1
Exhibit 4.2
U.S. $140,000,000
CREDIT AGREEMENT,
dated as of September 29, 1997,
among
DAYTON SUPERIOR CORPORATION,
as the Borrower
and
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders.
ARRANGED BY
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION,
BT ALEX. ▇▇▇▇▇ INCORPORATED
AND
BANCAMERICA SECURITIES, INC.
2
TABLE OF CONTENTS
SECTION PAGE
------- ----
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms.....................................................................2
1.2. Use of Defined Terms.............................................................35
1.3. Cross-References.................................................................35
1.4. Accounting and Financial Determinations..........................................35
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
2.1. Commitments......................................................................36
2.1.1. Term Loan Commitment.............................................................36
2.1.2. Revolving Loan Commitment........................................................36
2.1.3. Letter of Credit Commitment......................................................36
2.1.4. Lenders Not Permitted or Required to Make Loans..................................37
2.1.5. Issuer Not Permitted or Required to Issue
Letters of Credit............................................................37
2.2. Reduction of Commitment Amounts..................................................37
2.2.1. Optional.........................................................................37
2.2.2. Mandatory........................................................................38
2.3. Borrowing Procedure..............................................................38
2.4. Continuation and Conversion Elections............................................39
2.5. Funding..........................................................................39
2.6. Issuance Procedures..............................................................39
2.6.1. Other Lenders' Participation.....................................................40
2.6.2. Disbursements; Conversion to Revolving Loans.....................................41
2.6.3. Reimbursement....................................................................41
2.6.4. Deemed Disbursements.............................................................42
2.6.5. Nature of Reimbursement Obligations..............................................42
2.7. Notes............................................................................43
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments; Application..........................................44
3.1.1. Repayments and Prepayments.......................................................44
3.1.2. Application......................................................................47
3.2. Interest Provisions..............................................................48
3.2.1. Rates............................................................................48
3.2.2. Post-Maturity Rates..............................................................48
3.2.3. Payment Dates....................................................................49
3.3. Fees.............................................................................49
3.3.1. Commitment Fee...................................................................49
3.3.2. Agents' and Arrangers' Fees......................................................50
3.3.3. Letter of Credit Face Amount Fee.................................................50
3.3.4. Letter of Credit Issuing Fee.....................................................50
-i-
3
SECTION PAGE
------- ----
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful.......................................................50
4.2. Deposits Unavailable.............................................................51
4.3. Increased LIBO Rate Loan Costs, etc..............................................51
4.4. Funding Losses...................................................................51
4.5. Increased Capital Costs..........................................................52
4.6. Taxes............................................................................52
4.7. Payments, Computations, etc......................................................54
4.8. Sharing of Payments..............................................................54
4.9. Setoff...........................................................................55
4.10. Replacement of Lenders...........................................................55
4.11. Use of Proceeds..................................................................56
ARTICLE V
CONDITIONS PRECEDENT
5.1. Initial Credit Extension.........................................................56
5.1.1. Resolutions, etc.................................................................56
5.1.2. Delivery of Notes................................................................57
5.1.3. Transaction Consummated..........................................................57
5.1.4. Payment of Outstanding Indebtedness, etc.........................................57
5.1.5. Subsidiary Guaranty..............................................................57
5.1.6. Closing Date Certificate.........................................................57
5.1.7. Transaction Documents, etc.......................................................58
5.1.8. Pledge Agreements................................................................58
5.1.9. Security Agreements..............................................................58
5.1.10. Financial Information, etc.......................................................59
5.1.11. Solvency, etc....................................................................60
5.1.12. Litigation.......................................................................60
5.1.13. Material Adverse Effect..........................................................60
5.1.14. Reliance Letters.................................................................60
5.1.15. Insurance........................................................................61
5.1.16. Opinions of Counsel..............................................................61
5.1.17. Closing Fees, Expenses, etc......................................................61
5.2. All Credit Extensions............................................................61
5.2.1. Compliance with Warranties, No Default, etc......................................61
5.2.2. Credit Extension Request.........................................................62
5.2.3. Satisfactory Legal Form..........................................................62
-ii-
4
SECTION PAGE
------- ----
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc................................................................63
6.2. Due Authorization, Non-Contravention, etc........................................63
6.3. Government Approval, Regulation, etc.............................................63
6.4. Validity, etc....................................................................64
6.5. Financial Information............................................................64
6.6. No Material Adverse Effect.......................................................64
6.7. Litigation, Labor Controversies, etc.............................................64
6.8. Subsidiaries.....................................................................64
6.9. Ownership of Properties..........................................................64
6.10. Taxes............................................................................65
6.11. Pension and Welfare Plans........................................................65
6.12. Environmental Warranties.........................................................65
6.13. Regulations G, U and X...........................................................66
6.14. Accuracy of Information..........................................................66
6.15. Solvency.........................................................................67
ARTICLE VII
COVENANTS
7.1. Affirmative Covenants............................................................67
7.1.1. Financial Information, Reports, Notices, etc.....................................67
7.1.2. Compliance with Laws, etc........................................................69
7.1.3. Maintenance of Properties........................................................69
7.1.4. Insurance........................................................................70
7.1.5. Books and Records................................................................70
7.1.6. Environmental Covenant...........................................................70
7.1.7. Future Subsidiaries..............................................................71
7.1.8. Future Leased Property and Future Acquisitions of
Real Property; Future Acquisition of
Other Property...............................................................72
7.1.9. Hedging Obligations..............................................................73
7.1.10. Use of Proceeds, etc.............................................................73
7.1.11. Mortgage.........................................................................73
7.1.12. Patent and Trademark
Security Agreements..........................................................74
7.1.13. Local Counsel Opinions...........................................................74
7.1.14. Environmental Reports............................................................74
7.2. Negative Covenants Applicable to Revolving Loans.................................75
7.2.1. Business Activities..............................................................75
7.2.2. Indebtedness.....................................................................75
7.2.3. Liens............................................................................76
7.2.4. Financial Covenants..............................................................77
7.2.5. Investments......................................................................78
7.2.6. Restricted Distributions, etc....................................................79
7.2.7. Capital Expenditures, etc........................................................80
7.2.8. Rental Obligations...............................................................80
7.2.9. Consolidation, Merger, etc.......................................................80
-iii-
5
SECTION PAGE
------- ----
7.2.10. Asset Dispositions, etc..........................................................81
7.2.11. Modification of Certain Agreements...............................................81
7.2.12. Transactions with Affiliates.....................................................81
7.2.13. Negative Pledges, Restrictive Agreements, etc....................................82
7.2.14. Sale and Leaseback...............................................................82
7.3. Negative Covenants Applicable to Term Loans......................................83
7.3.1. Business Activities..............................................................83
7.3.2. Indebtedness.....................................................................83
7.3.3. Liens............................................................................84
7.3.4. Restricted Payments, etc.........................................................85
7.3.5. Consolidation, Merger, etc.......................................................88
7.3.6. Asset Dispositions, etc..........................................................88
7.3.7. Modification of Certain Agreements...............................................89
7.3.8. Transactions with Affiliates.....................................................89
7.3.9. Negative Pledges, Restrictive Agreements, etc....................................89
7.3.10. Sale and Leaseback...............................................................90
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Listing of Events of Default.....................................................90
8.1.1. Non-Payment of Obligations.......................................................90
8.1.2. Breach of Warranty...............................................................90
8.1.3. Non-Performance of Certain Covenants and Obligations.............................90
8.1.4. Non-Performance of Other Covenants and Obligations...............................91
8.1.5. Default on Other Indebtedness....................................................91
8.1.6. Judgments........................................................................91
8.1.7. Pension Plans....................................................................91
8.1.8. Control of the Borrower..........................................................92
8.1.9. Bankruptcy, Insolvency, etc......................................................92
8.1.10. Impairment of Security, etc......................................................93
8.2. Action if Bankruptcy.............................................................93
8.3. Action if Other Event of Default.................................................93
8.4. Construction.....................................................................94
ARTICAL IX
THE AGENTS
9.1. Actions..........................................................................94
9.2. Funding Reliance, etc............................................................95
9.3. Exculpation......................................................................95
9.4. Successor........................................................................96
9.5. Loans or Letters of Credit Issued by Bank One....................................96
9.6. Credit Decisions.................................................................96
9.7. Copies, etc......................................................................97
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Waivers, Amendments, etc.........................................................97
10.2. Notices..........................................................................99
10.3. Payment of Costs and Expenses....................................................99
-iv-
6
SECTION PAGE
------- ----
10.4. Indemnification.................................................................100
10.5. Survival........................................................................102
10.6. Severability....................................................................102
10.7. Headings........................................................................102
10.8. Execution in Counterparts, Effectiveness, etc...................................102
10.9. Governing Law; Entire Agreement.................................................102
10.10. Successors and Assigns..........................................................102
10.11. Sale and Transfer of Loans and Notes; Participations in Loans and Notes.........103
10.11.1. Assignments.....................................................................103
10.11.2. Participations..................................................................104
10.12. Other Transactions..............................................................105
10.13. Forum Selection and Consent to Jurisdiction.....................................105
10.14. Waiver of Jury Trial............................................................106
10.15. Confidentiality.................................................................106
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages and Administrative Information
EXHIBIT A - Form of Revolving Note
EXHIBIT B - Form of Term Note
EXHIBIT C - Form of Borrowing Request
EXHIBIT D - Form of Issuance Request
EXHIBIT E - Form of Continuation/Conversion Notice
EXHIBIT F - Form of Borrowing Base Certificate
EXHIBIT G - Form of Closing Date Certificate
EXHIBIT H - Form of Compliance Certificate
EXHIBIT I - Form of Subsidiary Guaranty
EXHIBIT J-1 - Form of Borrower Pledge Agreement
EXHIBIT J-2 - Form of Subsidiary Pledge Agreement
EXHIBIT K-1 - Form of Borrower Security Agreement
EXHIBIT K-2 - Form of Subsidiary Security Agreement
EXHIBIT L - Form of Solvency Certificate
EXHIBIT M-1 - Form of Opinion of Counsel to the Obligors
EXHIBIT M-2 - Form of Opinion of Local Counsel to the Obligors
EXHIBIT N - Form of Lender Assignment Agreement||
-v-
7
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of September 29, 1997, among DAYTON
SUPERIOR CORPORATION, an Ohio corporation (the "BORROWER"), the various
financial institutions as are or may become parties hereto (collectively, the
"LENDERS"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as syndication agent (the
"SYNDICATION AGENT") for the Lenders, BANKERS TRUST COMPANY ("BTCo."), as
administrative agent (the "ADMINISTRATIVE AGENT") for the Lenders, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BANK OF AMERICA"), as
documentation agent (the "DOCUMENTATION AGENT") for the Lenders and BANK ONE,
N.A. ("BANK ONE"), as facility agent (the "FACILITY AGENT") for the Lenders.
W I T N E S S E T H:
WHEREAS, the Borrower is engaged directly and through its various
Subsidiaries in the business of manufacturing and distributing specialized metal
accessories used in concrete and masonry construction, and chemicals incidental
thereto; and
WHEREAS, ▇▇▇▇▇▇ Corporation ("▇▇▇▇▇▇") is engaged directly and through
its Subsidiaries in the business of manufacturing, selling and renting concrete
forms, equipment and systems and concrete accessories and hardware and chemicals
incidental thereto; and
WHEREAS, pursuant to an Agreement, dated as of May 9, 1997 (as so
originally executed and delivered, the "PURCHASE AGREEMENT"), among the
Borrower, ▇▇▇▇▇▇ and the stockholders of ▇▇▇▇▇▇ named therein (the
"Stockholders"), the Stockholders have agreed to sell, transfer and deliver to
the Borrower, and the Borrower has agreed to acquire (the "ACQUISITION"), all of
the issued and outstanding shares of Capital Stock of ▇▇▇▇▇▇, for an aggregate
cash consideration (exclusive of the Seller Note and assumed indebtedness of
▇▇▇▇▇▇) of approximately $36,000,000; and
WHEREAS, in connection with the Acquisition, the Borrower will
refinance certain existing indebtedness of approximately $89,000,000 in
aggregate principal amount of the Borrower and ▇▇▇▇▇▇ (the "REFINANCING"); and
WHEREAS, the aggregate amount necessary to consummate the Transaction
(as defined below), and to pay related reasonable fees and expenses, shall not
exceed $130,000,000; and
WHEREAS, in order to consummate the Acquisition and the Refinancing
(the Acquisition, the Refinancing, the initial Credit Extension and any and all
transactions related thereto are collectively referred to as the "TRANSACTION"),
and to provide for the ongoing working capital and general corporate needs of
8
the Borrower and its Subsidiaries (after giving effect to the Transaction), the
Borrower desires to obtain from the Lenders (a) a Term Loan Commitment; (b) a
Revolving Loan Commitment (to include availability for Revolving Loans and
Letters of Credit); and (c) a Letter of Credit Commitment (which shall be a
sub-facility of the Revolving Loan Commitment); and
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including ARTICLE V), to extend such
Commitments, make such Loans to the Borrower and issue (or participate in)
Letters of Credit; and
WHEREAS, the proceeds of the Credit Extensions will be used for the
purposes set forth in SECTION 7.1.10;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
"ACCOUNT" means any account (as that term is defined in Section 9-106
of the UCC) of the Borrower or any of its wholly-owned U.S. Subsidiaries arising
from the sale or lease of goods or the rendering of services.
"ACCOUNT DEBTOR" is defined in CLAUSE (B) of the definition of
"Eligible Accounts".
"ACQUISITION" is defined in the THIRD RECITAL.
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE.
"AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (i)
to vote 10% or more of the securities (on a fully diluted basis) having ordinary
voting power for the election of directors or managing general partners; or (ii)
to direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
2
9
"AGENTS" means, collectively, DLJ, BT Co., Bank of America and Bank
One, each in its capacity as the Syndication Agent, the Administrative Agent,
the Documentation Agent and the Facility Agent, respectively, hereunder and
under the other Loan Documents.
"AGREEMENT" means, on any date, this Credit Agreement as originally in
effect on the Effective Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on such
date.
"ALTERNATE BASE RATE" means, on any date and with respect to all Base
Rate Loans, a fluctuating rate of interest per annum equal to the higher of (i)
the rate of interest in effect for such day as publicly announced or established
from time to time by the Facility Agent as its prime rate, and (ii) the Federal
Funds Rate most recently determined by the Facility Agent plus 1/2 of 1%.
The Alternate Base Rate is not necessarily intended to be the lowest rate of
interest determined by the Facility Agent in connection with extensions of
credit. Changes in the rate of interest on that portion of any Loans maintained
as Base Rate Loans will take effect simultaneously with each change in the
Alternate Base Rate. The Facility Agent will give notice promptly to the
Borrower and the Lenders of changes in the Alternate Base Rate.
"ANNUALIZED" means (i) with respect to the end of the first full Fiscal
Quarter of the Borrower to occur after the Closing Date, the applicable amount
for such Fiscal Quarter multiplied by four, (ii) with respect to the second
Fiscal Quarter of the Borrower to occur after the Closing Date, the sum of the
applicable amount for such Fiscal Quarter and the immediately preceding Fiscal
Quarter multiplied by two, and (iii) with respect to the third Fiscal Quarter of
the Borrower to occur after the Closing Date, the sum of the applicable amount
for such Fiscal Quarter and the immediately preceding two Fiscal Quarters
multiplied by 1.3333.
