, costs
and expenses (including reasonable attorneys' fees and expenses and
amounts paid in settlement) incurred, paid or sustained by the
Indemnified Parties in connection with, arising out of, based upon or
otherwise involving or resulting from any threatened, pending or
completed action, suit, investigation or other proceeding by, against
or otherwise involving the Indemnified Parties and in any way dealing
with, relating to or otherwise involving this Agreement, any of the
other Loan Documents, or any transaction contemplated hereby or
thereby, except to the extent that they arise from the gross
negligence, bad faith or willful misconduct of any of the Indemnified
Parties. Borrower shall pay, indemnify and hold harmless the
Indemnified Parties for, from and against, and promptly reimburse the
Indemnified Parties for, any and all claims, damages, liabilities,
losses, costs and expenses (including reasonable attorneys' and
consultant fees and expenses, investigation and laboratory fees,
removal, remedial, response and corrective action costs, and amounts
paid in settlement) incurred, paid or sustained by the Indemnified
Parties as a result of the manufacture, storage, transportation,
release or disposal of any Hazardous Material on, from, over or
affecting any of the Collateral or any of the assets, properties, or
operations of any Covered Person or any predecessor in interest,
directly or indirectly, except to the extent that they arise from the
gross negligence, bad faith or willful misconduct of any of the
Indemnified Parties. Borrower shall pay, indemnify and hold harmless
the Indemnified Parties for, from and against, and shall promptly
reimburse the Indemnified Parties for, any and all claims, damages,
liabilities, losses, costs and expenses (including reasonable
attorneys' fees and expenses and amounts paid in settlement) incurred,
paid or sustained by the Indemnified Parties, arising out of or
relating to any Acquisition Documents or enforcement by Administrative
Agent of any of its rights with respect thereto,
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except to the extent that they arise from the gross negligence, bad
faith or willful misconduct of any of the Indemnified Parties.
20.6.2. The obligations of Borrower under this Section 20.6
shall survive the termination of the Commitments, the expiration of the
Letters of Credit, the payment and satisfaction of all of the Loan
Obligations, and the release of the Collateral.
20.6.3. To the extent that any of the indemnities required
from Borrower under this Section are unenforceable because they
violate any Law or public policy, Borrower shall pay the maximum amount
which it is permitted to pay under applicable Law.
20.7. Letters of Credit. Borrower assumes all risks of the
acts or omissions of any beneficiary of any of the Letters of Credit.
Neither Letter of Credit Issuer nor any of its directors, officers,
employees, agents, or representatives shall be liable or responsible
for: (a) the use which may be made of any of the Letters of Credit or
for any acts or omissions of any beneficiary in connection therewith;
(b) the validity, sufficiency or genuineness of documents, or of any
endorsement(s) thereon, even if such documents should in fact prove to
be in any or all respects invalid, insufficient, fraudulent or forged;
(c) payment by Letter of Credit Issuer against presentation of
documents which, on their face, appear to comply with the terms of any
Letter of Credit, even though such documents may fail to bear any
reference or adequate reference to any such Letter of Credit; or
(d) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit in connection with which Letter of
Credit Issuer would, pursuant to the Uniform Customs and Practices for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 (as amended from time to time), be absolved from
liability. In furtherance and not in limitation of the foregoing,
Letter of Credit Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
20.8. Changes in Accounting Principles. If Borrower, at
the end of its fiscal year and with the concurrence of its independent
certified public accountants, changes the method of valuing the
Inventory of Borrower, or if any other changes in accounting principles
from those used in the preparation of any of the Financial Statements
are required by or result from the promulgation of principles, rules,
regulations, guidelines, pronouncements or opinions by the Financial
Accounting Standards Board or the American Institute of Certified
Public Accountants (or successors thereto or bodies with similar
functions), and any of such changes result in a change in the method of
calculation of, or affect the results of such calculation of, any of
the financial covenants, standards or terms found herein, then the
parties hereto agree to enter into and diligently pursue negotiations
in order to amend such financial covenants, standards or terms so as to
equitably reflect such changes, with the desired result that the
criteria for evaluating the financial condition and results of
operations of Borrower shall be the same after such changes as if such
changes had not been made; provided, however, that until such changes
are made, all financial covenants herein and all the provisions hereof
which contemplate financial calculation hereunder shall remain in full
force and effect.
20.9. Loan Records. The date and amount of all Advances to
Borrower and payments of amounts due from Borrower under the Loan
Documents will be recorded in the records that each Lender normally
maintains for such types of transactions. The failure to record, or
any error in recording, any of the foregoing shall not, however, affect
the obligation of Borrower to repay the Loans and other amounts payable
under the Loan Documents. Borrower shall have the burden of proving
that a Lender's records are not correct. Borrower agrees that a
Lender's books and records showing the Loan Obligations and the
transactions pursuant to this Agreement shall be admissible in any
action or proceeding arising therefrom, and shall constitute prima
facie proof thereof, irrespective of whether any Loan Obligation is
also evidenced by a promissory note or other instrument.
Administrative Agent will provide to Borrower a monthly
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statement of Advances, payments, and other transactions pursuant to this
Agreement. Such statement shall be deemed correct, accurate and
binding on Borrower and an account stated (except for reversals and
reapplications of payments as provided in Section 6.7 and corrections
of errors discovered by such Lender), unless Borrower notifies such
Lender in writing to the contrary within thirty (30) days after such
statement is rendered. In the event a timely written notice of
objections is given by Borrower, only the items to which exception is
expressly made will be considered to be disputed by Borrower.
20.10. Other Security and Guaranties. Administrative Agent
or any Lender may, without notice or demand and without affecting
Borrower's obligations hereunder, from time to time: (a) take from any
Person and hold collateral (other than the Collateral) for the payment
of all or any part of the Loan Obligations and exchange, enforce and
release such collateral or any part thereof; and (b) accept and hold
any endorsement or guaranty of payment of all or any part of the Loan
Obligations and release or substitute any such endorser or guarantor,
or any Person who has given any Security Interest in any other
collateral as security for the payment of all or any part of the Loan
Obligations, or any other Person in any way obligated to pay all or any
part of the Loan Obligations.
20.11. Negotiated Transaction. Borrower, Administrative
Agent and Lenders represent one to the other that in the negotiation
and drafting of this Agreement they have been represented by and have
relied upon the advice of counsel of their choice. Borrower,
Administrative Agent and Lenders affirm that their counsel have each
had substantial roles in the drafting and negotiation of this Agreement
and, therefore, this Agreement shall be deemed drafted by Borrower,
Administrative Agent and Lenders, and the rule of construction to the
effect that any ambiguities are to be resolved against the drafter
shall not be employed in the interpretation of this Agreement.
20.12. Choice of Forum. SUBJECT ONLY TO THE EXCEPTION IN
THE NEXT SENTENCE, BORROWER, ADMINISTRATIVE AGENT, AND LENDERS HEREBY
AGREE TO THE EXCLUSIVE JURISDICTION OF THE FEDERAL COURT OF THE EASTERN
DISTRICT OF MISSOURI AND THE STATE COURTS OF MISSOURI LOCATED IN ST.
LOUIS COUNTY OR THE CITY OF ST. LOUIS, MISSOURI, AND WAIVE ANY
OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY
ACTION INSTITUTED THEREIN, AND AGREE THAT ANY DISPUTE CONCERNING THE
RELATIONSHIP BETWEEN ADMINISTRATIVE AGENT, LENDERS, AND BORROWER OR THE
CONDUCT OF ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR OTHERWISE
SHALL BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE. NOTWITHSTANDING THE
FOREGOING: (1) ADMINISTRATIVE AGENT OR LENDERS SHALL HAVE THE RIGHT TO
BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN ANY
COURTS OF ANY OTHER JURISDICTION ADMINISTRATIVE AGENT OR LENDERS DEEM
NECESSARY OR APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL, REAL
ESTATE OR OTHER SECURITY FOR THE LOAN OBLIGATIONS, AND (2) EACH OF THE
PARTIES HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THE COURTS DESCRIBED
IN THE IMMEDIATELY PRECEDING SENTENCE MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE THOSE JURISDICTIONS.
20.13. Service of Process. BORROWER HEREBY WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT
REQUESTED) DIRECTED TO BORROWER AT ITS ADDRESS SET FORTH ON THE
SIGNATURE PAGES HEREOF, AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN
THE U.S. MAILS; OR AT ADMINISTRATIVE AGENT'S OR LENDERS' OPTION, BY
SERVICE UPON CT CORPORATION, WHICH BORROWER IRREVOCABLY APPOINTS AS
BORROWER'S AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS WITHIN
THE STATE OF MISSOURI. ADMINISTRATIVE AGENT OR
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LENDERS SHALL PROMPTLY FORWARD BY REGISTERED MAIL ANY PROCESS SO SERVED
UPON SAID AGENT TO BORROWER AT ITS ADDRESS ON THE SIGNATURE PAGES
HEREOF. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ADMINISTRATIVE
AGENT OR LENDERS TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.