"APPLICABLE COMMITMENT FEE" means, (i) at all times from the Closing
Date through (but excluding) the date upon which the Compliance Certificate for
the first full Fiscal Quarter following the Closing Date is delivered or
required to be delivered by the Borrower to the Facility Agent pursuant to
CLAUSE (C) of SECTION 7.1.1, a fee which shall accrue on the unused portion of
the Revolving Loan Commitment Amount at a rate of 1/4 of 1% per annum, and (ii)
for each day thereafter, a fee which shall accrue on the unused portion of the
Revolving Loan Commitment Amount at a rate per annum determined by reference to
the Leverage Ratio for the Fiscal Quarter last ended and the applicable
percentage per annum set forth below under the column entitled "Applicable
Commitment Fee":
3
10
Applicable
Leverage Ratio Commitment Fee
-------------- --------------
less than or 0.400%
equal to 4.25:1 but
greater than
4.00:1
less than or equal to 0.300%
4.00:1 but
greater than
3.50:1
less than or equal to 0.250%
3.50:1 but
greater than
3.00:1
less than or equal to 0.175%
3.00:1 but
greater than
2.50:1
less than or equal to 0.150%
2.50:1 but
greater than
2.00:1
less than or equal to 0.125%
2.00:1
The Leverage Ratio used to compute the Applicable Commitment Fee shall be the
Leverage Ratio set forth in the Compliance Certificate most recently delivered
by the Borrower to the Facility Agent pursuant to CLAUSE (c) of SECTION 7.1.1.
Changes in the Applicable Commitment Fee resulting from a change in the Leverage
Ratio shall become effective upon delivery by the Borrower to the Facility Agent
of a new Compliance Certificate pursuant to CLAUSE (c) of SECTION 7.1.1. If the
Borrower shall fail to deliver a Compliance Certificate within the number of
days required pursuant to CLAUSE (c) of SECTION 7.1.1 (without giving effect to
any grace period), the Applicable Commitment Fee from and including the first
day after the date on which such Compliance Certificate was required to be
delivered to, but not including the date the Borrower delivers to, the Facility
Agent an appropriately completed Compliance Certificate shall conclusively equal
the highest Applicable Commitment Fee set forth above.
4
11
"APPLICABLE MARGIN" means at all times during the applicable periods
set forth below,
(a) with respect to the unpaid principal amount of each Term
Loan maintained as (i) a Base Rate Loan, 1.75% per annum and (ii) a
LIBO Rate Loan, 2.75% per annum;
(b) with respect to the unpaid principal amount of each
Revolving Loan maintained as (i) a Base Rate Loan, (x) from the Closing
Date through (but excluding) the date upon which the Compliance
Certificate for the first full Fiscal Quarter following the Closing
Date is delivered or required to be delivered by the Borrower to the
Facility Agent pursuant to CLAUSE (c) of SECTION 7.1.1, 0.75% per
annum, and (y) thereafter, by reference to the Leverage Ratio and at
the applicable percentage per annum set forth below under the column
entitled "Applicable Margin for Base Rate Loans", and (ii) a LIBO Rate
Loan, (x) from the Closing Date through (but excluding) the date upon
which the Compliance Certificate for the first full Fiscal Quarter
following the Closing Date is delivered or required to be delivered by
the Borrower to the Facility Agent pursuant to CLAUSE (c) of SECTION
7.1.1, 1.75% per annum, and (y) thereafter, by reference to the
Leverage Ratio and at the applicable percentage per annum set forth
below under the column entitled "Applicable Margin for LIBO Rate
Loans":
Applicable Margin For Revolving Loans
-------------------------------------
Applicable Applicable
Margin For Base Margin For LIBO
Leverage Ratio Rate Loans Rate Loans
-------------- ---------- ----------
Less than or equal to 1.00% 2.00%
4.25:1 but
greater than
4.00:1
0.75% 1.75%
less than or equal to
4.00:1 but
greater than
3.50:1 0.50% 1.50%
less than or equal to
3.50:1 but
greater than
3.00:1
5
12
less than or equal to
3.00:1 but
greater than
2.50:1 0.25% 1.25%
less than or equal to
2.50:1 but
greater than
2.00:1 0.00% 1.00%
less than or equal to
2.00:1 0.00% 0.75%
||The Leverage Ratio used to compute the Applicable Margin for Revolving Loans
shall be the Leverage Ratio set forth in the Compliance Certificate most
recently delivered by the Borrower to the Facility Agent pursuant to CLAUSE (c)
of SECTION 7.1.1. Changes in the Applicable Margin for Revolving Loans resulting
from a change in the Leverage Ratio shall become effective upon delivery by the
Borrower to the Facility Agent of a new Compliance Certificate pursuant to
CLAUSE (c) of SECTION 7.1.1. If the Borrower shall fail to deliver a Compliance
Certificate within the number of days required pursuant to CLAUSE (c) of SECTION
7.1.1 (without giving effect to any grace period), the Applicable Margin for
Revolving Loans from and including the first day after the date on which such
Compliance Certificate was required to be delivered to, but not including the
date the Borrower delivers to, the Facility Agent an appropriately completed
Compliance Certificate shall conclusively equal the highest Applicable Margin
for Revolving Loans set forth above.
"ARRANGERS" means, collectively, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation, BT Alex. ▇▇▇▇▇ Incorporated and BancAmerica Securities,
Inc.
"ASSIGNEE LENDER" is defined in SECTION 10.11.11.
"AUTHORIZED OFFICER" means, relative to any Obligor, its president,
chief financial officer, chief executive officer, controller, treasurer or vice
president - finance, each of whose signatures and incumbency shall have been
certified to the Agents and the Lenders pursuant to SECTION 5.1.1.
"BANK OF AMERICA" is defined in the PREAMBLE.
"BANK ONE" is defined in the PREAMBLE.
"BASE RATE LOAN" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
6
13
"BORROWER" is defined in the PREAMBLE.
"BORROWER PLEDGE AGREEMENT" means the Pledge Agreement executed and
delivered by an Authorized Officer of the Borrower pursuant to CLAUSE (a) of
SECTION 5.1.8, substantially in the form of EXHIBIT J-1 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"BORROWER SECURITY AGREEMENT" means the Security Agreement executed and
delivered by an Authorized Officer of the Borrower pursuant to SECTION 5.1.9,
substantially in the form of EXHIBIT K-1 hereto, as amended, supplemented,
amended and restated or otherwise modified from time to time.
"BORROWING" means Loans of the same type and, in the case of LIBO Rate
Loans, having the same Interest Period made by the relevant Lenders on the same
Business Day and pursuant to the same Borrowing Request in accordance with
SECTION 2.1.
"BORROWING BASE AMOUNT" means, at any time, the Net Asset Value of all
Eligible Accounts and Eligible Inventory at such time as determined in
accordance with the definition of "Net Asset Value" and as certified by the
Borrower to the Lenders in the most recently delivered Borrowing Base
Certificate, including the Borrowing Base Certificate delivered on the Closing
Date pursuant to CLAUSE (c) of SECTION 5.1.10.
"BORROWING BASE CERTIFICATE" means a certificate duly completed and
executed by an Authorized Officer of the Borrower, substantially in the form of
EXHIBIT F hereto.
"BORROWING REQUEST" means a loan request and certificate duly executed
by an Authorized Officer of the Borrower, substantially in the form of EXHIBIT C
hereto.
"BTCO." is defined in the PREAMBLE.
"BUSINESS DAY" means
(a) any day which is neither a Saturday or Sunday nor a legal
holiday on which banks are authorized or required to be closed in New
York, New York or Dayton, Ohio; and
(b) relative to Borrowings of, Interest Periods with respect
to, payments of principal and interest in respect of, and conversions
of Base Rate Loans into, LIBO Rate Loans, any day on which dealings in
Dollars are carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, with respect to any Person for any
period, the sum (without duplication) of
7
14
(a) the aggregate amount of all expenditures of such Person
and its Subsidiaries for fixed or capital assets (including for the
purchase of Rental Equipment) made during such period which, in
accordance with GAAP, would be classified as capital expenditures; and
(b) the aggregate amount of all Capitalized Lease Liabilities
incurred during such period.
"CAPITAL STOCK" means, with respect to any Person, (i) any and all
shares, interests, participations or other equivalents of or interests in
(however designated) corporate or capital stock, including, without limitation,
shares of preferred or preference stock of such Person, (ii) all partnership
interests (whether general or limited) in such Person, (iii) all member
interests or other limited liability company interests in such Person, and (iv)
all other equity or ownership interests in such Person of any other type.
"CAPITALIZED LEASE LIABILITIES" means with respect to any Person for
any applicable period, all monetary obligations of such Person and its
Subsidiaries determined on a consolidated basis under any leasing or similar
arrangement which, in accordance with GAAP, would be classified as capitalized
leases, and, for purposes of this Agreement and each other Loan Document, the
amount of such obligations shall be the capitalized amount thereof, determined
in accordance with GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such lease prior to the
first date upon which such lease may be terminated by the lessee without payment
of a penalty.
"CASH EQUIVALENT INVESTMENT" means, at any time:
(a) any evidence of Indebtedness, maturing not more than one
year after such time, issued or guaranteed by the United States
Government;
(b) commercial paper, maturing not more than nine months from
the date of issue, which is issued by
(i) a corporation (other than an Affiliate of any
Obligor) organized under the laws of any state of the United
States or of the District of Columbia and rated at least A-l
by S&P's or P-l by ▇▇▇▇▇'▇, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or bankers acceptance, maturing
not more than one year after such time, which is issued by either
8
15
(i) a commercial banking institution that (x) is a
member of the Federal Reserve System or is organized under the
laws of Canada and (y) has a combined capital and surplus and
undivided profits of not less than $500,000,000, or
(ii) any Lender; or
(d) any repurchase agreement entered into with any Lender (or
other commercial banking institution of the stature referred to in
CLAUSE (c)(i)) which
(i) is secured by a fully perfected security interest
in any obligation of the type described in any of CLAUSES (a)
through (c); and
(ii) has a market value at the time such repurchase
agreement is entered into of not less than 100% of the
repurchase obligation of such Lender (or other commercial
banking institution) thereunder.
"CASUALTY EVENT" means the damage, destruction, or condemnation, as the
case may be, of property of the Borrower or any of its Subsidiaries.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"CHANGE IN CONTROL" means
(a) the acquisition by any Person, or two or more Persons
acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 30% or more of the outstanding shares of
voting Capital Stock of the Borrower; or
(b) the failure of the Borrower to own, free and clear of all
Liens or other encumbrances, 100% of the outstanding shares of voting
Capital Stock of ▇▇▇▇▇▇ on a fully diluted basis; or
(c) the failure of the Borrower or ▇▇▇▇▇▇ to own, directly or
indirectly, free and clear of all Liens or other encumbrances, 100% of
the outstanding shares of voting Capital Stock of any Subsidiary
Guarantor on a fully diluted basis;
9
16
PROVIDED, HOWEVER, that any disposition by Ripplewood of shares of Capital Stock
of the Borrower owned by Ripplewood shall not constitute a "Change of Control".
"CLOSING DATE" means the date of the initial Credit Extension.
"CLOSING DATE CERTIFICATE" means a certificate of an Authorized Officer
of the Borrower substantially in the form of EXHIBIT G hereto, delivered
pursuant to SECTION 5.1.6.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COMMITMENT" means, as the context may require, a Lender's Letter of
Credit Commitment, Revolving Loan Commitment or Term Loan Commitment.
"COMMITMENT AMOUNT" means, as the context may require, the Letter of
Credit Commitment Amount, the Revolving Loan Commitment Amount or the Term Loan
Commitment Amount.
"COMMITMENT TERMINATION DATE" means, as the context may require, the
Revolving Loan Commitment Termination Date or the Term Loan Commitment
Termination Date.
"COMMITMENT TERMINATION EVENT" means
(a) the occurrence of any Default described in CLAUSES (a)
through (d) of SECTION 8.1.9 with respect to the Borrower or any
Subsidiary; or
(b) the occurrence and continuance of any other Event of
Default and either (i) the declaration of the Loans to be due and
payable pursuant to SECTION 8.3, or (ii) in the absence of such
declaration, the giving of notice by the Agent, acting at the direction
of the Required Lenders, to the Borrower that the Commitments have been
terminated.
"COMPLIANCE CERTIFICATE" means a certificate duly completed and
executed by an Authorized Officer of the Borrower, substantially in the form of
EXHIBIT H hereto.
"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement
by which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the course of collection), or guarantees the
payment of dividends or other distributions upon
10
17
the shares of any other Person. The amount of any Person's obligation under any
Contingent Liability shall (subject to any limitation set forth therein) be
deemed to be the outstanding principal amount (or maximum principal amount, if
larger) of the debt, obligation or other liability guaranteed thereby.
"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of EXHIBIT E hereto.
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under Section 414(b) or 414(c) of the
Code or Section 4001 of ERISA.
"CORE BUSINESS" means any business activity described in the FIRST
RECITAL and in the SECOND RECITAL and such business activities as may be
incidental or related thereto.
"CREDIT EXTENSION" means, as the context may require
(a) the making of any Loan by a Lender, or
(b) the issuance of any Letter of Credit, or the extension of
any Stated Expiry Date of any previously issued Letter of Credit, by
any Issuer.
"CREDIT EXTENSION REQUEST" means, as the context may require, any
Borrowing Request or Issuance Request.
"CURRENT ASSETS" means, on any date with respect to any Person, without
duplication, all assets (other than cash) which, in accordance with GAAP
consistently applied, would be included as current assets on a consolidated
balance sheet of such Person and its Subsidiaries at such date as current
assets.
"CURRENT LIABILITIES" means, on any date with respect to any Person,
without duplication, all amounts which, in accordance with GAAP (consistently
applied), would be included as current liabilities on a consolidated balance
sheet of such Person and its Subsidiaries at such date, excluding current
maturities of Indebtedness.
"DEBT" means the outstanding principal amount of all Indebtedness of
the Borrower and its Subsidiaries of the nature referred to in CLAUSES (a), (b),
and (c) of the definition of "INDEBTEDNESS" plus (without duplication) the
aggregate amount of all Contingent Liabilities to the extent covering or
supporting the principal amount of any such Indebtedness.
11
18
"DEFAULT" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would constitute an Event of
Default.
"DISBURSEMENT" is defined in SECTION 2.6.2.
"DISBURSEMENT DATE" is defined in SECTION 2.6.2.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as it may be amended, supplemented or otherwise modified from time
to time by the Borrower with the written consent of the Facility Agent and the
Required Lenders.
"DISPOSITION" means any sale, transfer or other disposition of any
assets of the Borrower or any of its Subsidiaries (other than as permitted
pursuant to CLAUSE (a) of SECTION 7.2.10) and CLAUSE (a) of SECTION 7.3.6.
"DLJ" is defined in the PREAMBLE.
"DOCUMENTATION AGENT" is defined in the PREAMBLE.
"DOLLAR" and the sign "$" mean lawful money of the United States.
"DOMESTIC OFFICE" means, relative to any Lender, the office of such
Lender designated as such as set forth opposite its name on SCHEDULE II hereto
under the applicable column heading or as set forth in the Lender Assignment
Agreement pursuant to which such Lender became a Lender hereunder or such other
office of a Lender (or any successor or assign of such Lender) within the United
States as may be designated from time to time by notice from such Lender, as the
case may be, to each other Person party hereto.
"EBITDA" means, with respect to the Borrower and its Subsidiaries for
any applicable period, the sum (without duplication), determined on a
consolidated basis, of
(a) Net Income;
plus
----
(b) the amount deducted in determining Net Income representing
non-cash charges, including depreciation and amortization;
plus
----
(c) the amount deducted in determining Net Income representing
income tax expense (whether paid or deferred);
12
19
plus
----
(d) the amount deducted in determining Net Income representing
Interest Expense;
minus
-----
(e) an amount equal to the amount of all non-cash credits
included in determining Net Income.
"EFFECTIVE DATE" means the date this Agreement becomes effective
pursuant to SECTION 10.8.