20.14. Jury Trial. BORROWER, ADMINISTRATIVE AGENT, AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR EITHER OF THEM IN
RESPECT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT
OR OTHERWISE. BORROWER, ADMINISTRATIVE AGENT, AND EACH LENDER AGREES
AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT EITHER MAY FILE
AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.
21. Miscellaneous.
21.1. Notices. All notices, consents, requests and demands
to or upon the respective parties hereto shall be in writing, and shall
be deemed to have been given or made when delivered in person to those
Persons listed on the signature pages hereof or when deposited in the
United States mail, postage prepaid, or, in the case of telegraphic
notice, or the overnight courier services, when delivered to the
telegraph company or overnight courier service, or in the case of telex
or telecopy notice, when sent, verification received, in each case
addressed as set forth on the signature pages hereof, or such other
address as either party may designate by notice to the other in
accordance with the terms of this paragraph. No notice given to or
demand made on Borrower by Administrative Agent or Lenders in any
instance shall entitle Borrower to notice or demand in any other
instance.
21.2. Amendments, Waivers and Consents. Unless otherwise
provided herein, no amendment to or waiver of any provision of this
Agreement, or of any of the other Loan Documents, nor consent to any
departure by Borrower herefrom or therefrom, shall be effective unless
it is in writing and signed by authorized officers of Borrower and
Required Lenders; provided, however, that any such amendment,
modification or consent shall be effective only in the specific
instance and for the purpose for which given, and no such amendment,
modification or consent shall, unless signed by authorized officers of
Borrower and all of the Lenders: (i) change the Letter of Credit
Commitment or any Revolving Commitment, Post-Offering Acquisition Loan
Commitment, General Acquisition Loan Commitment, Term Commitment, or
Canadian Term Commitment of any Lender or subject it to a greater
obligation than expressly provided for herein, (ii) reduce or forgive
the principal of any Advance or change the rate, or mechanism for
determining the rate, of interest on any Advance or any fees or other
amounts payable by Borrower hereunder, (iii) change the regularly
scheduled dates for payments of principal or interest of any Advance or
other fees or amounts payable to Lenders under the Loan Documents
(including, without limitation, the Revolver Maturity Date), (iv)
change the provisions of Section 19 to the detriment of any Lender, (v)
change the definition of "Required Lenders" hereunder, (vi) change the
provisions of this Section, (vii) release any of the Collateral (except
in the ordinary course of business or as otherwise expressly permitted
by the terms of this Agreement) or any Covered Person from its
obligations under the Loan Documents, or (viii) change any provisions
hereof requiring ratable distributions to the Lenders. No notice to or
demand on Borrower in any case shall entitle Borrower to any other or
further notice or demand in similar or other circumstances. No failure
by Administrative Agent or any Lender to exercise,
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and no delay by Administrative Agent or any Lender in exercising, any
right, remedy, power or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by Administrative
Agent or any Lender of any right, remedy, power or privilege hereunder
preclude any other exercise thereof, or the exercise of any other right,
remedy, power or privilege. Each and every right granted to
Administrative Agent and the Lenders hereunder or under any other Loan
Document or other document delivered hereunder or in connection with
this Agreement or allowed to it at law or in equity shall be deemed
cumulative and may be exercised from time to time. Notwithstanding
anything to the contrary in this Section, Administrative Agent may,
with the consent of Required Lenders, take any action reasonably deemed
necessary or desirable by Administrative Agent in connection with the
Subrogation Agreement.
21.3. Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and all
future holders of the Notes and their respective successors and
assigns, except that Borrower may not assign, delegate or transfer any
of its rights or obligations under this Agreement without the prior
written consent of Administrative Agent and Required Lenders. With
respect to Borrower's successors and assigns, such successors and
assigns shall include any receiver, trustee or debtor-in-possession of
or for Borrower.
21.4. Severability. Any provision of this Agreement which
is prohibited, unenforceable or not authorized in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, unenforceability or lack of authorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction
unless the ineffectiveness of such provision would result in such a
material change as to cause completion of the transactions contemplated
hereby to be unreasonable.
21.5. Counterparts. This Agreement may be executed by the
parties hereto on any number of separate counterparts, and all such
counterparts taken together shall constitute one and the same
instrument. It shall not be necessary in making proof of this
Agreement to produce or account for more than one counterpart signed by
the party to be charged.
21.6. Governing Law; No Third Party Rights. This
Agreement, the other Loan Documents and the Notes and the rights and
obligations of the parties hereunder and thereunder shall be governed
by and construed and interpreted in accordance with the internal laws
of the State of Missouri applicable to contracts made and to be
performed wholly within such state, without regard to choice or
conflict of laws provisions. This Agreement is solely for the benefit
of the parties hereto and their respective successors and assigns, and
no other Person shall have any right, benefit, priority or interest
under, or because of the existence of, this Agreement.
21.7. Counterpart Facsimile Execution. For purposes of
this Agreement, a document (or signature page thereto) signed and
transmitted by facsimile machine or telecopier is to be treated as an
original document. The signature of any Person thereon, for purposes
hereof, is to be considered as an original signature, and the document
transmitted is to be considered to have the same binding effect as an
original signature on an original document. At the request of any
party hereto, any facsimile or telecopy document is to be re-executed
in original form by the Persons who executed the facsimile or telecopy
document. No party hereto may raise the use of a facsimile machine or
telecopier or the fact that any signature was transmitted through the
use of a facsimile or telecopier machine as a defense to the
enforcement of this Agreement or any amendment or other document
executed in compliance with this Section.
21.8. No Other Agreements. There are no other agreements
between Administrative Agent, Lenders, and Borrower, oral or written,
concerning the subject matter of the Loan Documents, and
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all prior agreements concerning the same subject matter, including the
Commitment Letter, are merged into the Loan Documents and thereby
extinguished.
21.9. Incorporation By Reference. All of the terms of the
other Loan Documents are incorporated in and made a part of this
Agreement by this reference.
21.10. Statutory Notice. The following notice is given
pursuant to Section 432.045 of the Missouri Revised Statutes; nothing
contained in such notice shall be deemed to limit or modify the terms
of the Loan Documents:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR
TO FORBEAR FROM ENFORCING REPAYMENT OF A DEBT INCLUDING
PROMISES TO EXTEND OR RENEW SUCH DEBT ARE NOT ENFORCEABLE. TO
PROTECT YOU (BORROWER) AND US (CREDITOR) FROM MISUNDERSTANDING
OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING SUCH
MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE
AND EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS
WE MAY LATER AGREE IN WRITING TO MODIFY IT.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to
be executed by appropriate duly authorized officers as of the date
first above written.
DT INDUSTRIES, INC. a Delaware SENCORP SYSTEMS, INC., a Delaware
corporation corporation
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
-------------------------------- --------------------------------
Bruce P. Erdel, Vice President - Bruce P. Erdel, Vice President
Finance and Secretary and Secretary
Notice Address: Notice Address:
Corporate Centre, Suite 2-300 c/o DT Industries, Inc.
1949 E. Sunshine Corporate Centre, Suite 2-300
Springfield, MO 65804 1949 E. Sunshine
FAX # 417-890-0525 Springfield, MO
TEL # 417-890-1002 FAX # 417-890-0525
TEL # 417-890-0102
DETROIT TOOL AND ENGINEERING COMPANY, ADVANCED ASSEMBLY AUTOMATION, INC.,
a Delaware corporation an Ohio corporation
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
-------------------------------- --------------------------------
Bruce P. Erdel, Vice President Bruce P. Erdel, Vice President
and Secretary and Secretary
Notice Address: Notice Address:
Corporate Centre, Suite 2-300 c/o DT Industries, Inc.
1949 E. Sunshine Corporate Centre, Suite 2-300
Springfield, MO 1949 E. Sunshine
FAX # 417-890-0525 Springfield, MO
TEL # 417-890-0102 FAX # 417-890-0525
TEL # 417-890-0102
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DETROIT TOOL METAL PRODUCTS CO., a PHARMA GROUP, INC., a Delaware
Missouri corporation corporation
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
-------------------------------- --------------------------------
Bruce P. Erdel, Vice President Bruce P. Erdel, Vice President
and Secretary and Secretary
Notice Address: Notice Address:
Corporate Centre, Suite 2-300 c/o DT Industries, Inc.
1949 E. Sunshine Corporate Centre, Suite 2-300
Springfield, MO 1949 E. Sunshine
FAX # 417-890-0525 Springfield, MO
TEL # 417-890-0102 FAX # 417-890-0525
TEL # 417-890-0102
DT CANADA INC., a New Brunswick, KALISH CANADA INC., a New Brunswick,
Canada corporation Canada corporation
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
-------------------------------- --------------------------------
Bruce P. Erdel, Vice President Bruce P. Erdel, Vice President
and Secretary and Secretary
Notice Address: Notice Address:
c/o DT Industries, Inc. c/o DT Industries, Inc.
Corporate Centre, Suite 2-300 Corporate Centre, Suite 2-300
1949 E. Sunshine 1949 E. Sunshine
Springfield, MO Springfield, MO
FAX # 417-890-0525 FAX # 417-890-0525
TEL # 417-890-0102 TEL # 417-890-0102
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MID-WEST AUTOMATION ENTERPRISES, INC.,
an Illinois corporation
By: /s/ Bruce P. Erdel
--------------------------------
Bruce P. Erdel, Secretary
Notice Address:
c/o DT Industries, Inc.
Corporate Centre, Suite 2-300
1949 E. Sunshine
Springfield, MO
FAX # 417-890-0525
TEL # 417-890-0102
"GUARANTORS"
ARMAC INDUSTRIES, CO., a Delaware ASSEMBLY MACHINES, INC., a
corporation Pennsylvania corporation
By: /s/ Bruce P. Erdel By: /s/ Bruce P. Erdel
-------------------------------- --------------------------------
Bruce P. Erdel, Vice President Bruce P. Erdel, Vice President
and Secretary and Secretary
Notice Address:
Notice Address: c/o DT Industries, Inc.
c/o DT Industries, Inc. Corporate Centre, Suite 2-300
Corporate Centre, Suite 2-300 1949 E. Sunshine
1949 E. Sunshine Springfield, MO
Springfield, MO FAX # 417-890-0525
FAX # 417-890-0525 TEL # 417-890-0102
TEL # 417-890-0102
<PAGE>
MID-WEST AUTOMATION SYSTEMS, INC., an
Illinois corporation
By: /s/ Bruce P. Erdel
--------------------------------
Bruce P. Erdel, Secretary
Notice Address:
c/o DT Industries, Inc.
Corporate Centre, Suite 2-300
1949 E. Sunshine
Springfield, MO
FAX # 417-890-0525
TEL # 417-890-0102
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<PAGE>
"LENDERS"
THE BOATMEN'S NATIONAL BANK OF DRESDNER BANK AG, NEW YORK AND GRAND
ST. LOUIS, as Administrative Agent CAYMAN BRANCHES
and a Lender
By: /s/ Paul Porter By: /s/ Thomas J. Nadramia
-------------------------------- --------------------------------
Name: Paul Porter Name: Thomas J. Nadramia
---------------------------- ----------------------------
Title: Vice Pres Title: Vice President
---------------------------- ----------------------------
Notice Address:
One Boatmen's Plaza By: /s/ John N. Sweeney
St. Louis, MO 63101 --------------------------------
FAX # 314-466-6645 Name: John N. Sweeney
TEL # 314-466-6709 ----------------------------
Title: Assistant Vice President
----------------------------
Notice Address:
190 South LaSalle Street
Suite 2700
Chicago, IL 60603
FAX # 312-444-1305
TEL # 312-444-1326
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EXHIBIT 2.1
GLOSSARY AND INDEX OF DEFINED TERMS
"AAA" is defined on page 1.
"Account": as to any Person, the right of such Person to payment for
goods sold or leased or for services rendered by such Person.
"Account Assignment": the assignment of the Cash Collateral Account
that is executed and delivered to Administrative Agent for the benefit
of Lenders as provided herein, and all amendments, restatements, and
replacements thereof.
"Account Debtor": the obligor on any Account.
"Acquiring Company": the Person obligated to pay or provide the
consideration payable in connection with a Permitted Acquisition upon
the consummation thereof.
"Acquisition Documents": the agreement under which an Permitted
Acquisition by a Borrower will be made, all amendments, schedules and
exhibits thereto, and all other agreements, documents and certificates
which will be executed and delivered in connection with the
transactions contemplated thereby.
"Adjusted LIBO Rate" is defined in Section 4.3.2.
"Adjusted Operating Cash Flow" is defined in Section 17.1.
"Administrative Agent": The Boatmen's National Bank of St. Louis.
"Administrative Fee" is defined in Section 5.3.
"Advance": a Revolving Advance, a Swingline Advance, a Term Advance, a
Post-Offering Acquisition Advance or a General Acquisition Advance.
"Advance Date" is defined in Section 7.5.1.
"Advance Request": a request by a Borrowing Officer for an Advance that
meets the requirements of Section 7.12.
"Affected Principal Amount" is defined in Section 14.
"Affiliate": with respect to any Person, (a) any other Person who is a
partner, director, officer or stockholder of such Person; and (b) any
other Person which, directly or indirectly, is in control of, is
controlled by or is under common control with such Person, and any
partner, director, officer or stockholder of such other Person
described. For purposes of this Agreement, control of a Person by
another Person shall be deemed to exist if such other Person has the
power, directly or indirectly, either to (i) vote twenty percent (20%)
or more of the securities having the power to vote in an election of
directors of such Person, or (ii) direct the management of such Person,
whether by contract or otherwise and whether alone or in combination
with others.
<PAGE>
"Aggregate Alternate Base Rate Canadian Term Loan": the sum of all
Alternate Base Rate Loans that are Canadian Term Loans.
"Aggregate Alternate Base Rate General Acquisition Loan": the sum of
all Alternate Base Rate Loans that are General Acquisition Loans.
"Aggregate Alternate Base Rate Post-Offering Acquisition Loan": the sum
of all Alternate Base Rate Loans that are Post-Offering Acquisition
Loans.
"Aggregate Alternate Base Rate Revolving Loan": the sum of all
Alternate Base Rate Revolving Loans.
"Aggregate Alternate Base Rate Term Loan": the sum of all Alternate
Base Rate Loans that are Term Loans.
"Aggregate Canadian Term Commitment": is defined in Section 3.4.
"Aggregate Canadian Term Loan": is defined in Section 3.4.
"Aggregate Commitment": the sum of the Aggregate Revolving Commitment,
the Aggregate Term Commitment, the Aggregate Post-Offering Acquisition
Loan Commitment and the Aggregate General Acquisition Loan Commitment.
"Aggregate General Acquisition Loan" is defined in Section 3.8.
"Aggregate General Acquisition Loan Commitment" is defined in Section 3.8.
"Aggregate LIBOR Loan": the sum of all LIBOR Loans.
"Aggregate Loan": the sum of the Aggregate Revolving Loan, the
Aggregate Swingline Loan, the Aggregate Term Loan, the Aggregate
Canadian Term Loan, the Aggregate Post-Offering Acquisition Loan and
the Aggregate General Acquisition Loan.
"Aggregate Post-Offering Acquisition Advance": the sum of all
Post-Offering Acquisition Advances to be made on the same Advance Date.
"Aggregate Post-Offering Acquisition Loan" is defined in Section 3.5.
"Aggregate Post-Offering Acquisition Loan Commitment" is defined in
Section 3.5.
"Aggregate Revolving Advance": the sum of all Revolving Advances to be
made on the same Advance Date.
"Aggregate Revolving Commitment" is defined in Section 3.1.1.
"Aggregate Revolving Loan" is defined in Section 3.1.1.
"Aggregate Swingline Loan": on any date, the outstanding principal
amount of all Swingline Advances as of such date.
"Aggregate Term Advance": the sum of all Term Advances to be made on
the same Advance Date.
"Aggregate Term Commitment" is defined in Section 3.3.
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<PAGE>
"Aggregate Term Loan" is defined in Section 3.3.
"Agreement" is defined on page 1.
"Alternate Base Rate Advance": an Advance that will be a Loan that
bears interest at the Alternate Base Rate.
"Alternate Base Rate": the CBR plus the Corporate Base Rate Increment.
"Alternate Base Rate Loan": a Loan that bears interest at the Alternate
Base Rate.
"Amendments": collectively, Amendment Number One to the Initial Loan
Agreement dated as of August 28, 1995, Amendment Number Two to the
Initial Loan Agreement dated as of September 26, 1995, Amendment Number
Three to the Initial Loan Agreement dated as of November 22, 1995, St.
Louis, Missouri time, (November 23, 1995, London, England time),
Amendment Number Four to the Initial Loan Agreement dated as of January
16, 1996, and Amendment Number Five to the Initial Loan Agreement dated
as of March 12, 1996.