"ELIGIBLE ACCOUNT" means, with respect to the Borrower and any of its
wholly-owned U.S. Subsidiaries which has executed and delivered the Subsidiary
Guaranty and the Subsidiary Security Agreement, at the time of any determination
thereof, any Account as to which each of the following requirements has been
fulfilled to the reasonable satisfaction of the Agents:
(a) the Borrower or such Subsidiary owns such Account free and
clear of all Liens other than any Lien in favor of the Facility Agent
and the Lenders granted pursuant to or in connection with this
Agreement or another Loan Document (and the Facility Agent shall have a
first priority perfected Lien on such Account);
(b) such Account is a legal, valid, binding and enforceable
obligation of the Person obligated under such Account (the "ACCOUNT
DEBTOR");
(c) such Account is not subject to any BONA FIDE dispute,
setoff, counterclaim or other claim (or right to assert any such setoff
right, counterclaim or other claim) or defense on the part of the
Account Debtor or any other Person denying liability under such
Account; PROVIDED, HOWEVER, that such Account shall constitute an
Eligible Account to the extent it is not subject to any such dispute,
setoff, counterclaim or other claim or defense;
(d) the Borrower or such Subsidiary has the full and
unqualified right to assign and ▇▇▇▇▇ ▇ ▇▇▇▇ in such Account to the
Facility Agent, for its benefit and that of the Lenders, as security
for the Obligations;
(e) such Account is evidenced by an invoice rendered to the
Account Debtor (which shall include computer records) or is reflected
by computer records maintained by the Borrower or such Subsidiary
evidencing such Account and is not evidenced by any instrument or
chattel paper (as the terms "instrument" and "chattel paper" are
defined in Section 9-105 of the UCC), unless such instrument or chattel
paper has been delivered to the Facility Agent;
13
20
(f) such Account arose from the sale of goods, rentals or
services by the Borrower or such Subsidiary in the ordinary course of
the Borrower's or such Subsidiary's business, and such goods or
services have been shipped or delivered (in the case of goods) or
rendered in full (in the case of services) to the Account Debtor for
such Account;
(g) with respect to such Account, no Account Debtor is (i) an
Affiliate of the Borrower or any of its Subsidiaries, or (ii) the
subject of any reorganization, bankruptcy, receivership, custodianship,
insolvency or other condition analogous with respect to such Account
Debtor to those described in CLAUSES (a) through (d) of SECTION 8.1.9;
(h) such Account is not outstanding more than 90 days from the
date of invoice giving rise to such Account;
(i) such Account is not an Account owing by an Account Debtor
having, at the time of any determination of Eligible Accounts, in
excess of 25% of the aggregate outstanding amount of all Accounts of
such Account Debtor (other than any Accounts which are the subject of
BONA FIDE disputes between such Account Debtor and the Borrower or such
Subsidiary, as the case may be) outstanding more than 90 days past the
date of invoice giving rise to such Account;
(j) with respect to the Account Debtor under such Account,
neither the Borrower nor any such Subsidiary is indebted to such
Account Debtor, unless the Borrower or such Subsidiary and such Account
Debtor have entered into an agreement whereby the Account Debtor is
prohibited from exercising any right of setoff with respect to the
Accounts of the Borrower or such Subsidiary; PROVIDED, that in any
event, if such an agreement prohibiting setoff rights is not delivered
by the Account Debtor, then only the amount that the Borrower or such
Subsidiary is indebted to such Account Debtor shall be excluded as an
Eligible Account pursuant to this clause;
(k) such Account arises from a sale to an Account Debtor
located within the United States or Canada, unless the Account Debtor's
obligations (or that portion of such obligations which is acceptable to
the Agents) with respect to a sale to an Account Debtor not located
within the United States or Canada are secured by a letter of credit,
guaranty or eligible bankers' acceptance having terms, and from such
issuers and confirmation banks, as are acceptable to the Agents; and
(l) such Account shall not have been billed on a date
materially later than it would been billed in accordance with the
Borrower's or such Subsidiary's past practice.
14
21
"ELIGIBLE INVENTORY" means, with respect to the Borrower and any of its
wholly-owned U.S. Subsidiaries which has executed and delivered the Subsidiary
Guaranty and the Subsidiary Security Agreement, at the time of any determination
thereof, any Inventory (other than Rental Equipment, to the extent it
constitutes Inventory of the Borrower or any such Subsidiary) arising in the
ordinary course of business and as to which each of the following requirements
has been fulfilled to the reasonable satisfaction of the Agents:
(a) such Inventory is located in the United States;
(b) the Borrower or its wholly-owned U.S. Subsidiary owning
such Inventory, as the case may be, has full and unqualified right to
assign and ▇▇▇▇▇ ▇ ▇▇▇▇ in such Inventory to the Facility Agent, for
its benefit and that of the Lenders, as security for the Obligations;
(c) the Borrower or one of its wholly-owned U.S. Subsidiaries
owns such Inventory free and clear of all Liens in favor of any Person
other than any Lien in favor of the Facility Agent and the Lenders
granted pursuant to or in connection with this Agreement or another
Loan Document; PROVIDED, HOWEVER, that Inventory owned by the Borrower
or such Subsidiary shall continue to constitute "Eligible Inventory"
notwithstanding the Borrower's or such Subsidiary's inability to
satisfy the requirements of this CLAUSE (c) due solely to the failure
of the Borrower or such Subsidiary to obtain a Waiver from the landlord
of the premises in which such Inventory is held, but only to the extent
that the aggregate value of such Inventory does not exceed $2,000,000;
and
(d) none of such Inventory is obsolete, unsalable, damaged or
otherwise unfit for sale or consumption or further processing.
"ENVIRONMENTAL LAWS" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines (including
consent decrees and administrative orders) relating to public health and safety
and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, together with the
regulations thereunder, in each case as in effect from time to time.
References to sections of ERISA also refer to any successor sections.
"EVENT OF DEFAULT" is defined in SECTION 8.1.
15
22
"EXCESS CASH FLOW" means, with respect to the Borrower and its
Subsidiaries for any applicable period, the excess (if any), of
(a) EBITDA for such applicable period;
over
----
(b) the sum, without duplication, for such applicable period
on a consolidated basis of
(i) the cash portion of Interest Expense (net of cash
interest or investment income) actually paid during such
applicable period;
plus
----
(ii) scheduled payments and optional and mandatory
prepayments, to the extent actually made, of the principal
amount of the Term Loans or any other term Debt (including
Capitalized Lease Liabilities), and mandatory prepayments of
the principal amount of the Revolving Loans pursuant to
CLAUSES (b) or (i) of SECTION 3.1.1 in connection with a
reduction of the Revolving Loan Commitment Amount, in each
case for such applicable period;
plus
----
(iii) all federal, state and foreign income taxes
actually paid in cash during such applicable period (net of
any cash refunds actually received during such period);
plus
----
(iv) Capital Expenditures actually made during such
applicable period, or Capital Expenditures committed to be
made by the Borrower or such Subsidiary during such period but
not made, under circumstances certified by an Authorized
Officer of the Borrower to, and approved by, the Agents, in
each case pursuant to SECTION 7.2.7 (excluding Capital
Expenditures constituting Capitalized Lease Liabilities and by
way of the incurrence of Indebtedness permitted pursuant to
SECTION 7.2.2 (e) to a vendor of any assets permitted to be
acquired pursuant to SECTION 7.2.7 to finance the acquisition
of such assets);
plus
----
(v) the amount of the net increase (or minus in the
case of a net decrease) of Current Assets over
16
23
Current Liabilities of the Borrower and its Subsidiaries for
such applicable period;
plus
----
(vi) Investments permitted and actually made pursuant
to CLAUSES (d), (f), (g) and (h) of SECTION 7.2.5 during such
applicable period;
plus
----
(vii) Restricted Distributions of the type described
in the proviso to SECTION 7.2.6 made during such period.
"FACILITY AGENT" is defined in the PREAMBLE and includes each other
Person as shall have subsequently been appointed as the successor Facility Agent
pursuant to SECTION 9.4.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to
(a) the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York; or
(b) if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by Bank One from three federal funds brokers of
recognized standing selected by it.
"FEE LETTER" means the confidential fee letter, dated as of September
22, 1997, among the Borrower, the Agents and the Arrangers.
"FISCAL QUARTER" means any quarter of a Fiscal Year of the Borrower, as
certified by an Authorized Officer of the Borrower at the beginning of each
Fiscal Year and acceptable to the Facility Agent.
"FISCAL MONTH" means any fiscal month of a Fiscal Year of the Borrower.
"FISCAL YEAR" means any period of twelve consecutive calendar months
ending on December 31; references to a Fiscal Year with a number corresponding
to any calendar year (E.G. the "1996 Fiscal Year") refer to the Fiscal Year
ending on the December 31 occurring during such calendar year.
17
24
"FIXED CHARGE COVERAGE RATIO" means, at the end of any Fiscal Quarter,
the ratio for the period consisting of such Fiscal Quarter and each of the three
immediately preceding Fiscal Quarters (PROVIDED that for the first three Fiscal
Quarters after the Closing Date the Interest Expense component of the Fixed
Charge Coverage Ratio shall be determined on an Annualized basis) of
(a) EBITDA for all such Fiscal Quarters,
to
--
(b) the sum (without duplication) of
(i) Capital Expenditures actually made during all
such Fiscal Quarters pursuant to SECTION 7.2.7;
plus
----
(ii) the cash portion of Interest Expense (net of
cash interest or investment income) for all such Fiscal
Quarters;
plus
----
(iii) all scheduled payments of principal, to the
extent actually made, of the Term Loans and other term Debt
(excluding payments of principal on the Seller Note, but
including the principal portion of any Capitalized Lease
Liabilities) during all such Fiscal Quarters;
plus
----
(iv) all federal, state and foreign income taxes
actually paid in cash during all such Fiscal Quarters (net of
any cash refunds actually received during all such Fiscal
Quarters).
"F.R.S. BOARD" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in SECTION 1.4.
"HAZARDOUS MATERIAL" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
18
25
(d) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance within the meaning of any other
applicable federal, state or local law, regulation, ordinance or
requirement (including consent decrees and administrative orders)
relating to or imposing liability or standards of conduct concerning
any hazardous, toxic or dangerous waste, substance or material, all as
amended or hereafter amended.
"HEDGING OBLIGATIONS" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, and all other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates or currency exchange rates.
"HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
"IMPERMISSIBLE QUALIFICATION" means, relative to the opinion or
certification of any independent public accountant as to any financial statement
of any Obligor, any qualification or exception to such opinion or certification
(a) which is of a "going concern" or similar nature;
(b) which relates to the limited scope of examination of
matters relevant to such financial statement; or
(c) which relates to the treatment or classification of any
item in such financial statement and which, as a condition to its
removal, would require an adjustment to such item the effect of which
would be to cause such Obligor to be in default of any of its
obligations under SECTION 7.2.4.
"INCLUDING" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of EJUSDEM GENERIS
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"INDEBTEDNESS" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money or for
the deferred purchase price of property or services, and all
obligations of such Person evidenced by bonds, debentures, notes or
other similar instruments;
19
26
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all obligations of such Person as lessee under leases
which have been or should be, in accordance with GAAP, recorded as
Capitalized Lease Liabilities;
(d) all other items which, in accordance with GAAP, would be
included as liabilities on the liability side of the balance sheet of
such Person as of the date at which Indebtedness is to be determined;
(e) net liabilities of such Person under all Hedging
Obligations;
(f) whether or not so included as liabilities in accordance
with GAAP, all Indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person
(including Indebtedness arising under conditional sales or other title
retention agreements), whether or not such Indebtedness shall have been
assumed by such Person or is limited in recourse; and
(g) all Redeemable Stock of such Person (valued at the greater
of its voluntary or involuntary liquidation preference plus accrued and
unpaid dividends); and
(h) all Contingent Liabilities of such Person in respect of
any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer (to the extent such Person is liable for
such Indebtedness).
"INDEMNIFIED LIABILITIES" is defined in SECTION 10.4.
"INDEMNIFIED PARTIES" is defined in SECTION 10.4.
"INTEREST EXPENSE" means, for any applicable period, the aggregate
consolidated interest expense of the Borrower and its Subsidiaries for such
applicable period, as determined in accordance with GAAP, including the portion
of any payments made in respect of Capitalized Lease Liabilities allocable to
interest expense.
"INTEREST PERIOD" means, as to any LIBO Rate Loan, the period
commencing on the date on which such LIBO Rate Loan is made or continued as, or
converted into, a LIBO Rate Loan and ending on the date which is one, two,
three, six or, if available
20
27
in the Facility Agent's reasonable discretion, nine or twelve months thereafter,
in each case as the Borrower may select in its Borrowing Request or its
Conversion/Continuation Notice; PROVIDED, HOWEVER, that
(a) no more than 10 Interest Periods shall be in effect at any
one time;
(b) Interest Periods commencing on the same date for Loans
comprising part of the same Borrowing shall be of the same duration;
(c) if any Interest Period would otherwise end on a day which
is not a Business Day, the Interest Period shall extend to the next
following Business Day, unless the result of such extension would be to
carry such Interest Period into the next calendar month, in which case
such Interest Period shall end on the preceding Business Day; and
(d) no Interest Period for any Loan may extend beyond the
Stated Maturity Date for such Loan.
"INVENTORY" means any "inventory" (as that term is defined in Section
1-109(4) of the UCC) of the Borrower or any of its wholly-owned U.S.
Subsidiaries.
"INVESTMENT" means, relative to any Person, (i) any loan or advance
made by such Person to any other Person (excluding commission, travel,
relocation and similar advances to officers, directors and employees (or
individuals acting in similar capacities) made in the ordinary course of
business), and (ii) any ownership or similar interest held by such Person in any
other Person. The amount of any Investment shall be the original principal
amount thereof less all returns of principal or equity thereon (and without
adjustment by reason of the financial condition of such other Person).
"ISSUANCE REQUEST" means a Letter of Credit request and certificate
duly executed by an Authorized Officer of the Borrower, in substantially the
form of EXHIBIT D attached hereto.
"ISSUER" means any affiliate, unit or agency of the Facility Agent, or
any other Lender which has agreed to issue one or more Letters of Credit at the
request of the Facility Agent (which shall, at the Borrower's request, notify
the Borrower from time to time of the identity of such other Lender).
"JOINT VENTURE" means any Person, joint venture or other similar legal
arrangement (whether created by contract or conducted through a separate legal
entity) now or hereafter formed by the Borrower or any of its Subsidiaries with
another Person or Persons by means of an Investment made pursuant to CLAUSE (g)
of SECTION 7.2.5.
21
28
"LENDER ASSIGNMENT AGREEMENT" means a Lender Assignment Agreement
substantially in the form of EXHIBIT N hereto.
"LENDERS" is defined in the PREAMBLE.
"LETTER OF CREDIT" is defined in SECTION 2.1.3.
"LETTER OF CREDIT COMMITMENT" means, with respect to the Issuer, the
Issuer's obligation to issue Letters of Credit pursuant to SECTION 2.1.3 and,
with respect to each of the other Lenders that has a Revolving Loan Commitment,
the obligation of such Lender to participate in such Letters of Credit pursuant
to SECTION 2.6.1.
"LETTER OF CREDIT COMMITMENT AMOUNT" means, on any date, a maximum
amount of $10,000,000, as such amount may be reduced from time to time pursuant
to SECTION 2.2.
"LETTER OF CREDIT OUTSTANDINGS" means, on any date, an amount equal to
the sum of
(a) the aggregate Stated Amount at such time of all Letters of
Credit then outstanding and undrawn (as such aggregate Stated Amount
shall be adjusted, from time to time, as a result of drawings, the
issuance of Letters of Credit, or otherwise),
plus
----
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"LEVERAGE RATIO" means, at the end of any Fiscal Quarter, the ratio of
(a) total Debt of the Borrower and its Subsidiaries on a
consolidated basis outstanding at such time, less the aggregate amount
of cash and Cash Equivalent Investments held by the Borrower and its
Subsidiaries at such time;
to
--
(b) EBITDA for the period of four consecutive Fiscal Quarters
most recently ended on or prior to such date.