"AMI": Assembly Machines, Inc., a Pennsylvania Corporation.
"Anniversary Date": each anniversary of the Execution Date.
"Armac" is defined on page 1.
"Asbestos Material": either asbestos or asbestos-containing materials.
"Base Conversion Rate": as defined in Section 17.1.
"Beneficial Owner": as defined in Rule 13-D-3 of the Securities and
Exchange Commission.
"Boatmen's" is defined on page 1.
"Borrower" is defined in Section 2.2.
"Borrower's Representative" is defined in Section 2.2.
"Borrowing Base" is defined in Section 3.1.3.
"Borrowing Base Certificate" is defined in Section 15.15.1.
"Borrowing Officer": an officer of Borrower duly authorized on behalf
of Borrower to request Advances under this Agreement.
"British Pounds" and the sign "pound sterling": lawful money of Great
Britain.
"Business Day": a day other than a Saturday, Sunday or other day on
which commercial banks are authorized or required to close under the
laws of either the United States or the State of Missouri.
"Canadian Borrowers": Kalish Canada and DT Canada.
"Canadian Letter of Credit" is defined in Section 3.9.
iii
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"Canadian Loan Guarantors": DTI, Engineering, Metal Products, Sencorp,
PGI, AAA, Armac, AMI, Mid-West Systems, and Mid-West Enterprises.
"Canadian Loan Guaranty": is defined in Section 8.6.
"Canadian Term Advance": is defined in Section 3.4.
"Canadian Term Commitment": is defined in Section 3.4.
"Canadian Term Loan": is defined in Section 3.4.
"Canadian Term Note": is defined in Section 3.4.
"Capital Expenditure" is defined in Section 17.1.
"Capitalization" is defined in Section 17.1.
"Capital Lease": any lease that has been or should be capitalized under
GAAP.
"Cash Collateral Account" is defined in Section 6.1.2.1.
"CBR Increment" is defined in Section 4.3.1.
"Charter Documents": the articles or certificate of incorporation and
bylaws of a corporation; the certificate of limited partnership and
partnership agreement of a limited partnership; the partnership
agreement of a general partnership; or the indenture of a trust.
"Claims Act": the Assignment of Claims Act of 1940, as amended from
time to time.
"Co-Arranger": Boatmen's and Dresdner, individually.
"Code": the Internal Revenue Code of 1986, as amended from time to
time, and all regulations thereunder of the IRS.
"Collateral": all of the Real Property Collateral, Personal Property
Collateral, and other property in which Administrative Agent has a
Security Interest for the benefit of Lenders and all proceeds thereof.
"Commercial Letter of Credit": a commercial (documentary) letter of
credit issued by Letter of Credit Issuer pursuant to the Letter of
Credit Commitment in Section 3.9.
"Commitment Fee" is defined in Section 5.2.
"Commitment Fee Rate" is defined in Section 5.2.
"Commitments": the Aggregate Revolving Commitment, the Swingline
Commitment, the Aggregate Term Commitment, the Canadian Term
Commitment, the Aggregate Post-Offering Acquisition Loan Commitment,
the Aggregate General Acquisition Loan Commitment and the Letter of
Credit Commitment.
"Commonly Controlled Entity": a Person which is under common control
with another Person within the meaning of Section 414(b) or (c) of the
Code.
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<PAGE>
"Contract": any contract, note, bond, indenture, deed, mortgage, deed
of trust, security agreement, pledge, hypothecation agreement,
assignment, or other agreement or undertaking, or any security.
"Covered Person" is defined in Section 2.3.
"Conversion Date" is defined in Section 4.6.
"Corporate Base Rate": the per annum interest rate designated from time
to time by Administrative Agent as its Corporate Base Rate, which is a
reference rate and does not necessarily represent the lowest or best
rate charged to any customer of Administrative Agent.
"Current Liabilities" is defined in Section 17.1.
"Current Assets" is defined in Section 17.1.
"Default": any of the events listed in Section 18.1 of this Agreement,
without giving effect to any requirement for the giving of notice, for
the lapse of time, or both, or for the happening of any other
condition, event or act.
"Disclosure Schedule": the Disclosure Schedule attached hereto as
Exhibit 13.
"Distribution" is defined in Section 16.9.
"DOL": the United States Department of Labor.
"Dollars" and the sign "$": lawful money of the United States.
"Dresdner": Dresdner Bank AG, New York and Grand Cayman Branches.
"Dresdner UK Credit Agreement": that certain credit agreement dated as
of November 23, 1995 London, England time (November 22, 1995 St. Louis,
Missouri time) between Dresdner UK and DTUK.
"Dresdner UK Loan": the credit facilities provided by Dresdner UK to
DTUK pursuant to the DTUK Loan Documents.
"Dresdner UK Loan Documents": the Dresdner UK Credit Agreement and all
other agreements, certificates, documents, instruments and other
writings executed in connection with the financing arrangements
contemplated by the Dresdner UK Credit Agreement.
"Dresdner UK": Dresdner Bank AG, London Branch.
"DT Canada": DT Canada Inc., a New Brunswick, Canada corporation.
"DTI": DT Industries, Inc., a Delaware corporation.
"DTUK": DT Industries (UK) Limited, a United Kingdom corporation.
"Effective Date" is defined in Section 1.
"Eligible Accounts": only such Accounts of Borrower as Administrative
Agent, in its sole discretion, which shall not be unreasonably
exercised, shall from time to time elect to consider Eligible Accounts
for the purposes of this Agreement. Without limiting the discretion of
Administrative Agent to consider Accounts
v
<PAGE>
of Borrower not to be Eligible Accounts, and by way of example only
of types of Accounts that Administrative Agent will consider not to be
Eligible Accounts, the following classes of Accounts will not be
Eligible Accounts, unless approved in writing by Administrative Agent
in each case: (i) any Account with respect to which Administrative
Agent does not have a valid and enforceable, first priority, perfected
Security Interest; (ii) any Account which remains unpaid as of 90 days
after the original date of the applicable invoice; (iii) any Account
of a single Account Debtor if 25% or more of the balances due on all
Accounts of such Account Debtor are neligible under clause (i) or
(ii); (iv) any Account with respect to which the Account Debtor is (a)
an Affiliate or employee of Borrower or (b) a supplier, creditor, sales
representative or distributor or Borrower; provided, however that such
Account shall be ineligible only to the extent of any payable due
and owing by Borrower in favor of such Account Debtor; (v) any Account
as to which the perfection of Administrative Agent's Security Interest
is governed by any federal, state or local statutory requirements other
than those of the UCC or the Claims Act; (vii) any Account with respect
to which the Account Debtor is the United States of America or any
department, agency, public corporation or other instrumentality thereof,
unless filings and acknowledgements in accordance with the Claims Act
and any other steps necessary to perfect Administrative Agent's
Security Interest have been complied with to Administrative Agent's
satisfaction; (viii) any Account with respect to which the Account
Debtor is not organized under the laws of the United States or Canada
and does not maintain its chief executive office within either the
United States or Canada and any Account with respect to which the
Account Debtor is the government of any foreign country or any
municipality or other political subdivision thereof, or any department,
agency, public corporation or other instrumentality thereof, unless
either (a) the creditor with respect to such Account and Administrative
Agent are beneficiaries of a letter of credit in the amount of such
Account that secures such Account Debtor's payment on such Account and
is in form and substance satisfactory to Administrative Agent and has
been issued by a bank satisfactory to Administrative Agent and, if so
required by Administrative Agent, confirmed by a bank satisfactory to
Administrative Agent, or (b) the creditor with respect to such Account
has obtained for the benefit of Administrative Agent F.C.I.A. insurance
insuring such Account Debtor's payment of such Account; (ix) any
Account with respect to which the Account Debtor is located in any
state denying creditors access to its courts without qualifying to do
business in such state or filing a notice in whatever form or
substance, unless Borrower has so qualified or filed to Administrative
Agent's satisfaction; (x) any Account with respect to goods or services
whose delivery or performance has been rejected by the Account Debtor
or whose earlier acceptance has been revoked; (xi) any Account, the
goods giving rise to which have not been shipped and delivered to and
accepted by the Account Debtor or the services giving rise to which
have not been performed by Borrower, (xii) any Account arising from the
delivery of goods or performance of services for which an invoice has
not been sent to the Account Debtor within five days after such
delivery or performance; (xiii) any Account owing by an Account Debtor
that is the subject of a bankruptcy or similar insolvency proceeding,
has made an assignment for the benefit of creditors, has acknowledged
that it is unable to pay its debts as they mature, or whose assets have
been transferred to a receiver or trustee, or who has ceased business
as a going concern or, if an individual, who is dead or has been
judicially declared incompetent; (xiv) any Account with respect to
which the Account Debtor's obligation to pay the Account is conditional
upon the Account Debtor's approval or is otherwise subject to any
repurchase obligation or return right, as with sales made on a
bill-and-hold, guarantied sale, sale-and-return, sale on approval
(except with respect to Accounts in connection with which Account
Debtors are entitled to return Inventory solely on the basis of the
quality of such Inventory) or consignment basis or, to the extent of
any dilution resulting therefrom, Accounts arising from a sale
involving any cash discount other than cash discounts offered by
Borrower in the ordinary course of business, contra-account, credit
memorandum or other similar factor; (xv) any Account owing by an
Account Debtor that has disputed liability or made any claim with
respect to any other Account due from such Account Debtor, or that has
any right of setoff against such Account, or to which Borrower is
indebted in any way, but only to the extent of such indebtedness,
setoff, dispute or claim; (xvi) any Account subject to a chargeback
from a volume discount or an advertising discount, but only to the
extent of such chargeback or discount; (xvii) any Account owing by an
Account Debtor whose Indebtedness to Borrower exceeds a credit limit
satisfactory to Administrative Agent; (xviii) any Account of an Account
Debtor with respect to particular goods still in the possession
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of the creditor on the Account or included in Inventory of such creditor
and against which the Account Debtor has filed a financing statement
under the UCC or has obtained or purported to have obtained a
Security Interest; (xix) any Account with respect to which the delivery
of goods or performance of services is bonded; (xx) any Account as
to which Administrative Agent does not have the right or ability to
obtain direct payment to Administrative Agent; (xxi) any Account with
respect to which any of the representations, warranties, covenants and
agreements contained in any of the Loan Documents are not or have
ceased to be complete and correct or have been breached; (xxii) any
Account with respect to which, in whole or in part, a check or other
instrument for the payment of money has been received, presented for
payment and returned uncollected for any reason; (xxiii) any Account
which represents a progress billing or as to which Borrower has
extended the time for payment without the consent of Administrative
Agent (for purposes hereof, "progress billing" being any invoice for
goods sold or leased or services rendered under a contract or agreement
pursuant to which the Account Debtor's obligation to pay such invoice
is conditioned upon Borrower's completion of any further performance
under the contract or agreement); (xxiv) any Account which is evidenced
by a promissory note or other instrument or by chattel paper or which
has been reduced to judgment; (xxv) any Account which arises out of a
sale not made in the ordinary course of Borrower's business; and (xxvi)
any Account as to which Administrative Agent has determined in its
absolute discretion that the prospect of payment or collection on a
timely basis is impaired or that Administrative Agent otherwise deems
in its absolute discretion to be uncreditworthy.
"Eligible Inventory": all Inventory, including Inventory in Canada,
except Inventory (i) that is obsolete, not in good condition, or not
either currently usable or currently saleable in the ordinary course of
Borrower's business; (ii) that is not subject to a valid and
enforceable, first priority, perfected Security Interest in favor of
Bank; (iii) that is in the possession of Borrower but not owned by
Borrower; (iv) that is stored at a location other than the locations
listed in the Disclosure Statement, unless approved by Administrative
Agent in writing; (v) that is not satisfactory to Administrative Agent
because of its age, condition, type, or quantity, (vi) to which
Borrower does not have lawful and absolute title, (vii) to which
Borrower does not have the full and unqualified right to assign and
grant a Security Interest to Administrative Agent as security for the
Loan Obligations, (viii) which is subject to any Security Interest
other than Permitted Security Interests and (xix) with respect to which
any of the representations, warranties, covenants and agreements
contained in any of the Loan Documents are not or have ceased to be
complete and correct or have been breached.
"Employment Law": ERISA, the Occupational Safety and Health Act, the
Fair Labor Standards Act, or any other Law pertaining to the terms or
conditions of labor or safety in the workplace.
"Encumbrance": as to any item of real or personal property, any
easement, right-of-way, license, condition, or restrictive covenant, or
zoning or similar restriction, that is not a Security Interest but is
enforceable by any Person other than the record owner of such property.
"Engineering" is defined on page 1.
"Environmental Law": the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act,
the Clean Water Act, the Clean Air Act, or any other Law pertaining to
environmental quality or remediation of Hazardous Material.
"Environmental Property Transfer Act": any Law that conditions,
restricts, prohibits or requires any notification or disclosure
triggered by the closure of any property or the transfer, sale or lease
of any property or deed of title for any property for environmental
reasons, including any so-called "Environmental Cleanup Responsibility
Acts" or "Responsible Property Transfer Acts".
"EPA": the United States Environmental Protection Agency.
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"ERISA Affiliate": any trade or business (irrespective of whether
incorporated) which is a member of a group of which Borrower is a
member and thereafter treated as a single employer under section 414(b),
(c), (m) or (o) of the Code or applicable Treasury Regulations.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Event of Default": any of the events listed in Section 18.1 of this
Agreement as to which any requirement for the giving of notice, for the
lapse of time, or both, or for the happening of any further condition,
event or act has been satisfied.
"Excess Cash Flow" is defined in Section 6.4.4.4.
"Execution Date": the date when this Agreement has been executed.
"Existing Default": a Default which has occurred and is continuing, or
an Event of Default which has occurred, and which has not been waived
in writing by Administrative Agent.
"Federal Funds Rate": for any day, the rate per annum (rounded to the
nearest 1/100 of 1% or, if there is no nearest 1/100 of 1%, then to the
next higher 1/100 of 1%) equal to the weighted average of the rates on
overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of St. Louis on the Business Day
next succeeding such day, provided that (i) if the day for which such
rate is to be determined is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business
Day, and (ii) if such rate is not so published for any day, the Federal
Funds Rate for such day shall be the average rate charged to
Administrative Agent on such day on such transactions as determined by
Administrative Agent.
"Fee Letter": that certain letter from Co-Arrangers to DTI dated
July 19, 1996.
"Financial Statements": financial statements of Borrower that are
furnished to Administrative Agent as required in Section 15.14 of this
Agreement.
"Fixed Charges" is defined in Section 17.1.
"FRB": the Board of Governors of the Federal Reserve System and any
successor thereto or to the functions thereof.
"GAAP": those generally accepted accounting principles set forth in
Statements of the Financial Accounting Standards Board and in Opinions
of the Accounting Principles Board of the American Institute of
Certified Public Accountants or which have other substantial
authoritative support in the United States and are applicable in the
circumstances, as applied on a consistent basis.
"General Acquisition Advance" is defined in Section 3.8.
"General Acquisition Balloon Payment" is defined in Section 6.3.2.
"General Acquisition Expiration Date": the date that is the first
anniversary of the Effective Date.
"General Acquisition Loan" is defined in Section 3.8.
"General Acquisition Loan Commitment" is defined in Section 3.8.
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"General Acquisition Loan Maturity Date": July 23, 2001.
"General Acquisition Note" is defined in Section 3.8.
"Governmental Authority": the federal government of the United States;
the government of any foreign country that is recognized by the United
States or is a member of the United Nations; any state of the United
States; any local government or municipality within the territory or
under the jurisdiction of any of the foregoing; any department, agency,
division, or instrumentality of any of the foregoing; and any court,
arbitrator, or board of arbitrators whose orders or judgements are
enforceable by or within the territory of any of the foregoing.
"Group": as used in Regulation 13-D issued by the Securities and
Exchange Commission.
"Guarantor": Armac, AMI, Mid-West Systems and any other Person party to
a Guaranty.
"Guaranty": each guaranty of part or all of the Loan Obligations
executed and delivered to Administrative Agent for the benefit of
Lenders by any Guarantor, and all amendments, restatements, and
replacements thereof.
"Hazardous Material": any hazardous, radioactive, toxic, solid or
special waste, material, substance or constituent thereof, or any other
such substance (as defined under any applicable law or regulation),
including Asbestos Material.
"Historical Combined": for any period, means either consolidated and
consolidating financial statements or financial measurements, as the
case may be, in accordance with GAAP, that include all Borrowers and
their Subsidiaries, including Borrowers and Subsidiaries that are
Surviving Companies, as though such Borrowers and Subsidiaries were
combined for the entire period.
"Indebtedness": as to any Person at any particular date, any
contractual obligation enforceable against such Person (i) to repay
borrowed money; (ii) to pay the deferred purchase price of property or
services; (iii) to make payments or reimbursements with respect to bank
acceptances or to a factor; (iv) to make payments or reimbursements
with respect to letters of credit whether or not there have been
drawings thereunder; (v) with respect to which there is any Security
Interest in any property of such Person; (vi) to make any payment or
contribution to a Multi-Employer Plan; (vii) that is evidenced by a
note, bond, debenture or similar instrument; and (viii) under any
conditional sale agreement or title retention agreement; less, for the
period between the Effective Date and the date 30 days after the
Effective Date only, the amount of cash and marketable securities of
Mid-West Systems and Mid-West Enterprises determined in accordance with
GAAP.