"LIBO RATE" means, relative to any Interest Period for LIBO Rate Loans,
the rate of interest per annum determined by the Facility Agent to be the
arithmetic mean (rounded upward to the next 1/100 of 1%) of the rates of
interest per annum at which dollar deposits in the approximate amount of the
amount of the Loan to be made or continued as, or converted into, a LIBO Rate
Loan by the Facility Agent and having a maturity comparable to such Interest
Period would be offered to the Facility Agent in
22
29
the London interbank market at its request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period.
"LIBO RATE LOAN" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to the LIBO Rate (Reserve Adjusted).
"LIBO RATE (RESERVE ADJUSTED)" means, relative to any Loan to be made,
continued or maintained as, or converted into, a LIBO Rate Loan for any Interest
Period, the rate of interest per annum (rounded upwards to the next 1/100 of 1%)
determined by the Facility Agent as follows:
LIBO Rate
LIBO Rate = -------------------------------
(Reserve Adjusted) 1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate
Loans will be adjusted automatically as to all LIBO Rate Loans then outstanding
as of the effective date of any change in the LIBOR Reserve Percentage.
"LIBOR OFFICE" means, relative to any Lender, the office of such Lender
designated as such as set forth opposite its name on SCHEDULE II hereto under
the applicable column heading or as set forth in the Lender Assignment Agreement
pursuant to which such Lender became a Lender hereunder or such other office of
a Lender (or any successor or assign of such Lender) as designated from time to
time by notice from such Lender to the Borrower and the Facility Agent, whether
or not outside the United States, which shall be making or maintaining LIBO Rate
Loans of such Lender hereunder.
"LIBOR RESERVE PERCENTAGE" means, relative to any Interest Period for
LIBO Rate Loans, the percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day (whether or not applicable to any
Lender) under regulations issued from time to time by the F.R.S. Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to Eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the F.R.S. Board).
"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property to secure payment of a debt or
performance of an obligation or other priority or preferential arrangement of
any kind or nature whatsoever; PROVIDED, HOWEVER, that the term "Lien" shall not
include a leasing arrangement in respect of Rental Equipment entered into in the
ordinary course of business by the Borrower or a Subsidiary of the Borrower.
23
30
"LOAN" means, as the context may require, a Revolving Loan or a Term
Loan, of any type.
"LOAN DOCUMENT" means this Agreement, the Notes, the Letters of Credit,
each Borrowing Base Certificate, each Borrowing Request, each Issuance Request,
the Fee Letter, each Pledge Agreement, the Guaranty, each Mortgage, each
Security Agreement, each Patent Security Agreement, each Trademark Security
Agreement, each Rate Protection Agreement and each other agreement, document or
instrument delivered in connection with this Agreement or any other Loan
Document, whether or not specifically mentioned herein.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse effect on the
financial condition, operations, assets, business, properties or prospects of
▇▇▇▇▇▇, the Borrower and their respective Subsidiaries, taken as a whole, (b) a
material impairment of the ability of the Borrower or any other Obligor to
perform its respective material obligations under the Loan Documents to which it
is or will be a party, or (c) an impairment of the validity or enforceability
of, or a material impairment of the rights, remedies or benefits available to
each Issuer, the Agents or the Lenders under this Agreement or any other Loan
Document.
"MOODY'S" means ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
thereto.
"MORTGAGE" means, collectively, each mortgage or deed of trust or
leasehold mortgage that may be executed and delivered pursuant to SECTION 7.1.7
or SECTION 7.1.11, in form and substance reasonably satisfactory to the Agents,
in each case as amended, supplemented, amended and restated or otherwise
modified from time to time.
"NET ASSET VALUE" means, at any time of any determination, (i) with
respect to Eligible Accounts, 85% of an amount equal to (x) the book value of
all Eligible Accounts as reflected on the books of the Borrower and its U.S.
Subsidiaries, determined on a consolidated basis and valued in accordance with
GAAP, net of (y) all credits, discounts and allowances in respect of such
Eligible Accounts and (ii) with respect to Eligible Inventory, an amount equal
to 60% of the lesser of the market value and the cost of goods (determined on a
first-in, first-out basis) of all Eligible Inventory as reflected on the books
of the Borrower and its wholly-owned U.S. Subsidiaries, determined on a
consolidated basis and valued in accordance with GAAP.
"NET CASUALTY PROCEEDS" means, with respect to any Casualty Event, the
EXCESS of:
24
31
(a) the gross amount of all insurance proceeds or condemnation
awards received by the Person suffering such Casualty Event as a result
of such Casualty Event,
over
----
(b) the sum (without duplication) of (i) the reasonable and
customary legal and other professional fees and expenses actually
incurred in connection with the receipt of such proceeds or awards and
(ii) all taxes and other governmental costs and expenses actually paid
or estimated by the Borrower or any of its Subsidiaries (in good faith)
to be payable in cash in connection with the receipt of such proceeds
or awards.
"NET DEBT PROCEEDS" means, with respect to the incurrence, sale or
issuance by the Borrower or any of its Subsidiaries of any Debt (other than Debt
permitted by SECTION 7.2.2 as in effect on the date hereof), the EXCESS of:
(a) the gross cash proceeds received by such Person from such
incurrence, sale or issuance,
over
----
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually incurred
in connection with such incurrence, sale or issuance.
"NET DISPOSITION PROCEEDS" means, with respect to any Disposition, the
EXCESS of:
(a) the gross cash proceeds received by such Person from any
such Disposition and any cash payments received in respect of
promissory notes or other non-cash consideration delivered to such
Person in respect thereof,
over
----
(b) the sum (without duplication) of (i) all reasonable and
customary fees and expenses with respect to legal, investment banking,
brokerage and accounting and other professional fees, sales commissions
and disbursements and all other reasonable fees, expenses and charges,
in each case actually incurred in connection with such Disposition,
(ii) all taxes and other governmental costs and expenses actually paid
or estimated by the Borrower or any of its Subsidiaries (in good faith)
to be payable in cash in connection with such sale Disposition, and
(iii) payments made by the Borrower or any of its Subsidiaries to
retire
25
32
Indebtedness (other than the Loans) of such Person where payment of
such Indebtedness is required in connection with such Disposition;
PROVIDED, HOWEVER, that if, after the payment of all taxes with respect to such
Disposition, the amount of estimated taxes, if any, pursuant to CLAUSE (b)(ii)
above exceeded the tax amount actually paid in cash in respect of such sale,
transfer or other disposition, the aggregate amount of such excess shall be
immediately payable, pursuant to CLAUSE (c) of SECTION 3.1.1, as Net Disposition
Proceeds.
"NET EQUITY PROCEEDS" means, with respect to the sale or issuance by
the Borrower or any of its Subsidiaries to any Person of any of its Capital
Stock or any warrants or options with respect to its Capital Stock or the
exercise of any such warrants or options after the Closing Date (other than (i)
pursuant to any subscription agreement, incentive plan, stock option plan or
similar arrangement with any officer, employee or director of the Borrower or
any of its Subsidiaries (ii) any loan by the Borrower to such officer, employee
or director solely for the purpose of purchasing such shares pursuant to CLAUSE
(f) of SECTION 7.2.5, and (iii) proceeds from the sale of any Capital Stock to
any officer, director or employee of the Borrower or any Subsidiary of the
Borrower in an aggregate amount not to exceed $1,000,000 after the Closing Date)
the EXCESS of:
(a) the gross cash proceeds received from such sale, exercise
or issuance,
over
----
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually incurred
in connection with such sale or issuance.
"NET INCOME" means
(a) for purposes of calculating compliance with the financial
covenants set forth in SECTION 7.2.4, for any period, without
duplication, the net income of the Borrower and its Subsidiaries for
such period on a consolidated basis, excluding extraordinary items; and
(b) for purposes of calculating compliance with the Pro Forma
Interest Coverage Ratio as provided in SECTION 7.3.2, for any period,
without duplication, the net income of the Borrower and its
Subsidiaries for such period on a consolidated basis, excluding
extraordinary items; PROVIDED that (i) the net income of any Person
which is not a
26
33
Subsidiary of the Borrower but which is consolidated with the Borrower
or is accounted for by the Borrower by the equity method of accounting
will be included only to the extent of the amount of cash dividends or
cash distributions paid to the Borrower or a wholly owned Subsidiary
Guarantor, (ii) the net income of any Subsidiary of the Borrower that
is subject to restrictions, direct or indirect, on the payment of
dividends or the making of distributions to the Borrower or a wholly
owned Subsidiary Guarantor will be excluded to the extent of such
restrictions, and (iii) the net income attributable to any business,
properties or assets acquired (by way of merger, consolidation,
purchase, pooling of interest transaction or otherwise) by the Borrower
or any Subsidiary of the Borrower for any period prior to the date of
such acquisition will be excluded (except to the extent required to be
included pursuant to any calculation of the Pro Forma Interest Coverage
Ratio hereunder).
"NON-U.S. SUBSIDIARY" means any Subsidiary other than a U.S.
Subsidiary.
"NOTE" means, as the context may require, a Revolving Note or a Term
Note.
"OBLIGATIONS" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement, the Notes and each other Loan Document.
"OBLIGOR" means the Borrower or any other Person (other than any Agent,
any Issuer or any Lender) obligated under, or otherwise a party to, any Loan
Document.
"ORGANIC DOCUMENT" means, relative to any Obligor, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements applicable to any of its authorized shares of Capital
Stock.
"PARTICIPANT" is defined in SECTION 10.11.
"PATENT SECURITY AGREEMENT" means any Patent Security Agreement
executed and delivered by an Obligor in substantially the form of EXHIBIT A to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section
27
34
4001(a)(3) of ERISA), and to which the Borrower or any corporation, trade or
business that is, along with the Borrower, a member of a Controlled Group, may
have liability, including any liability by reason of having been a substantial
employer within the meaning of section 4063 of ERISA at any time during the
preceding five years, or by reason of being deemed to be a contributing sponsor
under section 4069 of ERISA.
"PERCENTAGE" means, relative to any Lender, the applicable percentage
relating to Revolving Loans or Term Loans, as the case may be, set forth
opposite its name on SCHEDULE II hereto under the applicable column heading or
as set forth in the Lender Assignment Agreement pursuant to which such Lender
became a Lender hereunder, as such percentage may be adjusted from time to time
pursuant to Lender Assignment Agreement(s) executed by such Lender and its
Assignee Lender(s) and delivered pursuant to SECTION 10.11. A Lender shall not
have any Commitment to make Revolving Loans or Term Loans if its Percentage
under the respective column heading is zero.
"PERSON" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency or any other entity, whether
acting in an individual, fiduciary or other capacity.
"PLAN" means any Pension Plan or Welfare Plan.
"PLEDGE AGREEMENT" means, as the context may require, the Borrower
Pledge Agreement and/or the Subsidiary Pledge Agreement.
"PRO FORMA BALANCE SHEET" is defined in CLAUSE (b) of SECTION 5.1.10.
"PRO FORMA INTEREST COVERAGE RATIO" means, as of any date of
determination, the ratio computed for the period consisting of the most recent
four consecutive Fiscal Quarters for which internal financial statements are
available prior to the date of such determination (PROVIDED that in the event
the last Fiscal Quarter included in such period is one of the first three Fiscal
Quarters after the Closing Date the Interest Expense component of the Pro Forma
Interest Coverage Ratio shall be determined on an Annualized basis) of:
(a) EBITDA for such period;
to
--
(b) Interest Expense for such period;
PROVIDED, HOWEVER, that (i) if the Borrower or any Subsidiary of the Borrower
has incurred any Indebtedness since the beginning of such period (but only to
the extent that such Indebtedness incurred from and after the Closing Date
exceeds $500,000 individually or in the aggregate) that remains outstanding or
if the transaction giving rise to the need to calculate the Pro
28
35
Forma Interest Coverage Ratio is an incurrence of Indebtedness, or both, EBITDA
and Interest Expense for such period will be calculated after giving effect on a
PRO FORMA basis to such Indebtedness as if such Indebtedness had been issued on
the first day of such period and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such period,
(ii) if since the beginning of such period the Borrower or any Subsidiary of the
Borrower has made any Disposition, EBITDA for such period will be reduced by an
amount equal to the EBITDA (if positive), directly attributable to the assets
which are the subject of such Disposition for such period, or increased by an
amount equal to the EBITDA (if negative), directly attributable thereto for such
period and Interest Expense for such period will be reduced by an amount equal
to the Consolidated Interest Expense directly attributable to any Indebtedness
of the Borrower or any Subsidiary of the Borrower repaid, repurchased, defeased
or otherwise discharged with respect to the Borrower and its continuing
Subsidiaries in connection with any such sale or other disposition for such
period (or, if the Capital Stock of any Subsidiary of the Borrower is sold, the
Interest Expense for such period directly attributable to the Indebtedness of
such Subsidiary to the extent the Borrower and its continuing Subsidiaries are
no longer liable for such Indebtedness after such sale), (iii) if since the
beginning of such period the Borrower or any Subsidiary of the Borrower (by
merger or otherwise) has made an Investment in any Subsidiary of the Borrower
(or any Person which becomes a Subsidiary of the Borrower) or an acquisition of
assets, including any acquisition of assets occurring in connection with a
transaction causing a calculation to be made hereunder, which constitutes all or
substantially all of an operating unit of a business, EBITDA and Interest
Expense for such period will be calculated after giving PRO FORMA effect thereto
(including the incurrence of any Indebtedness) as if such Investment or
acquisition occurred on the first day of such period and (iv) in making such
computation, Interest Expense attributable to any Indebtedness incurred under
any revolving credit facility will be computed based on the average daily
balance of such Indebtedness during such period. For purposes of this
definition, whenever PRO FORMA effect is to be given to an acquisition of
assets, the amount of income or earnings relating thereto, and the amount of
Interest Expense associated with any Indebtedness incurred in connection
therewith, the PRO FORMA calculations will be determined in good faith by a
responsible financial or accounting officer of the Borrower. If any Indebtedness
bears a floating rate of interest and is being given PRO FORMA effect, the
interest on such Indebtedness will be calculated as if the rate in effect on the
date of determination had been the applicable rate for the entire period.
29
36
"QUARTERLY PAYMENT DATE" means the last day of each March, June,
September, and December or, if any such day is not a Business Day, the next
succeeding Business Day, commencing December 31, 1997.
"RATE PROTECTION AGREEMENT" means, collectively, any interest rate
swap, cap, collar or similar agreement entered into by the Borrower in respect
of the Loans pursuant to the terms of this Agreement under which the
counterparty to such agreement is (or at the time such Rate Protection Agreement
was entered into, was) a Lender or an Affiliate of a Lender.
"REDEEMABLE STOCK" means any Capital Stock that by its terms or
otherwise (i) is required to be redeemed prior to September 30, 2006, (ii)
matures or is redeemable, in whole or in part, at the option of the Borrower,
any Subsidiary of the Borrower or the holder thereof or pursuant to a mandatory
sinking fund at any time prior to September 30, 2006, or (iii) is convertible
into or exchangeable for debt securities which provide for any scheduled payment
of principal prior to September 30, 2006, at the option of the issuer thereof at
any time prior to September 30, 2006, until the right to so convert or exchange
is irrevocably relinquished.
"REFINANCING" is defined in the FOURTH RECITAL.
"REIMBURSEMENT OBLIGATION" is defined in SECTION 2.6.3.
"RELEASE" means a "release", as such term is defined in CERCLA.
"RENTAL EQUIPMENT" means, as of any date of determination, any
equipment which (i) is purchased and owned by the Borrower or any of its
wholly-owned U.S. Subsidiaries and (ii) is leased by the Borrower or such
Subsidiary to any Person (other than an Affiliate) pursuant to the terms of
which the Borrower or such Subsidiary is then charging for the rental of such
equipment.