"Indemnified Parties" is defined in Section 20.6.
"Indirect Obligation": as to any Person, (a) any guaranty by such
Person of any Obligation of another Person; (b) any Security Interest
in any property of such Person that secures any Obligation of another
Person, (c) any enforceable contractual requirement that such Person
(i) purchase an Obligation of another Person or any property that is
security for such Obligation, (ii) advance or contribute funds to
another Person for the payment of an Obligation of such other Person or
to maintain the working capital, net worth or solvency of such other
Person as required in any documents evidencing an Obligation of such
other Person, (iii) purchase property, securities or services from
another Person for the purpose of assuring the beneficiary of any
Obligation of such other Person that such other Person has the ability
to timely pay or discharge such Obligation, (iv) grant a Security
Interest in any property of such Person to secure any Obligation of
another Person, or (v) otherwise assure or hold harmless the
beneficiary of any Obligation of another Person against loss in respect
thereof; and (d) any other contractual requirement enforceable
ix
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against such Person that has the same substantive effect as any
of the foregoing. The term "Indirect Obligation" does not, however,
include the indorsement by a Person of instruments for deposit or
collection in the ordinary course of business or the liability of a
general partner of a partnership for Obligations of such partnership.
The amount of any Indirect Obligation of a Person shall be deemed to be
the stated or determinable amount of the Obligation in respect of which
such Indirect Obligation is made or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof as
determined by such Person in good faith.
"Initial Financial Statements" is defined in Section 10.1.4.
"Initial Loan Agreement" is defined on page 1.
"Insurance/Condemnation Proceeds": insurance proceeds payable as a
consequence of damage to or destruction of any of the Collateral and
proceeds payable as a consequence of condemnation or sale in lieu of
condemnation of any of the Collateral.
"Intellectual Property Assignment": each assignment of Intellectual
Property that Borrower executes and delivers to Administrative Agent
for the benefit of Lenders, either on or after the Execution Date, and
all amendments, restatements, and replacements thereof.
"Intellectual Property": as to any Person, any domestic or foreign
patents or patent applications of such Person, any inventions made or
owned by such Person upon which either domestic or foreign patent
applications have not yet been filed, any domestic or foreign trade
names or trademarks of such Person, any domestic or foreign trademark
registrations or applications filed by such Person, any domestic or
foreign service marks of such Person, any domestic or foreign service
mark registrations and applications by such Person, any domestic or
foreign copyrights of such Person, and any domestic or foreign
copyright registrations or applications by such Person.
"Interest Expense" is defined in Section 17.1.
"Interest Period" is defined in Section 4.5.
"Interest Rate Protection Agreement": an agreement in form and
substance acceptable to Administrative Agent designed to protect
Borrower from the fluctuations of interest rates, whether in the form
of an interest rate cap, interest rate swap or exchange, interest rate
corridor, or interest rate collar.
"Inventory": goods owned and held by a Person for sale, lease or resale
or furnished or to be furnished under contracts for services, and raw
materials, goods in process, materials, component parts and supplies
used or consumed, or held for use or consumption in such Person's
business.
"Investment": (a) a loan or advance of money or property to a Person,
(b) stock or other equity interest in a Person, (c) a debt instrument
issued by a Person, whether or not convertible to stock or other equity
interest in such Person, or (d) any other interest in or rights with
respect to a Person which include, in whole or in part, a right to
share, with or without conditions or restrictions, some or all of the
revenues or net income of such Person.
"IRS": the Internal Revenue Service.
"Kalish Acquisition": the acquisition by DTI through one or more
wholly-owned Subsidiaries of all or substantially all of the assets of
H.G. Kalish, Inc., both in the United States and Canada.
"Kalish Canada": Kalish Canada Inc., a New Brunswick, Canada
corporation.
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"Law": any statute, rule, regulation, order, judgment, award or decree
of any Governmental Authority.
"Lender": each of the lenders listed on the signature pages hereof.
"Lenders' Exposure": The sum of the Aggregate Revolving Loan, the
Aggregate Swingline Loan, the Aggregate Term Loan, the Aggregate
Canadian Term Loan, the Aggregate Post-Offering Acquisition Loan, the
Aggregate General Acquisition Loan and the Letter of Credit Exposure.
"Lending Office": 800 Market Street, St. Louis, MO 63101; Attention:
Leveraged Lending.
"Letter of Credit": the Swiftpack Letter of Credit, the Canadian Letter
of Credit and any letter of credit, whether a Standby Letter of Credit
or a Commercial Letter of Credit, issued by Letter of Credit Issuer
pursuant to the Letter of Credit Commitment in Section 3.9.
"Letter of Credit Commitment" is defined in Section 3.9.
"Letter of Credit Exposure": the sum of (i) the undrawn amount of the
Canadian Letter of Credit, plus (ii) the undrawn amount of the
Swiftpack Letter of Credit, plus (iii) the undrawn amount of all
outstanding letters of credit issued for the account of Borrower under
the Letter of Credit Commitment, plus (iv) all amounts drawn on all
Letters of Credit and not reimbursed by Borrower.
"Letter of Credit Fee" is defined in Section 5.4.
"Letter of Credit Issuer": the Lender that has committed in Section 3.9
to issue Letters of Credit.
"Letter of Credit Request" is defined in Section 7.13.
"LIBO Rate" is defined in Section 4.3.2.
"LIBOR Advance": an Advance that will be a Loan bearing interest at the
Adjusted LIBO Rate.
"LIBOR Increment" is defined in Section 4.3.2.
"LIBOR Loan: a Loan that bears interest at the Adjusted LIBO Rate
"Loan": a Revolving Loan, a Swingline Loan, a Term Loan, a Canadian
Term Loan, a Post-Offering Acquisition Loan or a General Acquisition
Loan.
"Loan Documents": this Agreement, the Notes, the Security Documents and
all other agreements, certificates, documents, instruments and other
writings executed in connection herewith.
"Loan Obligations": all of the obligations of the Canadian Loan
Guarantors under the Canadian Loan Guaranty, all of Borrower's
Indebtedness owing to each Lender under the Loan Documents, whether as
principal, interest, fees or otherwise, all reimbursement obligations
of Borrower to each Lender with respect to the Letter of Credit
Exposure, and any exchange rate fluctuations in connection therewith,
all amounts paid or remitted or required to be paid or remitted by any
Lender to Dresdner UK under the terms of the Subrogation Agreement, all
obligations of Borrower to any Lender under Rate Hedging Obligations or
the like or options therefor, and all other obligations and liabilities
of Borrower to each Lender under the Loan Documents (including all
extensions, renewals, modifications, rearrangements, restructures,
replacements and refinancings of the foregoing, whether or not the same
involve modifications to interest rates or other payment terms),
whether now existing or hereafter created, absolute or contingent,
direct or indirect, joint or several, secured or unsecured, due or not
due, contractual or tortious, liquidated or
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unliquidated, arising by operation of law or otherwise, and whether or
not presently contemplated by Borrower, Guarantors, Canadian Loan
Guarantors and Lenders in the Loan Documents; provided, however, that
the term "Loan Obligations" (i) with respect to the Canadian
Borrowers, is specifically limited to all of the foregoing that arises
out of the Aggregate Canadian Term Commitment, and (ii) with respect to
each other Borrower, Guarantor, and Canadian Loan Guarantor specifically
includes all of the foregoing including its joint and several liability
pursuant to the Canadian Loan Guaranty.
"Lockboxes" is defined in Section 6.1.2.1.
"Management Incentive Stock Issue": the issuance of capital stock of
Borrower to its executive employees pursuant to purchase and
shareholder agreements (copies of which will be provided to
Co-Arrangers prior to such issuance) that results in all executive
employees of Borrower owning not more than 10% of the total issued and
outstanding shares of capital stock of Borrower immediately after such
issuance.
"Mandatory Advance" is defined in Section 7.2.1.
"Material Adverse Effect": as to any Person and with respect to any
event or occurrence of whatever nature (including any adverse
determination in any litigation, arbitration, investigation or
proceeding), a material adverse effect on the business, operations,
revenues, financial condition, property, or business prospects of such
Person taken as a whole, or the value of the Collateral, or the ability
of such Person to timely pay or perform such Person's Obligations
generally, or in the case of Borrower specifically, the ability of
Borrower to pay or perform any of Borrower's Obligations to Lender.
"Material Agreement": as to any Person, any Contract to which such
Person is a party or by which such Person is bound which, if violated
or breached, would have a Material Adverse Effect on such Person or any
Covered Person.
"Material Law": any Law whose violation by a Person would have a
Material Adverse Effect with respect to such Person.
"Material License": (i) as to any Covered Person, any license, permit
or consent from a Governmental Authority or other Person and any
registration and filing with a Governmental Authority or other Person
which if not obtained, held or made by such Covered Person would have a
Material Adverse Effect with respect to such Covered Person or any
other Covered Person, and (ii) as to any Person who is a party to this
Agreement or any of the other Loan Documents, any license, permit or
consent from a Governmental Authority or other Person and any
registration or filing with a Governmental Authority or other Person
that is necessary for the execution or performance by such party, or
the validity or enforceability against such party, of this Agreement or
such other Loan Document.
"Material Obligation": as to any Person, an Obligation of such Person
which if not fully and timely paid or performed would have a Material
Adverse Effect on such Person.
"Material Proceeding": any litigation, investigation or other
proceeding by or before any Governmental Authority (i) which involves
any of the Loan Documents or any of the transactions contemplated
thereby, or involves a Covered Person as a party or any property of a
Covered Person, and would have a Material Adverse Effect with respect
to any Covered Person if adversely determined, (ii) in which there has
been issued an injunction, writ, temporary restraining order or any
other order of any nature which purports to restrain or enjoin the
making of any Advance, the consummation of any other transaction
contemplated by the Loan Documents, or the enforceability of any
provision of any of the Loan Documents, (iii) which involves the actual
or alleged breach or violation by a Covered Person of, or default by a
Covered Person under, any Material Agreement, or (iv) which involves
the actual or alleged violation by a Covered Person of any Material Law.
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"Maturity": as to any Indebtedness, the time when it becomes payable in
full, whether at a regularly scheduled time, because of acceleration or
otherwise.
"Maximum Available Amount" is defined in Section 3.1.2.
"Maximum Swingline Amount" is defined in Section 3.2.2.
"Metal Products" is defined on page 1.
"Mid-West Enterprises": Mid-West Automation Enterprises, Inc., an
Illinois corporation.
"Mid-West Systems": Mid-West Automation Systems, Inc., an Illinois
corporation.
"Multi-employer Plan": a Pension Benefit Plan which is a multi-employer
plan as defined in Section 4001(a)(3) of ERISA.
"Net Worth" is defined in Section 17.1.
"Note": the Swingline Note, any Revolving Note, any Term Note, any
Post-Offering Acquisition Note or any General Acquisition Note.
"Notice of Conversion/Continuation" is defined in Section 4.6.
"Obligation": as to any Person, any Indebtedness of such Person, any
guaranty by such Person of any Indebtedness of another Person, and any
contractual requirement enforceable against such Person that does not
constitute Indebtedness of such Person or a guaranty by such Person but
which would involve the expenditure of money by such Person if complied
with or enforced.
"Operating Cash Flow" is defined in Section 17.1.
"Operating Lease": any lease that is not a Capital Lease.
"Original Loan Agreement" is defined on page 1.
"Overadvance" is defined in Section 6.4.3.
"PBGC": the Pension Benefit Guaranty Corporation.
"Pension Benefit Plan": any pension or profit-sharing plan which is
covered by Title I of ERISA and all other benefit plans and in respect
of which a Covered Person or a Commonly Controlled Entity of such
Covered Person is an "employer" as defined in Section 3(5) of ERISA.
"Permitted Acquisition": an acquisition by DTI or a wholly-owned
Subsidiary of DTI of at least 80% of the outstanding stock, or
substantially all of the assets, of another Person and with respect to
which all of the conditions in Section 11 have been satisfied or waived
in writing by Required Lenders, or Lenders, as the case may be.
"Permitted Indebtedness" is defined in Section 16.2.
"Permitted Indirect Obligations" is defined in Section 16.4.
"Permitted Investments" is defined in Section 16.1.
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"Permitted Security Interests" is defined in Section 16.5.
"PGI" is defined on page 1.
"Person": any individual, partnership, corporation, trust,
unincorporated association, joint venture, limited liability company,
Governmental Authority, or other organization in any form that has the
legal capacity to sue or be sued. If the context so implies or
requires, the term Person includes Borrower.
"Personal Property Collateral": all of the Goods, Equipment, Accounts,
Inventory, Instruments, Documents, Chattel Paper, General Intangibles
and other personal property of Borrower, whether now owned or hereafter
acquired, and all proceeds thereof, in which Administrative Agent at
any time holds a Security Interest for the benefit of Lenders.
"Post-Offering Acquisition Advance" is defined in Section 3.5.
"Post-Offering Acquisition Balloon Payment" is defined in Section 6.3.2.
"Post-Offering Acquisition Loan" is defined in Section 3.5.
"Post-Offering Acquisition Loan Availability Date": the date on which
Borrower issues equity securities in a minimum amount of $50,000,000
and makes a prepayment on the Aggregate Term Loan with the net proceeds
thereof.
"Post-Offering Acquisition Loan Availability Period": the period
beginning on the Post-Offering Acquisition Loan Availability Date and
ending on (i) the first anniversary thereof, or (ii) if extended by
Borrower pursuant to Section 3.6, the second anniversary thereof.
"Post-Offering Acquisition Loan Commitment" is defined in Section 3.5.
"Post-Offering Acquisition Loan Maturity Date": July 23, 2001.
"Post-Offering Acquisition Note" is defined in Section 3.5.
"Prior Lenders": the lenders under the Original Loan Agreement.
"Prior Senior Indebtedness": as defined in Recital D.
"Proceeds Account" is defined in Section 6.4.4.3.
"Qualified Financial Institution": any commercial bank chartered under
the laws of the United States or any state thereof having capital and
surplus of not less than $500,000,000.
"Rate Hedging Obligation": of a Person means any and all Obligations of
such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced, or acquired (including all
renewals, extensions, modifications thereof and substitutions
therefor), under (a) any Interest Rate Protection Agreement and any and
all other agreements, devices or arrangements designed to protect at
least one of the parties thereto from the fluctuations of interest
rates, exchange rates or forward rates applicable to such party's
assets, liabilities, or exchange transactions, including, but not
limited to, Dollar-denominated or cross-currency interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or
collar protection agreements, forward rate currency or interest rate
options, puts and warrants, and (b) any and all cancellations,
buybacks, reversals, terminations or assignments of any of the
foregoing.
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"Real Property Collateral": the real property of Borrower described in
Attachment 1 to the Disclosure Schedule and all other real property in
which Administrative Agent at any time holds a Security Interest for
the benefit of Lenders pursuant to a Mortgage.
"Regulation D", "Regulation G", and Regulation U": , respectively,
Regulation D issued by the FRB, Regulation G issued by the FRB, and
Regulation U issued by the FRB.
"Reportable Event": a reportable event as defined in Title IV of ERISA
or the regulations thereunder.
"Remaining Interest Period": is defined in Section 4.12.
"Required Lenders" is defined in Section 2.4.
"Responsible Officer": as to any Person that is not an individual,
partnership or trust, the Chairman of the Board of Directors, the
President, the chief executive officer, the chief operating officer,
the chief financial officer, the Treasurer, any Assistant to the
Treasurer, or any Vice President in charge of a principal business
unit; as to any partnership, any individual who is a general partner
thereof or any individual who has general management or administrative
authority over all or any principal unit of the partnership's business;
and as to any trust, any individual who is a trustee.
"Required Lenders" is defined in Section 2.4.
"Revolver Maturity Date": July 23, 2001.
"Revolving Advance" is defined in Section 3.1.1.
"Revolving Commitment" is defined in Section 3.1.1.
"Revolving Loan": on any date, the outstanding principal balance of all
Revolving Advances as of such date.
"Revolving Note" is defined in Section 3.1.1.
"Security Agreement": each security agreement covering Goods,
Equipment, Accounts, Inventory, Instruments, Documents, Chattel Paper,
General Intangibles or other personal property or the proceeds of the
any of the foregoing that Borrower executes and delivers to
Administrative Agent for the benefit of Lenders, either on or after the
Execution Date, and all amendments, restatements, and replacements
thereof.
"Security Documents": all of the documents described in Section 8, and
any similar documents that Borrower or any other Person executes and
delivers to Administrative Agent for the benefit of Lenders after the
Execution Date to secure part or all of the Loan Obligations, and all
amendments, restatements, and replacements thereof
"Security Interest": as to any item of tangible or intangible property,
any interest therein or right with respect thereto that secures an
Obligation or Indirect Obligation, whether such interest or right is
created under a Contract, or by operation of law or statute (such as
but not limited to a statutory lien for work or materials), or as a
result of a judgment, or which arises under any form of preferential or
title retention agreement or arrangement (including a conditional sale
agreement or a lease) that has substantially the same economic effect
as any of the foregoing.