"REQUIRED LENDERS" means, at any time, the Required Revolving Lenders
and the Required Term Lenders.
"REQUIRED REVOLVING LENDERS" means, at any time, (i) prior to the date
of the initial Credit Extension, Revolving Lenders having at least 51% of the
Revolving Loan Commitments, and (ii) on and after the initial Credit Extension,
Revolving Lenders holding at least 51% of the then effective Revolving Loan
Commitment Amount.
"REQUIRED TERM LENDERS" means, at any time, (i) prior to the date of
the initial Credit Extension, Term Lenders having at least 51% of the Term Loan
Commitments, and (ii) on and after the initial Credit Extension, Term Lenders
holding at least 51% of the then outstanding Term Loans.
30
37
"RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, ET SEQ., as in effect
from time to time.
"RESTRICTED DISTRIBUTIONS" is defined in SECTION 7.2.6.
"RESTRICTED PAYMENT COMPUTATION DATE" is defined in SECTION 7.3.4.
"RESTRICTED PAYMENTS" is defined in SECTION 7.3.4.
"REVOLVING LENDERS" means Lenders having a Percentage of the Revolving
Loan Commitment in excess of zero.
"REVOLVING LOAN" is defined in SECTION 2.1.2.
"REVOLVING LOAN COMMITMENT" means, relative to any Lender, such
Lender's obligation to make Revolving Loans pursuant to SECTION 2.1.2 and to
issue (in the case of an Issuer) or participate in (in the case of all Lenders)
Letters of Credit pursuant to SECTION 2.1.3 or SECTION 2.6.1.
"REVOLVING LOAN COMMITMENT AMOUNT" means, on any date, $40,000,000, as
such amount may be reduced from time to time pursuant to SECTION 2.2.
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means the earliest of
(a) the fifth anniversary of the Closing Date
(b) the date on which the Revolving Loan Commitment Amount is
terminated in full or reduced to zero pursuant to SECTION 2.2; and
(c) the date on which any Commitment Termination Event occurs.
Upon the occurrence of any event described in CLAUSE (b) or (c), the Revolving
Loan Commitments shall terminate automatically and without any further action.
"REVOLVING NOTE" means a promissory note of the Borrower payable to the
order of any Lender, in the form of EXHIBIT A hereto (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
the aggregate Indebtedness of the Borrower to such Lender resulting from
outstanding Revolving Loans, and also means all other promissory notes accepted
from time to time in substitution therefor or renewal thereof.
"RIPPLEWOOD" means Ripplewood Holdings LLC.
31
38
"S&P" means Standard & Poor's Ratings Group, a division of McGraw Hill,
Inc., or any successor thereto.
"SECURITY AGREEMENT" means, as the context may require, the Borrower
Security Agreement and/or the Subsidiary Security Agreement.
"SELLER NOTE" means the unsecured promissory note of the Borrower in
the principal amount of $5,000,000 issued to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, payable on the
terms set forth in the Purchase Agreement.
"SOLVENCY CERTIFICATE" means a certificate duly executed by an
Authorized Officer of the Borrower substantially in the form of EXHIBIT L
hereto, delivered pursuant to SECTION 5.1.11.
"SOLVENT" means, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person, (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature, and
(d) such Person is not engaged in business or a transaction, and such person is
not about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital. The amount of
contingent liabilities at any time shall be computed as the amount that, in the
light of all the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured liability.
"STATED AMOUNT" of each Letter of Credit means the total amount
available to be drawn under such Letter of Credit upon the issuance thereof.
"STATED EXPIRY DATE" is defined in SECTION 2.6.
"STATED MATURITY DATE" means
(a) in the case of any Revolving Loan, September 29, 2002; and
(b) in the case of any Term Loan, September 29, 2005.
"STOCKHOLDERS" is defined in the THIRD RECITAL.
"SUBORDINATED DEBT" means all unsecured Indebtedness of the Borrower
for money borrowed which is subordinated, upon terms
32
39
satisfactory to the Agents and the Required Lenders, in right of payment to the
payment in full in cash of all Obligations.
"SUBSIDIARY" means, with respect to any Person, any corporation of
which more than 50% of the outstanding Capital Stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time Capital Stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by such
Person and one or more other Subsidiaries of such Person, or by one or more
other Subsidiaries of such Person.
"SUBSIDIARY GUARANTOR" means, on the Closing Date, each U.S. Subsidiary
of the Borrower (including ▇▇▇▇▇▇), and thereafter, each U.S. Subsidiary of the
Borrower that is required, pursuant to CLAUSE (a) of SECTION 7.1.7, to execute
and deliver a supplement to the Subsidiary Guaranty.
"SUBSIDIARY GUARANTY" means the Guaranty executed and delivered by an
Authorized Officer of each Subsidiary Guarantor pursuant to SECTION 5.1.5 or
CLAUSE (a) of SECTION 7.1.7, substantially in the form of EXHIBIT I hereto, as
amended, supplemented, amended and restated or otherwise modified from time to
time.
"SUBSIDIARY PLEDGE AGREEMENT" means the Pledge Agreement executed and
delivered by an Authorized Officer of each Subsidiary Guarantor pursuant to
CLAUSE (c) of SECTION 5.1.8 or CLAUSE (b) of SECTION 7.1.7, substantially in the
form of EXHIBIT J-2 hereto, in each case as amended, supplemented, amended and
restated or otherwise modified from time to time.
"SUBSIDIARY SECURITY AGREEMENT" means the Security Agreement executed
and delivered by an Authorized Officer of each Subsidiary Guarantor pursuant to
SECTION 5.1.9 or CLAUSE (a) of SECTION 7.1.7, substantially in the form of
EXHIBIT K-2 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"▇▇▇▇▇▇" is defined in the SECOND RECITAL.
"SYNDICATION AGENT" is defined in the PREAMBLE.
"TAXES" is defined in SECTION 4.6.
"TERM LOAN" is defined in SECTION 2.1.1.
"TERM LOAN COMMITMENT" means, relative to any Lender, such Lender's
obligation to make Term Loans pursuant to SECTION 2.1.1.
"TERM LOAN COMMITMENT AMOUNT" means $100,000,000.
33
40
"TERM LOAN COMMITMENT TERMINATION DATE" means the earliest of
(a) December 22, 1997, if the Term Loans have not been made on
or prior to such date;
(b) the Closing Date (immediately after the making of the Term
Loans on such date); and
(c) the date on which any Commitment Termination Event occurs.
"TERM NOTE" means a promissory note of the Borrower payable to the
order of any Lender, in the form of EXHIBIT B hereto (as such promissory note
may be amended, endorsed or otherwise modified from time to time), evidencing
the aggregate Indebtedness of the Borrower to such Lender resulting from
outstanding Term Loans, and also means all other promissory notes accepted from
time to time in substitution therefor or renewal thereof.
"TERM LENDERS" means (i) prior to the date of the initial Credit
Extension, Lenders having a Percentage of the Term Loan Commitment in excess of
zero, and (ii) on and after the date of the initial Credit Extension, Lenders
having outstanding Term Loans.
"TERM LOAN" is defined in SECTION 2.1.1.
"TOTAL EXPOSURE AMOUNT" means, on any date of determination, the then
outstanding principal amount of all Term Loans and the then effective Revolving
Loan Commitment Amount.
"TRADEMARK SECURITY AGREEMENT" means any Trademark Security Agreement
executed and delivered by an Obligor in substantially the form of EXHIBIT B to
any Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"TRANCHE" means, as the context may require, the Term Loans or the
Revolving Loan Commitments.
"TRANSACTION" is defined in the SIXTH RECITAL.
"TRANSACTION DOCUMENTS" means each of the Purchase Agreement, the
Seller Note and all other agreements, documents, instruments, certificates,
filings, consents, approvals, board of directors resolutions and opinions
furnished to or in connection with the Acquisition, the Refinancing and the
transactions contemplated thereby and hereby, each as amended, supplemented,
amended and restated or otherwise modified from time to time as permitted in
accordance with the terms hereof or any other Loan Document.
34
41
"TYPE" means, relative to any Loan, the portion thereof, if any, being
maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of New York.
"UNITED STATES" or "U.S." means the United States of America, its fifty
States and the District of Columbia.
"U.S. SUBSIDIARY" means any Subsidiary of the Borrower organized under
the laws of the United States or any state, possession or commonwealth thereof.
"WAIVER" means any agreement in favor of the Facility Agent for the
benefit of the Lenders and each Issuer in form and substance reasonably
satisfactory to the Facility Agent.
"WELFARE PLAN" means a "welfare plan", as such term is defined in
section 3(1) of ERISA.
"WHOLLY OWNED SUBSIDIARY" means, with respect to any Person, any
Subsidiary of such Person all of the Capital Stock (including all rights and
options to purchase such Capital Stock) of which, other than directors'
qualifying shares, are owned, beneficially and of record, by such Person and/or
one or more wholly owned Subsidiaries of such Person.
SECTION 1.2. USE OF DEFINED TERMS. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each Note, Borrowing Request, Continuation/Conversion Notice, Loan Document,
notice and other communication delivered from time to time in connection with
this Agreement or any other Loan Document.
SECTION 1.3. CROSS-REFERENCES. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section are
references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in any
Article, Section or definition to any clause are references to such clause of
such Article, Section or definition.
SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS. Unless otherwise
specified, all accounting terms used herein or in any other Loan Document shall
be interpreted, all accounting determinations and computations hereunder or
thereunder (including under SECTION 7.2.4) shall be made, and all financial
statements required to be delivered hereunder or thereunder shall be prepared in
accordance with, those generally accepted accounting principles ("GAAP") applied
in the preparation of the financial statements referred to in SECTION 6.5.
Without limitation of the foregoing, for purposes of the defined terms
35
42
"APPLICABLE COMMITMENT FEE" and "APPLICABLE MARGIN" and for purposes of
measuring the Borrower's compliance with the financial covenants set forth in
SECTION 7.2.4 (other than the calculation of Interest Expense) for any period
during the first three Fiscal Quarters following the consummation of the
Transaction, the financial information for ▇▇▇▇▇▇ delivered to the Agents on or
prior to the Closing Date pursuant to CLAUSE (a) of SECTION 5.1.10 shall be
combined with, and treated as, the operations of the Borrower and its
Subsidiaries on a PRO FORMA basis for such period.
ARTICLE II
COMMITMENTS, BORROWING PROCEDURES AND NOTES
SECTION 2.1. COMMITMENTS. On the terms and subject to the conditions of
this Agreement (including ARTICLES II AND V), each Lender severally agrees as
follows:
SECTION 2.1.1. TERM LOAN COMMITMENT. On (but solely on) the Closing
Date (which shall be a Business Day), each Lender that has a Percentage in
excess of zero of the Term Loan Commitment will make Loans (relative to such
Lender, its "TERM LOANS") to the Borrower equal to such Lender's Percentage of
the aggregate amount of the Borrowing or Borrowings of Term Loans requested by
the Borrower to be made on the Closing Date (with the commitment of each such
Lender described in this SECTION 2.1.1 herein referred to as its "TERM LOAN
Commitment"). No amounts paid or prepaid with respect to Term Loans may be
reborrowed.
SECTION 2.1.2. REVOLVING LOAN COMMITMENT. From time to time on any
Business Day occurring concurrently with (or after) the making of the Term Loans
but prior to the Revolving Loan Commitment Termination Date, each Lender that
has a Percentage of the Revolving Loan Commitment in excess of zero will make
Loans (relative to such Lender, its "REVOLVING LOANS") to the Borrower equal to
such Lender's Percentage of the aggregate amount of the Borrowing or Borrowings
of Revolving Loans requested by the Borrower to be made on such day. On the
terms and subject to the conditions hereof, the Borrower may from time to time
borrow, prepay and reborrow Revolving Loans.
SECTION 2.1.3. LETTER OF CREDIT COMMITMENT. From time to time on any
Business Day occurring prior to the Revolving Loan Commitment Termination Date,
the Issuer will
(a) issue one or more standby or documentary letters of credit
(each referred to as a "LETTER OF CREDIT") for the account of the
Borrower (or for the account of a U.S. Subsidiary of the Borrower of
the type described in SECTION
36
43
2.6) in the Stated Amount requested by the Borrower on such day; or
(b) extend the Stated Expiry Date of an existing Letter of
Credit previously issued hereunder to a date that is not later than the
earlier of (x) the Revolving Loan Commitment Termination Date and (y)
one year from the date of such extension.
SECTION 2.1.4. LENDERS NOT PERMITTED OR REQUIRED TO MAKE LOANS. No
Lender shall be permitted or required to, and the Borrower shall not request
that any Lender, make
(a) any Term Loan if, after giving effect thereto,
the aggregate original principal amount of all the Term Loans of such
Lender would exceed such Lender's Percentage of the Term Loan
Commitment Amount; or
(b) any Revolving Loan if, after giving effect
thereto, the aggregate outstanding principal amount of all the
Revolving Loans (i) of all the Lenders with Revolving Loan Commitments,
together with the Letter of Credit Outstandings, would exceed the
lesser of (x) the then existing Revolving Loan Commitment Amount and
(y) the then existing Borrowing Base Amount, or (ii) of such Lender
with a Revolving Loan Commitment, together with such Lender's
Percentage of the Letter of Credit Outstandings, would exceed such
Lender's Percentage of the lesser of (x) the then existing Revolving
Loan Commitment Amount and (y) the then existing Borrowing Base Amount.
SECTION 2.1.5. ISSUER NOT PERMITTED OR REQUIRED TO ISSUE LETTERS OF
CREDIT. No Issuer shall be permitted or required to issue any Letter of Credit
if, after giving effect thereto, (i) the aggregate amount of all Letter of
Credit Outstandings would exceed the Letter of Credit Commitment Amount or (ii)
the sum of the aggregate amount of all Letter of Credit Outstandings plus the
aggregate principal amount of all Revolving Loans then outstanding would exceed
the lesser of (x) then existing the Revolving Loan Commitment Amount and (y) the
then existing Borrowing Base Amount.
SECTION 2.2. REDUCTION OF COMMITMENT AMOUNTS. The Commitment Amounts
are subject to reduction from time to time pursuant to this SECTION 2.2.
SECTION 2.2.1. OPTIONAL. The Borrower may, from time to time on any
Business Day occurring after the time of the initial Credit Extension hereunder,
voluntarily reduce the amount of the Revolving Loan Commitment Amount or the
Letter of Credit Commitment Amount; PROVIDED, HOWEVER, that all such reductions
(i) shall be permanent and (ii) to the extent such reduction in the Commitment
Amount requires a mandatory prepayment of
37
44
Revolving Loans pursuant to CLAUSE (i) of SECTION 3.1.1 (x) in the case of
prepayments of Base Rate Loans shall require at least one Business Day's prior
notice to the Facility Agent, and any partial reduction of any Commitment Amount
shall be in a minimum amount of $500,000 and in an integral multiple of $100,000
or (y) in the case of prepayments of LIBO Rate Loans, shall require at least
three Business Days' prior notice to the Facility Agent, and any partial
reduction of any Commitment Amount shall be in a minimum amount of $1,000,000
and in an integral multiple of $100,000; PROVIDED FURTHER, that to the extent
such reduction in the Commitment Amount requires a mandatory prepayment of
Revolving Loans pursuant to CLAUSE (i) of SECTION 3.1.1, any such reduction
shall be subject to the consent of the Facility Agent. Any reduction of the
Revolving Loan Commitment Amount which reduces the Revolving Loan Commitment
Amount below the Letter of Credit Commitment Amount shall result in an automatic
and corresponding reduction of the Letter of Credit Commitment Amount to an
aggregate amount not in excess of the Revolving Loan Commitment Amount, as so
reduced, without any further action on the part of the Issuer.