"Sencorp" is defined on page 1.
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"Settlement Date" is defined in Section 6.1.2.1.
"Solvent": as to any Person, such Person not being "insolvent" within
the meaning of Section 101(32) of the Bankruptcy Code, Section 2 of the
Uniform Fraudulent Transfer Act (the "UFTA") or Section 428.014 of the
Missouri Revised Statutes, (ii) such Person not having unreasonably
small capital, within the meaning of Section 548 of the Bankruptcy
Code, Section 4 of the UFTA or Section 428.024 of the Missouri Revised
Statutes, and (iii) such Person not being unable to pay such Person's
debts as they become due within the meaning of Section 548 of the
Bankruptcy Code, Section 4 of the UFTA or Section 428.024 of the
Missouri Revised Statutes.
"Standby Letter of Credit": a standby letter of credit issued by Letter
of Credit Issuer pursuant to the Letter of Credit Commitment in Section
3.9.
"Stock Pledge Agreement": any stock pledge agreement that Borrower
executes and delivers to Administrative Agent for the benefit of
Lenders, either on or after the Execution Date, as provided herein, and
all amendments, restatements, and replacements thereof.
"Subrogation Agreement": that certain Subrogation and Assignment
Agreement dated as of November 22, 1995 St. Louis, Missouri time
(November 23, 1995 London, England time) between Administrative Agent,
on behalf of the Prior Lenders and Dresdner UK.
"Subsidiary": as to any Person, a corporation with respect to which
more than 20% of the outstanding shares of stock of each class having
ordinary voting power (other than stock having such power only by
reason of the happening of a contingency) is at the time owned by such
Person or by one or more Subsidiaries of such Person.
"Surviving Company": as applicable, either (i) the Person that will own
the assets to be acquired from a Target Company in a Permitted
Acquisition upon the consummation thereof, (ii) the survivor of the
merger of an Acquiring Company with the Target Company in a Permitted
Acquisition upon the consummation thereof, or (iii) the Target Company
whose stock will be acquired by another Person in a Permitted
Acquisition upon the consummation thereof.
"Swiftpack": Swiftpack Automation, Limited, a United Kingdom
corporation.
"Swiftpack Letter of Credit": that certain letter of credit dated
November 22, 1995 issued by Boatmen's for the account of DT Industries,
Inc. and for the benefit of Dresdner U.K., as amended by that certain
Amendment No. 001 dated November 27, 1995, changing the date of the
letter of credit to November 23, 1995.
"Swiftpack Letter of Credit Available Amount": as of the date of
calculation, the Dollar equivalent of pound sterling 13,500,000,
calculated using the Base Conversion Rate, as such amount may have been
reduced pursuant to the terms of the Swiftpack Letter of Credit.
"Swiftpack Option": an option owned by DTUK to acquire the remaining 5%
of the stock of Swiftpack.
"Swingline Advance" is defined in Section 3.2.1.
"Swingline Commitment" is defined in Section 3.2.1.
"Swingline Loan" is defined in Section 3.2.1.
"Swingline Note" is defined in Section 3.2.1.
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"Target Company": the Person whose assets or stock will be acquired in
a Permitted Acquisition upon the consummation thereof, or if
applicable, with which an Acquiring Company will merge in a Permitted
Acquisition upon the consummation thereof.
"Tax": as to any Person, any tax, assessment, fee, or other charge
levied by a Governmental Authority on the income or property of such
Person, including any interest or penalties thereon, and which is
payable by such Person.
"Term Advance" is defined in Section 3.3.
"Term Commitment" is defined in Section 3.3.
"Term Loan" is defined in Section 3.3.
"Term Loan Equity Prepayment": the prepayment of principal on the
Aggregate Term Loan with the net proceeds (which shall be at least
$50,000,000) of the issuance by Borrower of equity securities.
"Term Maturity Date": July 23, 2001.
"Term Note" is defined in Section 3.3.
"this Agreement": this document (including every document that is
stated herein to be an appendix, exhibit or schedule hereto, whether or
not physically attached to this document), as amended from time to time.
"Total Liabilities" is defined in Section 17.1.
"Total Assets" is defined in Section 17.1.
"UCC": the Uniform Commercial Code as in effect from time to time in
the State of Missouri or such other similar statute as in effect from
time to time in Missouri or any other appropriate jurisdiction.
"United States": when used in a geographical sense, all the states of
the United States of America and the District of Columbia; and when
used in a legal jurisdictional sense, the government of the country
that is the United States of America.
"Unused Aggregate Commitment" is defined in Section 5.2.
"Upfront Fee" is defined in Section 5.1.
"Welfare Benefit Plan": any plan described by Section 3(1) of ERISA.
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NOTE
The following page contains a list of Exhibits and Schedules which have
been intentionally omitted by the Registrant pursuant to Item 601(b)(2) of
Regulation S-K.
A copy of any omitted Exhibit or Schedule will be provided to the
Securities and Exchange Commission upon request.
<PAGE>
EXHIBIT 3 LENDERS' COMMITMENTS AND PRORATA SHARES
EXHIBIT 3.1.1 FORM OF REVOLVING NOTES
EXHIBIT 3.2.1 FORM OF SWINGLINE NOTE
EXHIBIT 3.3 FORM OF TERM NOTES
EXHIBIT 3.4 FORM OF CANADIAN TERM NOTES
EXHIBIT 3.5 FORM OF POST-OFFERING ACQUISITION NOTES
EXHIBIT 3.8 FORM OF GENERAL ACQUISITION NOTES
EXHIBIT 10.1.1 DOCUMENT AND REQUIREMENTS LIST
EXHIBIT 13 DISCLOSURE SCHEDULE OF BORROWER
EXHIBIT 15.14 FORM OF COMPLIANCE CERTIFICATE
EXHIBIT 15.15.1 BORROWING BASE CERTIFICATE
EXHIBIT 20.4.1 FORM OF ASSIGNMENT AND ACCEPTANCE
NEWS DT Industries, Inc.
BULLETIN 1949 E. Sunshine
Suite 2-300
FROM: Springfield, MO 65804
FRB Nasdaq: DTII
The Financial Relations Board, Inc.
For further information:
AT THE COMPANY: AT THE FINANCIAL RELATIONS BOARD:
Bruce Erdel Karl Plath Bob Lyons
Vice President, Finance General Information Analyst Contact
417/890-0102 312/640-6738 312/640-6790
FOR IMMEDIATE RELEASE
DT INDUSTRIES ANNOUNCES ACQUISITION OF MID-WEST AUTOMATION
SPRINGFIELD, MO, July 22,1996--DT Industries Inc. (Nasdaq: DTII) today announced
it has purchased the outstanding stock of Mid-West Automation Enterprises Inc.,
a Chicago-area designer and manufacturer of integrated precision assembly
systems, for approximately $77 million, net of cash acquired. The acquisition
was a cash transaction funded through a newly restructured $200 million credit
facility. The acquisition of Mid-West, is expected to be immediately accretive
to DT Industries. Excluding certain non-recurring charges, Mid-West is expected
to earn approximately $18 million in operating profit on sales exceeding $85
million for the year ended May 26, 1996. Backlog at June 30, 1996, was
approximately $70 million.
"The addition of Mid-West Automation Systems, in addition to being highly
accretive, would be a strong strategic fit with our DT Automation Group," said
Stephen J. Gore, president and chief executive officer. "In keeping with our
strategic acquisition criteria, Mid-West is an acknowledged leader in the design
and manufacturing of integrated precision assembly systems, has a strong
management team in place, possesses exceptional design-engineering expertise and
provides strong cross-selling opportunities for our other divisions," Gore
noted.
"The Mid-West acquisition is another step in our strategy of providing
one-stop assembly automaton solutions and further enhances our ability to
attract new, high-volume customers," Gore said. "Mid-West's partnership approach
to systems development fits well with our philosophy of providing our customers
with the best assembly system technology available in the industry."
Mid-West Automation, located in Buffalo Grove, IL., operates out of a
260,000-square-foot, state-of-the-art facility employing 450 people,
including more than 100 concept, mechanical and electrical engineers. The
company was founded in 1965.
DT Industries Inc. is a leading designer, manufacturer and integrator of
automated production equipment and systems used to manufacture or package
industrial and consumer products. The company also produces precision metal
components for a broad range of industrial applications and wear parts for the
knitting industry.
-30-
For further information an DT Industries by fax, at no cost, dial
1-800-PRO-INFO and use ticker symbol "DTII"