SECTION 2.2.2. MANDATORY. Any reduction of the Revolving Loan
Commitment Amount which reduces the Revolving Loan Commitment Amount below the
Letter of Credit Commitment Amount shall result in an automatic and
corresponding reduction of the Letter of Credit Commitment Amount to an
aggregate amount not in excess of the Revolving Loan Commitment Amount, as so
reduced, without any further action on the part of the Issuer.
SECTION 2.3. BORROWING PROCEDURE. By delivering a Borrowing Request to
the Facility Agent on or before 12:00 p.m., New York time, on a Business Day,
the Borrower may from time to time irrevocably request, on not less than one
Business Day's notice (in the case of Base Rate Loans) or three Business Days'
notice (in the case of LIBO Rate Loans) nor more than five Business Days' notice
(in the case of any Loans), that a Borrowing be made in a minimum amount of
$100,000 and an integral multiple of $10,000, or in the unused amount of the
applicable Commitment. On the terms and subject to the conditions of this
Agreement, each Borrowing shall be comprised of the type of Loans, and shall be
made on the Business Day, specified in such Borrowing Request. On or before 1:00
p.m. (New York time) on such Business Day each Lender shall deposit with the
Facility Agent same day funds in an amount equal to such Lender's Percentage of
the requested Borrowing. Such deposit will be made to an account which the
Facility Agent shall specify from time to time by notice to the Lenders. To the
extent funds are received from the Lenders, the Facility Agent shall make such
funds available to the Borrower by wire transfer to the accounts the Borrower
shall have specified in its Borrowing Request. No Lender's obligation to make
any Loan shall be affected by any other Lender's failure to make any Loan.
38
45
SECTION 2.4. CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/Conversion Notice to the Facility Agent on or before 12:00 p.m.,
New York time, on a Business Day, the Borrower may from time to time irrevocably
elect, on not less than one Business Day's notice (in the case of a conversion
of LIBO Rate Loans to Base Rate Loans) or three Business Days' notice (in the
case of a continuation of LIBO Rate Loans or a conversion of Base Rate Loans to
LIBO Rate Loans) nor more than five Business Days' notice (in the case of all
Loans) that all, or any portion in an aggregate minimum amount of $100,000 and
an integral multiple of $10,000, of any Loans be, in the case of Base Rate
Loans, converted into LIBO Rate Loans of either type or, in the case of LIBO
Rate Loans of either type, be converted into a Base Rate Loan or a LIBO Rate
Loan of the other type or continued as a LIBO Rate Loan of such type (in the
absence of delivery of a Continuation/Conversion Notice with respect to any LIBO
Rate Loan at least three Business Days before the last day of the then current
Interest Period with respect thereto, such LIBO Rate Loan shall, on such last
day, automatically convert to a Base Rate Loan); PROVIDED, HOWEVER, that (i)
each such conversion or continuation shall be pro rated among the applicable
outstanding Loans of all Lenders, and (ii) no portion of the outstanding
principal amount of any Loans may be continued as, or be converted into, LIBO
Rate Loans when any Default has occurred and is continuing.
SECTION 2.5. FUNDING. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or Affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; PROVIDED,
HOWEVER, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Borrower to repay such
LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, Affiliate or international banking facility. In addition, the
Borrower hereby consents and agrees that, for purposes of any determination to
be made for purposes of SECTION 4.1, 4.2, 4.3 or 4.4, it shall be conclusively
assumed that each Lender elected to fund all LIBO Rate Loans by purchasing
Dollar deposits in its LIBOR Office's interbank eurodollar market.
SECTION 2.6. ISSUANCE PROCEDURES. By delivering to the Facility Agent
an Issuance Request on or before 12:00 noon, New York time, on a Business Day,
the Borrower may, from time to time irrevocably request, on not less than three
nor more than ten Business Days' notice (or such other notice period as may be
acceptable to the Issuer in its sole discretion), in the case of an initial
issuance of a Letter of Credit, and not less than three nor more than ten
Business Days' notice prior to the then existing Stated Expiry Date of a Letter
of Credit (or such other notice period as may be acceptable to the Issuer in its
sole discretion), in the case of a request for the extension of the
39
46
Stated Expiry Date of a Letter of Credit, that the Issuer issue, or extend the
Stated Expiry Date of, as the case may be, an irrevocable Letter of Credit on
behalf of the Borrower (whether issued for the Borrower's account or for the
account of any wholly-owned U.S. Subsidiary of the Borrower that is a signatory
to the Subsidiary Guaranty and the Subsidiary Security Agreement and whose
outstanding Capital Stock is pledged to the Facility Agent for the benefit of
the Lenders pursuant to a Pledge Agreement), in such form as may be requested by
the Borrower and approved by the Issuer, solely for the purposes described in
SECTION 7.1.10. Notwithstanding anything to the contrary contained herein or in
any separate application for any Letter of Credit, the Borrower hereby
acknowledges and agrees that it shall be obligated to reimburse the Issuer upon
each Disbursement of any Letter of Credit, and it shall be deemed to be an
obligor for purposes of each such Letter of Credit issued hereunder (whether the
account party on such Letter of Credit is the Borrower or a wholly-owned U.S.
Subsidiary of the Borrower). Upon receipt of an Issuance Request, the Facility
Agent shall promptly notify the Issuer and each Lender thereof and the Issuer
shall, subject to the terms and conditions hereof, including ARTICLE V, promptly
(but in no event later than three Business Days after such notification) issue a
Letter of Credit. Each Letter of Credit shall by its terms be stated to expire
on a date (its "STATED EXPIRY DATE") no later than the earlier to occur of (i)
the Revolving Loan Commitment Termination Date and (ii) one year from the date
of its issuance. The Issuer will make available to the beneficiary thereof the
original of each Letter of Credit which it issues hereunder.
SECTION 2.6.1. OTHER LENDERS' PARTICIPATION. Upon the issuance of each
Letter of Credit issued by the Issuer pursuant hereto, and without further
action, each Lender (other than the Issuer) that has a Revolving Loan Commitment
shall be deemed to have irrevocably purchased from the Issuer, to the extent of
its Percentage in respect of Revolving Loans, and the Issuer shall be deemed to
have irrevocably granted and sold to such Lender a participation interest in
such Letter of Credit (including the Contingent Liability and any Reimbursement
Obligation and all rights with respect thereto), and such Lender shall, to the
extent of its Percentage in respect of Revolving Loans, be responsible for
reimbursing promptly (and in any event within one Business Day) the Issuer for
Reimbursement Obligations which have not been reimbursed by the Borrower in
accordance with SECTION 2.6.3. In addition, such Lender shall, to the extent of
its Percentage in respect of Revolving Loans, be entitled to receive a ratable
portion of the Letter of Credit fees payable pursuant to SECTION 3.3.3 with
respect to each Letter of Credit and of interest payable pursuant to SECTION 3.2
with respect to any Reimbursement Obligation. To the extent that any Lender has
reimbursed the Issuer for a Disbursement as required by this Section, such
Lender shall be entitled to receive its ratable
40
47
portion of any amounts subsequently received (from the Borrower or otherwise) in
respect of such Disbursement.
SECTION 2.6.2. DISBURSEMENTS; CONVERSION TO REVOLVING LOANS. The Issuer
will notify the Borrower and the Facility Agent promptly of the presentment for
payment of any Letter of Credit issued by the Issuer, together with notice of
the date (the "DISBURSEMENT DATE") such payment shall be made (each such
payment, a "Disbursement"). Subject to the terms and provisions of such Letter
of Credit and this Agreement, the Issuer shall make such payment to the
beneficiary (or its designee) of such Letter of Credit. Prior to 12:00 noon, New
York time, on the first Business Day following the Disbursement Date (the
"DISBURSEMENT DUE DATE"), the Borrower shall be obligated to reimburse the
Facility Agent, for the account of the Issuer, for all amounts which the Issuer
has disbursed under such Letter of Credit, together with interest thereon at the
rate per annum otherwise applicable to Revolving Loans (made as Base Rate Loans)
from and including the Disbursement Date to but excluding the Disbursement Due
Date and, thereafter (unless such Disbursement is converted into a Base Rate
Loan on the Disbursement Due Date), at a rate per annum equal to the rate per
annum then in effect with respect to overdue Revolving Loans (made as Base Rate
Loans) pursuant to SECTION 3.2.2 for the period from and including the
Disbursement Due Date to but excluding the date of such reimbursement; PROVIDED,
HOWEVER, that, if no Default shall have then occurred and be continuing, unless
the Borrower has notified the Facility Agent no later than one Business Day
prior to the Disbursement Due Date that it will reimburse the Issuer for the
applicable Disbursement, then the amount of the Disbursement shall be deemed to
be a Revolving Loan constituting a Base Rate Loan and following the giving of
notice thereof by the Facility Agent to the Lenders, each Lender with a
commitment to make Revolving Loans (other than the Issuer) will deliver to the
Issuer on the Disbursement Due Date immediately available funds in an amount
equal to such Lender's Percentage of such Revolving Loan. Each conversion of
Disbursement amounts into Revolving Loans shall constitute a representation and
warranty by the Borrower that on the date of the making of such Revolving Loan
all of the statements set forth in SECTION 5.2.1 are true and correct.
SECTION 2.6.3. REIMBURSEMENT. The obligation (a "REIMBURSEMENT
OBLIGATION") of the Borrower under SECTION 2.6.2 to reimburse the Issuer with
respect to each Disbursement (including interest thereon) not converted into a
Base Rate Loan pursuant to SECTION 2.6.2, and, upon the failure of the Borrower
to reimburse the Issuer and the giving of notice thereof by the Facility Agent
to the Lenders, each Lender's (to the extent it has a Revolving Loan Commitment)
obligation under SECTION 2.6.1 to reimburse the Issuer or fund its Percentage of
any Disbursement converted into a Base Rate Loan, shall be absolute and
unconditional under any and all circumstances and
41
48
irrespective of any setoff, counterclaim or defense to payment which the
Borrower or such Lender, as the case may be, may have or have had against the
Issuer or any such Lender, including any defense based upon the failure of any
Disbursement to conform to the terms of the applicable Letter of Credit (if, in
the Issuer's good faith opinion, such Disbursement is determined to be
appropriate) or any non-application or misapplication by the beneficiary of the
proceeds of such Letter of Credit; PROVIDED, HOWEVER, that after paying in full
its Reimbursement Obligation hereunder, nothing herein shall adversely affect
the right of the Borrower or such Lender, as the case may be, to commence any
proceeding against the Issuer for any wrongful Disbursement made by the Issuer
under a Letter of Credit as a result of acts or omissions constituting gross
negligence or willful misconduct on the part of the Issuer.
SECTION 2.6.4. DEEMED DISBURSEMENTS. Upon the occurrence and during the
continuation of any Event of Default of the type described in SECTION 8.1.9 or,
with notice from the Facility Agent acting at the direction of the Required
Lenders, upon the occurrence and during the continuation of any other Event of
Default,
(a) an amount equal to that portion of all Letter of Credit
Outstandings attributable to the then aggregate amount which is undrawn
and available under all Letters of Credit issued and outstanding shall,
without demand upon or notice to the Borrower or any other Person, be
deemed to have been paid or disbursed by the Issuer under such Letters
of Credit (notwithstanding that such amount may not in fact have been
so paid or disbursed); and
(b) upon notification by the Facility Agent to the Borrower of
the obligations of the Borrower under this Section, the Borrower shall
be immediately obligated to reimburse the Issuer for the amount deemed
to have been so paid or disbursed by the Issuer.
Any amounts so payable by the Borrower pursuant to this Section shall be
deposited in cash with the Facility Agent and held as collateral security for
the Obligations in connection with the Letters of Credit issued by the Issuer.
At such time when the Events of Default giving rise to the deemed disbursements
hereunder shall have been cured or waived, the Facility Agent shall return to
the Borrower all amounts then on deposit with the Facility Agent pursuant to
this Section, together with accrued interest at the Federal Funds Rate, which
have not been applied to the satisfaction of such Obligations.
SECTION 2.6.5. NATURE OF REIMBURSEMENT OBLIGATIONS. The Borrower and,
to the extent set forth in SECTION 2.6.1, each Lender with a Revolving Loan
Commitment, shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the
42
49
beneficiary thereof. The Issuer (except to the extent of its own gross
negligence or willful misconduct) shall not be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a Letter
of Credit, even if it should in fact prove to be in any or all respects
invalid, insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may prove
to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or
otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a
Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to the Issuer or any Lender with a Revolving Loan
Commitment hereunder. In furtherance and extension and not in limitation or
derogation of any of the foregoing, any action taken or omitted to be taken by
the Issuer in good faith (and not constituting gross negligence or willful
misconduct) shall be binding upon the Borrower, each other Obligor and each such
Lender, and shall not put the Issuer under any resulting liability to the
Borrower, any other Obligor or any such Lender, as the case may be.
SECTION 2.7. NOTES. Each Lender's Loans under a Commitment shall be
evidenced by a Note payable to the order of such Lender in a maximum principal
amount equal to such Lender's Percentage of the original applicable Commitment
Amount. The Borrower hereby irrevocably authorizes each Lender to make (or cause
to be made) appropriate notations on the grid attached to such Lender's Notes
(or on any continuation of such grid), which notations, if made, shall evidence,
INTER ALIA, the date of, the outstanding principal of, and the interest rate and
Interest Period applicable to the Loans evidenced thereby. Such notations shall
be conclusive and binding on the Borrower absent manifest error; PROVIDED,
HOWEVER, that the failure of any Lender to make any
43
50
such notations shall not limit or otherwise affect any Obligations of the
Borrower or any other Obligor.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. REPAYMENTS AND PREPAYMENTS; APPLICATION.
SECTION 3.1.1. REPAYMENTS AND PREPAYMENTS. The Borrower shall repay in
full the unpaid principal amount of each Loan upon the Stated Maturity Date
therefor. Prior thereto, the Borrower
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding principal
amount of any Loans; PROVIDED, HOWEVER, that
(i) (x) any such prepayment of Term Loans shall be
made PRO RATA among Term Loans of the same type and, if
applicable, having the same Interest Period of all Lenders
that have made such Term Loans, and (y) any such prepayment of
Revolving Loans shall be made PRO RATA among the Revolving
Loans of the same type and, if applicable, having the same
Interest Period of all Lenders that have made such Revolving
Loans;
(ii) the Borrower shall comply with SECTION 4.4 in
the event that any LIBO Rate Loan is prepaid on any day other
than the last day of the Interest Period for such Loan;
(iii) all such voluntary prepayments of LIBO Rate
Loans shall require at least three but no more than five
Business Days' prior written notice to the Facility Agent;
(iv) all such voluntary prepayments of Base Rate
Loans shall require at least one but no more than five
Business Days' prior written notice to the Facility Agent;
(v) all such voluntary partial prepayments shall be
in an aggregate minimum amount of $100,000 and an integral
multiple of $10,000; and
(vi) any voluntary prepayment of Term Loans made on
or prior to the third anniversary of the Closing Date shall be
subject to the payment of a premium, as set forth below:
44
51
(A) 2.0% of the principal amount of Term
Loans prepaid pursuant to this CLAUSE (a) of this
SECTION 3.1.1 on or prior to the first anniversary of
the Closing Date;
(B) 1.0% of the principal amount of Term
Loans prepaid pursuant to this CLAUSE (a) of this
SECTION 3.1.1 subsequent to the first anniversary of
the Closing Date and prior to or on the second
anniversary of the Closing Date; and
(C).5% of the principal amount of Term Loans
prepaid pursuant to this CLAUSE (a) of this SECTION
3.1.1 subsequent to the second anniversary of the
Closing Date and prior to or on the third anniversary
of the Closing Date;
(b) shall, on each date when any reduction in the then
existing Borrowing Base Amount shall become effective, make a mandatory
prepayment of Revolving Loans and (if necessary) deposit with the
Facility Agent cash collateral for Letter of Credit Outstandings, in an
aggregate amount equal to the excess, if any, of the aggregate,
outstanding principal amount of all Revolving Loans and Letter of
Credit Outstandings over the then existing Borrowing Base Amount, to be
applied as set forth in SECTION 3.1.2;
(c) shall, no later than 30 days following the receipt of any
Net Disposition Proceeds by the Borrower or any of its Subsidiaries,
deliver to the Facility Agent a calculation of the amount of such Net
Disposition Proceeds and, to the extent the aggregate amount of Net
Disposition Proceeds received since the Closing Date exceeds
$1,000,000, make a mandatory prepayment of the Loans in an amount equal
to 100% of such Net Disposition Proceeds to be applied as set forth in
SECTION 3.1.2, PROVIDED that no mandatory prepayment on account of such
Net Disposition Proceeds shall be required under this CLAUSE (c) if the
Borrower informs the Facility Agent no later than 30 days following the
receipt of any Net Disposition Proceeds of its or its Subsidiary's good
faith intention to apply such Net Disposition Proceeds to the
acquisition of other assets or property engaged in the conduct of a
Core Business (including by way of merger or Investment) within 365
days following the receipt of such Net Disposition Proceeds, with the
amount of such Net Disposition Proceeds unused after such 365 day
period being applied to the Loans pursuant to SECTION 3.1.2;
(d) shall, no later than five Business Days following the
delivery of the annual audited financial reports required pursuant to
CLAUSE (b) of SECTION 7.1.1 (beginning with the financial reports
delivered in respect of the 1997
45
52
Fiscal Year), deliver to the Facility Agent a calculation of the Excess
Cash Flow for the prior Fiscal Year and, no later than five Business
Days following the delivery of such calculation, make a mandatory
prepayment of the Revolving Loans in an amount equal to 50% of the
Excess Cash Flow (if any) for such Fiscal Year (or in the case of the
1997 Fiscal Year, the portion of such Fiscal Year following the Closing
Date), to be applied as set forth in SECTION 3.1.2; PROVIDED, HOWEVER,
that no such prepayment shall be required to be made to the extent that
the amount of Debt as reduced by giving effect to such prepayment would
result in a Leverage Ratio of 3.00:1 or less as of the end of the
immediately preceding Fiscal Quarter;
(e) shall, concurrently with the receipt of any Net Equity
Proceeds by the Borrower or any of its Subsidiaries, deliver to the
Facility Agent a calculation of the amount of such Net Equity Proceeds,
and no later than five Business Days following the delivery of such
calculation, and, to the extent the aggregate amount of Net Equity
Proceeds received since the Closing Date exceeds $1,000,000, make a
mandatory prepayment of the Revolving Loans in an amount equal to 50%
of such Net Equity Proceeds, to be applied as set forth in SECTION
3.1.2; PROVIDED, HOWEVER, that no such prepayment shall be required to
be made to the extent that the amount of Debt as reduced by giving
effect to such prepayment would result in a Leverage Ratio of 3.00:1 or
less as of the end of the immediately preceding Fiscal Quarter;
(f) shall, concurrently with the receipt of any Net Debt
Proceeds by the Borrower or any of its Subsidiaries, deliver to the
Facility Agent a calculation of the amount of such Net Debt Proceeds,
and no later than five Business Days following the delivery of such
calculation, make a mandatory prepayment of the Revolving Loans in an
amount equal to 100% of such Net Debt Proceeds, to be applied as set
forth in SECTION 3.1.2;
(g) shall, within 60 days following the receipt of any Net
Casualty Proceeds in excess of $100,000 (individually or in the
aggregate over the course of a Fiscal Year), make a mandatory
prepayment of the Loans in an amount equal to 100% of such Net Casualty
Proceeds, to be applied as set forth in SECTION 3.1.2; PROVIDED, that
no mandatory prepayment of Net Casualty Proceeds shall be required
under this CLAUSE (f) if (i) the Borrower notifies the Facility Agent
no later than 60 days following the receipt of such Net Casualty
Proceeds of its or its Subsidiary's good faith intention to apply such
Net Casualty Proceeds to the rebuilding or replacement of such damaged,
destroyed or condemned assets or property and (ii) the Borrower or such
Subsidiary in fact uses such Net Casualty Proceeds to begin rebuilding
or replacing the damaged, destroyed or condemned assets or property
within
46
53
365 days following the receipt of such Net Casualty Proceeds (or, if
such work has not begun within such 365-day period, the Borrower
certifies to the Agents prior to the expiration of such 365-day period,
in a manner satisfactory to the Facility Agent, as to when such work is
expected to begin) and continues diligently to complete such rebuilding
or replacement of such damaged, destroyed or condemned assets or
property within the time reasonably required therefor (the "REBUILDING
AND REPLACEMENT WORK"), with the amount of Net Casualty Proceeds unused
after the completion of such Rebuilding and Replacement Work being
applied to the Loans pursuant to SECTION 3.1.2;
(h) shall, on the Stated Maturity Date of any Loans, repay the
aggregate outstanding principal amount, if any, of such Loans;
(i) shall, on each date when a reduction in the Revolving Loan
Commitment Amount shall become effective pursuant to SECTION 2.2, make
a mandatory prepayment of Revolving Loans and (if necessary) deposit
with the Facility Agent cash collateral for Letter of Credit
Outstandings in an aggregate amount equal to the excess, if any, of the
aggregate outstanding principal amount of all Revolving Loans and
Letter of Credit Outstandings over the Revolving Loan Commitment Amount
as so reduced;
(j) shall, subject to SECTION 3.1.2, make a mandatory
prepayment of 100% of the Term Loans then outstanding upon the
occurrence of a Change of Control;
(k) shall, immediately upon any acceleration of the Stated
Maturity Date of any Term Loans or Obligations pursuant to SECTION 8.2
or SECTION 8.3, repay all Term Loans, unless, pursuant to SECTION 8.3,
only a portion of all Term Loans and Obligations are so accelerated (in
which case the portion so accelerated shall be so prepaid with the
Facility Agent); and
(l) shall, immediately upon any acceleration of the Stated
Maturity Date of any Revolving Loans or Obligations pursuant to SECTION
8.2 or SECTION 8.3, repay all Revolving Loans and provide the Facility
Agent with cash collateral in an amount equal to the Letter of Credit
Outstandings, unless pursuant to SECTION 8.3, only a portion of all
Revolving Loans and Obligations are so accelerated (in which case the
portion so accelerated shall be so prepaid or cash collateralized with
the Facility Agent).
SECTION 3.1.2. APPLICATION. (a) Subject to CLAUSE (b) below, each
prepayment or repayment of the principal of the Loans shall be applied, to the
extent of such prepayment or repayment, FIRST, to the principal amount thereof
being maintained as Base
47
54
Rate Loans, and SECOND, to the principal amount thereof being maintained as LIBO
Rate Loans.
(b) Each prepayment of Loans made pursuant to CLAUSES (c) and (g) of
SECTION 3.1.1 shall be applied PRO RATA to the outstanding principal amount of
all Revolving Loans and Term Loans until all such Loans shall have been paid in
full; PROVIDED, HOWEVER, that, (i) with respect to the amount of any such
prepayment of Term Loans, the Facility Agent will as soon as is practicable (but
in any event no later than the date on which the Borrower has provided such
prepayment to the Facility Agent) provide notice of such prepayment to each Term
Lender prior to the distribution of the funds from such prepayment, and (ii)
each Term Lender will have the right to refuse any such prepayment by giving
written notice of such refusal to the Facility Agent within three Business Days
after such Lender's receipt of notice from the Facility Agent of such
prepayment; PROVIDED that, upon any such election, the Facility Agent shall
apply the amount that otherwise would have prepaid such Lender's Term Loans to
the prepayment of outstanding Revolving Loans (without any corresponding
reduction in the Revolving Loan Commitment Amount). Each voluntary prepayment of
Loans and each prepayment of Loans made pursuant to CLAUSES (d),(e) and (f) of
SECTION 3.1.1 shall be applied to the outstanding principal amount of all
Revolving Loans until all Revolving Loans have been paid in full (without any
corresponding reduction in the Revolving Loan Commitment Amount).
SECTION 3.2. INTEREST PROVISIONS. Interest on the outstanding principal
amount of Loans shall accrue and be payable in accordance with this SECTION 3.2.
SECTION 3.2.1. RATES. Pursuant to an appropriately delivered Borrowing
Request or Continuation/Conversion Notice, the Borrower may elect that Loans
comprising a Borrowing accrue interest at a rate per annum:
(a) on that portion maintained from time to time as a Base
Rate Loan, equal to the sum of the Alternate Base Rate from time to
time in effect plus the Applicable Margin for Base Rate Loans; and
(b) on that portion maintained as a LIBO Rate Loan, during
each Interest Period applicable thereto, equal to the sum of the LIBO
Rate (Reserve Adjusted) for such Interest Period plus the Applicable
Margin for LIBO Rate Loans.
SECTION 3.2.2. POST-MATURITY RATES. After the date any principal amount
of any Loan is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise), or after any other monetary Obligation of the
Borrower (other than overdue Reimbursement Obligations which shall bear interest
as provided in SECTION 2.6.2) shall have become due and payable, the Borrower
48
55
shall pay, but only to the extent permitted by law, interest (after as well as
before judgment) on such amounts at a rate per annum equal to the rate that
would otherwise have been applicable to Base Rate Loans plus 2%.
SECTION 3.2.3. PAYMENT DATES. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
(b) on the date of any optional or required payment or
prepayment, in whole or in part, of principal outstanding on each such
Loan;
(c) with respect to Base Rate Loans, on each Quarterly Payment
Date occurring after the date of the initial Credit Extension
hereunder;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the third-month anniversary of such Interest Period);
(e) with respect to any Base Rate Loans converted into LIBO
Rate Loans on a day when interest would not otherwise have been payable
pursuant to CLAUSE (c), on the date of such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to SECTION 8.2 or SECTION 8.3,
immediately upon such acceleration.
Interest accrued on Loans, Reimbursement Obligations or other monetary
Obligations arising under this Agreement or any other Loan Document after the
date such amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION 3.3. FEES. The Borrower agrees to pay the fees set forth in
this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. COMMITMENT FEE. The Borrower agrees to pay to the
Facility Agent for the account of each Lender that has a Revolving Loan
Commitment, for each day during the period (including any portion thereof when
any of the Lenders' Revolving Loan Commitments are suspended by reason of the
Borrower's inability to satisfy any condition of ARTICLE V) commencing on the
Closing Date and continuing through the Revolving Loan Commitment Termination
Date, a commitment fee equal to such Lender's Percentage of the unused portion
(whether or not then available) of the Revolving Loan Commitment Amount (net of
Letter of Credit Outstandings) for such day at a rate per annum equal to
49
56
the Applicable Commitment Fee for such day. Such commitment fees shall be
payable by the Borrower in arrears on each Quarterly Payment Date, commencing
with the first such day following the Closing Date, and on the Revolving Loan
Commitment Termination Date.
SECTION 3.3.2. AGENTS' AND ARRANGERS' FEES. The Borrower agrees to pay
to the Agents and the Arrangers, for their own respective accounts, fees in the
amounts and on the dates set forth in the Fee Letter.
SECTION 3.3.3. LETTER OF CREDIT FACE AMOUNT FEE. The Borrower agrees to
pay to the Facility Agent, for the account of each Lender that has a Revolving
Loan Commitment, a fee for each Letter of Credit for the period from and
including the date of the issuance of such Letter of Credit to (but not
including) the date upon which such Letter of Credit expires, at a rate per
annum equal to the Applicable Margin for such day for Revolving Loans that are
maintained as LIBO Rate Loans. Such fee shall be payable by the Borrower in
arrears each Quarterly Payment Date, and on the Revolving Loan Commitment
Termination Date for any period then ending for which such fee shall not
theretofore have been paid, commencing on the first such date after the issuance
of such Letter of Credit.
SECTION 3.3.4. LETTER OF CREDIT ISSUING FEE. The Borrower agrees to pay
to the Facility Agent, for the account of the Issuer, an issuing fee for each
Letter of Credit for the period from and including the date of issuance of such
Letter of Credit to (but excluding) the date upon which such Letter of Credit
expires, of.10% per annum of the face amount of such Letter of Credit. Such fee
shall be payable by the Borrower in arrears on each Quarterly Payment Date and
on the Revolving Loan Commitment Termination Date for any period then ending for
which such fee shall not theretofore have been paid, commencing on the first
such date after the issuance of such Letter of Credit.
ARTICLE IV
SECTION 4.1. LIBO RATE LENDING UNLAWFUL. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrower and the Lenders,
be conclusive and binding on the Borrower) that the introduction of or any
change in or in the interpretation of any law makes it unlawful, or any central
bank or other governmental authority asserts that it is unlawful, for such
Lender to make, continue or maintain any Loan as, or to convert any Loan into, a
LIBO Rate Loan of a certain type, the obligations of all Lenders to make,
continue, maintain or convert into any such Loans shall, upon such
determination, forthwith be suspended until such Lender shall notify the
Facility Agent that
50
57
the circumstances causing such suspension no longer exist, and all LIBO Rate
Loans of such type shall automatically convert into Base Rate Loans at the end
of the then current Interest Periods with respect thereto or sooner, if required
by such law or assertion.
SECTION 4.2. DEPOSITS UNAVAILABLE. If the Facility Agent shall have
determined that
(a) Dollar certificates of deposit or Dollar deposits, as the
case may be, in the relevant amount and for the relevant Interest
Period are not available to Bank One in its relevant market; or
(b) by reason of circumstances affecting Bank One's relevant
market, adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans of such type,
then, upon notice from the Facility Agent to the Borrower and the Lenders, the
obligations of all Lenders under SECTION 2.3 and SECTION 2.4 to make or continue
any Loans as, or to convert any Loans into, LIBO Rate Loans of such type shall
forthwith be suspended until the Facility Agent shall notify the Borrower and
the Lenders that the circumstances causing such suspension no longer exist.
SECTION 4.3. INCREASED LIBO RATE LOAN COSTS, ETC. The Borrower agrees
to reimburse each Lender for any increase in the cost to such Lender of, or any
reduction in the amount of any sum receivable by such Lender in respect of,
making, continuing or maintaining (or of its obligation to make, continue or
maintain) any Loans as, or of converting (or of its obligation to convert) any
Loans into, LIBO Rate Loans. Such Lender shall promptly notify the Facility
Agent and the Borrower in writing of the occurrence of any such event, such
notice to state, in reasonable detail, the reasons therefor and the additional
amount required fully to compensate such Lender for such increased cost or
reduced amount. Such additional amounts shall be payable by the Borrower
directly to such Lender within five days of its receipt of such notice, and such
notice shall, in the absence of manifest error, be conclusive and binding on the
Borrower.
SECTION 4.4. FUNDING LOSSES. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan) as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loans on a date other than
51
58
the scheduled last day of the Interest Period applicable thereto,
whether pursuant to SECTION 3.1 or otherwise;
(b) any Loans not being made as LIBO Rate Loans in accordance
with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/ Conversion Notice
therefor,
then, upon the written notice of such Lender to the Borrower (with a copy to the
Facility Agent), the Borrower shall, within five days of its receipt thereof,
pay directly to such Lender such amount as will (in the reasonable determination
of such Lender) reimburse such Lender for such loss or expense. Such written
notice (which shall include calculations in reasonable detail) shall, in the
absence of manifest error, be conclusive and binding on the Borrower.
SECTION 4.5. INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by any Lender or any Person controlling
such Lender, and such Lender determines (in its sole and absolute discretion)
that the rate of return on its or such controlling Person's capital as a
consequence of its Commitments, issuance of or participation in Letters of
Credit or the Loans made by such Lender is reduced to a level below that which
such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Lender to the Borrower, the Borrower shall immediately pay
directly to such Lender additional amounts sufficient to compensate such Lender
or such controlling Person for such reduction in rate of return. A statement of
such Lender as to any such additional amount or amounts (including calculations
thereof in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on the Borrower. In determining such amount, such Lender
may use any method of averaging and attribution that it (in its sole and
absolute discretion) shall deem applicable.
SECTION 4.6. TAXES. (a) All payments by the Borrower of principal of,
and interest on, the Loans and all other amounts payable hereunder shall be made
free and clear of and without deduction for any present or future income,
excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or
other charges of any nature whatsoever imposed by any taxing authority, but
excluding franchise taxes and taxes imposed on or measured by any Lender's net
income or receipts (such non-excluded items being called "TAXES"). In the event
that any
52
59
withholding or deduction from any payment to be made by the Borrower hereunder
is required in respect of any Taxes pursuant to any applicable law, rule or
regulation, then the Borrower will (i) pay directly to the relevant authority
the full amount required to be so withheld or deducted; (ii) promptly forward to
the Facility Agent an official receipt or other documentation satisfactory to
the Facility Agent evidencing such payment to such authority; and (iii) pay to
the Facility Agent for the account of the Lenders such additional amount or
amounts as is necessary to ensure that the net amount actually received by each
Lender will equal the full amount such Lender would have received had no such
withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Facility Agent or any
Lender with respect to any payment received by the Facility Agent or such Lender
hereunder, the Facility Agent or such Lender may pay such Taxes and the Borrower
will promptly pay such additional amounts (including any penalties, interest or
expenses) as is necessary in order that the net amount received by such person
after the payment of such Taxes (including any Taxes on such additional amount)
shall equal the amount such person would have received had not such Taxes been
asserted.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Facility Agent, for the account of the
respective Lenders, the required receipts or other required documentary
evidence, the Borrower shall indemnify the Lenders for any incremental Taxes,
interest or penalties that may become payable by any Lender as a result of any
such failure. For purposes of this SECTION 4.6, a distribution hereunder by the
Facility Agent or any Lender to or for the account of any Lender shall be deemed
a payment by the Borrower.
Upon the request of the Borrower or the Facility Agent, each Lender
that is organized under the laws of a jurisdiction other than the United States
shall, prior to the due date of any payments under the Notes, execute and
deliver to the Borrower and the Facility Agent, on or about the first scheduled
payment date in each Fiscal Year, one or more (as the Borrower or the Facility
Agent may reasonably request) United States Internal Revenue Service Forms 4224
or Forms 1001 or such other forms or documents (or successor forms or
documents), appropriately completed, as may be applicable to establish the
extent, if any, to which a payment to such Lender is exempt from withholding or
deduction of Taxes.
(b) If a Lender or an Agent shall receive a refund (including any
offset or credits from a taxing authority (as a result of any error in the
imposition of Taxes by such taxing authority) of any Taxes paid by the Borrower
pursuant to SECTION 4.6(a) above), such Lender or Agent (as the case may be)
shall
53
60
promptly pay the Borrower the amount so received, with interest from the taxing
authority with respect to such refund.
SECTION 4.7. PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided, all payments by the Borrower pursuant to this Agreement, the Notes or
any other Loan Document shall be made by the Borrower to the Facility Agent for
the PRO RATA account of the Lenders entitled to receive such payment. All such
payments required to be made to the Facility Agent shall be made, without
setoff, deduction or counterclaim, not later than 11:00 a.m., New York time, on
the date due, in same day or immediately available funds, to such account as the
Agent shall specify from time to time by notice to the Borrower. Funds received
after that time shall be deemed to have been received by the Agent on the next
succeeding Business Day. The Agent shall promptly remit in same day funds to
each Lender its share, if any, of such payments received by the Agent for the
account of such Lender. All interest and fees shall be computed on the basis of
the actual number of days (including the first day but excluding the last day)
occurring during the period for which such interest or fee is payable over a
year comprised of 360 days (or, in the case of interest on a Base Rate Loan
(other than when calculated with respect to the Federal Funds Rate), 365 days
or, if appropriate, 366 days). Whenever any payment to be made shall otherwise
be due on a day which is not a Business Day, such payment shall (except as
otherwise required by CLAUSE (c) of the definition of the term "INTEREST PERIOD"
with respect to LIBO Rate Loans) be made on the next succeeding Business Day and
such extension of time shall be included in computing interest and fees, if any,
in connection with such payment.
SECTION 4.8. SHARING OF PAYMENTS. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan (other than pursuant to the terms of
SECTIONS 4.3, 4.4 and 4.5) or Letter of Credit in excess of its PRO RATA share
of payments then or therewith obtained by all Lenders, such Lender shall
purchase from the other Lenders such participations in Loans made by them and/or
Letters of Credit as shall be necessary to cause such purchasing Lender to share
the excess payment or other recovery ratably with each of them; PROVIDED,
HOWEVER, that if all or any portion of the excess payment or other recovery is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and each Lender which has sold a participation to the purchasing
Lender shall repay to the purchasing Lender the purchase price to the ratable
extent of such recovery together with an amount equal to such selling Lender's
ratable share (according to the proportion of
(a) the amount of such selling Lender's required repayment to
the purchasing Lender
to
--
54
61
(b) the total amount so recovered from the purchasing Lender)
of any interest or other amount paid or payable by the purchasing Lender in
respect of the total amount so recovered. The Borrower agrees that any Lender so
purchasing a participation from another Lender pursuant to this Section may, to
the fullest extent permitted by law, exercise all its rights of payment
(including pursuant to SECTION 4.9) with respect to such participation as fully
as if such Lender were the direct creditor of the Borrower in the amount of such
participation. If under any applicable bankruptcy, insolvency or other similar
law, any Lender receives a secured claim in lieu of a setoff to which this
Section applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the rights
of the Lenders entitled under this Section to share in the benefits of any
recovery on such secured claim.
SECTION 4.9. SETOFF. Each Lender shall, upon the occurrence of any
Default described in CLAUSES (a) through (d) of SECTION 8.1.9, or, with the
consent of the Required Lenders, upon the occurrence of any other Event of
Default, have the right to appropriate and apply to the payment of the
Obligations owing to it (whether or not then due), and (as security for such
Obligations) the Borrower hereby grants to each Lender a continuing security
interest in, any and all balances, credits, deposits, accounts or moneys of the
Borrower then or thereafter maintained with or otherwise held by such Lender;
PROVIDED, HOWEVER, that any such appropriation and application shall be subject
to the provisions of SECTION 4.8. Each Lender agrees promptly to notify the
Borrower and the Agent after any such setoff and application made by such
Lender; PROVIDED, HOWEVER, that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of each Lender under
this Section are in addition to other rights and remedies (including other
rights of setoff under applicable law or otherwise) which such Lender may have.
SECTION 4.10. REPLACEMENT OF LENDERS. Each Lender hereby severally
agrees as set forth in this Section. If any Lender (a "SUBJECT LENDER") makes
demand upon the Borrower for (or if the Borrower is otherwise required to pay)
amounts pursuant to SECTION 4.2, 4.3, 4.5 or 4.6, or gives notice pursuant to
SECTION 4.1 requiring a conversion of such Subject Lender's LIBO Rate Loans to
Base Rate Loans or suspending such Lender's obligation to make Loans as, or to
convert Loans into, LIBO Rate Loans, the Borrower may, within 90 days of receipt
by the Borrower of such demand or notice (or the occurrence of such other event
causing the Borrower to be required to pay such compensation), as the case may
be, give notice (a "REPLACEMENT NOTICE") in writing to the Agents and such
Subject Lender of its intention to replace such Subject Lender with a financial
institution (a "REPLACEMENT
55
62
LENDER") designated in such Replacement Notice. If the Agents shall, in the
exercise of their reasonable discretion and within 30 days of their receipt of
such Replacement Notice, notify the Borrower and such Subject Lender in writing
that the designated financial institution is satisfactory to the Agents (such
consent not being required where the Replacement Lender is already a Lender),
then such Subject Lender shall, subject to the payment of any amounts due
pursuant to SECTION 4.4, assign, in accordance with SECTION 10.11.1, all of its
Commitments, Loans, Notes and other rights and obligations under this Agreement
and all other Loan Documents (including, without limitation, Reimbursement
Obligations) to such designated financial institution; PROVIDED, HOWEVER, that
(i) such assignment shall be without recourse, representation or warranty and
shall be on terms and conditions reasonably satisfactory to such Subject Lender
and such designated financial institution and (ii) the purchase price paid by
such designated financial institution shall be in the amount of such Subject
Lender's Loans and its Percentage of outstanding Reimbursement Obligations,
together with all accrued and unpaid interest and fees in respect thereof, plus
all other amounts (including the amounts demanded and unreimbursed under
SECTIONS 4.2, 4.3, 4.5 and 4.6), owing to such Subject Lender hereunder. Upon
the effective date of an assignment described above, the Borrower shall issue a
replacement Note or Notes, as the case may be, to such designated financial
institution or Replacement Lender, as applicable, and such institution shall
become a "Lender" for all purposes under this Agreement and the other Loan
Documents.
SECTION 4.11. USE OF PROCEEDS. The Borrower shall apply the proceeds of
each Borrowing in accordance with SECTION 7.1.10; without limiting the
foregoing, no proceeds of any Loan will be used to acquire any equity security
of a class which is registered pursuant to Section 12 of the Securities Exchange
Act of 1934 or any "margin stock", as defined in F.R.S. Board Regulation U.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. INITIAL CREDIT EXTENSION. The obligations of the Lenders
and, if applicable, the Issuer to make the initial Credit Extension shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this SECTION 5.1.
SECTION 5.1.1. RESOLUTIONS, ETC. The Agents shall have received from
each Obligor a certificate, dated the date of the initial Credit Extension, of
its Secretary or Assistant Secretary as to (i) resolutions of its Board of
Directors then in full force and effect authorizing the execution, delivery and
56
63
performance of this Agreement, the Notes and each other Loan Document to be
executed by it; and (ii) the incumbency and signatures of those of its officers
authorized to act with respect to this Agreement, the Notes and each other Loan
Document executed by it, upon which certificate each Lender may conclusively
rely until it shall have received a further certificate of the Secretary of such
Obligor canceling or amending such prior certificate.
SECTION 5.1.2. DELIVERY OF NOTES. The Agents shall have received, for
the account of each Lender, its Notes duly executed and delivered by the
Borrower.
SECTION 5.1.3. TRANSACTION CONSUMMATED. The Agents shall have received
evidence satisfactory to each of them that all actions necessary to consummate
the Transaction shall have been taken or completed in accordance with law and
the Transaction Documents, and the Transaction shall be consummated for an
aggregate amount not to exceed $130,000,000 (including any amounts necessary to
pay related reasonable fees and expenses, which shall not exceed $5,000,000).
SECTION 5.1.4. PAYMENT OF OUTSTANDING INDEBTEDNESS, ETC. All
Indebtedness identified in ITEM 7.2.2(b) ("Indebtedness to be Paid") of the
Disclosure Schedule, together with all interest, all prepayment premiums and
other amounts due and payable with respect thereto, shall have been paid in full
(including, to the extent necessary, from proceeds of the initial Credit
Extension); and all Liens securing payment of any such Indebtedness have been
released and the Agents shall have received all Uniform Commercial Code Form
UCC-3 termination statements or other instruments as may be suitable or
appropriate in connection therewith.
SECTION 5.1.5. SUBSIDIARY GUARANTY. The Agents shall have received the
Subsidiary Guaranty, dated the date hereof, duly executed by each U.S.
Subsidiary of the Borrower in existence on the date of the initial Credit
Extension (after giving effect to the Transaction).
SECTION 5.1.6. CLOSING DATE CERTIFICATE. The Agents shall have
received, with counterparts for each Lender, the Closing Date Certificate,
substantially in the form of EXHIBIT G hereto, dated the date of the initial
Credit Extension and duly executed and delivered by an Authorized Officer of the
Borrower, in which certificate the Borrower shall agree and acknowledge that the
statements made therein shall be deemed to be true and correct representations
and warranties of the Borrower made as of such date under this Agreement, and,
at the time such certificate is delivered, such statements shall in fact be true
and correct in all material respects.
57
64
SECTION 5.1.7. TRANSACTION DOCUMENTS, ETC. The Agents shall have
received (with copies for each Lender that shall have expressly requested copies
thereof) copies of fully executed copies of the Transaction Documents, certified
to be true and complete copies thereof by an Authorized Officer of the Borrower.
The Transactions Documents shall be in full force and effect and shall not have
been modified or waived in any material respect, nor shall there have been any
forbearance to exercise any material rights with respect to any of the terms or
provisions relating to the conditions to the consummation of the Transaction as
set forth in the Transaction Documents unless otherwise agreed to by the
Required Lenders.
SECTION 5.1.8. PLEDGE AGREEMENTS. The Agents shall have received
executed counterparts of
(a) the Borrower Pledge Agreement, dated as of the date
hereof, duly executed by an Authorized Officer of the Borrower,
together with the certificates evidencing all of the issued and
outstanding shares of Capital Stock of each Subsidiary of the Borrower
(after giving effect to the Transaction) pledged pursuant to the
Borrower Pledge Agreement, which certificates shall in each case be
accompanied by undated stock powers duly executed in blank; and
(b) the Subsidiary Pledge Agreement, dated as of the date
hereof, duly executed by an Authorized Officer of each Subsidiary of
the Borrower (after giving effect to the Transaction) which in turn has
any Subsidiary or Subsidiaries, together with the certificates
evidencing all of the issued and outstanding shares of Capital Stock of
each such indirect Subsidiary of such Person which shall be pledged
pursuant to such Subsidiary Pledge Agreement, which certificates shall
in each case be accompanied by undated stock powers duly executed in
blank;
PROVIDED, HOWEVER, that the Borrower and its U.S. Subsidiaries shall only be
required to pledge not in excess of 65% of the outstanding voting Capital Stock
of any direct Non-U.S. Subsidiary. If any securities pledged pursuant to a
Pledge Agreement are uncertificated securities, the Agents shall have received
confirmation and evidence satisfactory to each of them that appropriate book
entries have been made in the relevant books or records of a financial
intermediary or the issuer of such securities, as the case may be, or other
appropriate steps have been taken under applicable law resulting in the
perfection of the security interest granted in favor of the Facility Agent in
such securities pursuant to the terms of the applicable Pledge Agreement.
SECTION 5.1.9. SECURITY AGREEMENTS. The Agents shall have received
executed counterparts of the Borrower Security Agreement
58
65
and the Subsidiary Security Agreement, each dated as of the date hereof, duly
executed by the Borrower and each of its U.S. Subsidiaries (after giving effect
to the Transaction) together with
(a) executed copies of properly completed Uniform Commercial
Code financing statements (Form UCC-1), naming the Borrower and each
such Subsidiary as the debtor and the Facility Agent as the secured
party, or other similar instruments or documents, to be filed under the
Uniform Commercial Code of all jurisdictions (other than those
jurisdictions where (x) neither the Borrower nor such Subsidiary is
qualified to do business as a foreign corporation, (y) no collateral
described in the Security Agreement is located on the Closing Date and
(z) the filing of such Form UCC-1 would result in material increased
tax or similar liabilities to the Borrower or such Subsidiary) as may
be necessary or, in the opinion of the Agents, desirable to perfect the
security interest of the Facility Agent pursuant to the Security
Agreements;
(b) executed copies of proper Uniform Commercial Code Form
UCC-3 termination statements, if any, necessary to release all Liens
and other rights of any Person
(i) in any collateral described in the Security
Agreements previously granted by any Person, and
(ii) securing any of the Indebtedness identified in
ITEM 7.2.2(b) ("Indebtedness to be Paid") of the Disclosure
Schedule,
together with such other Uniform Commercial Code Form UCC-3 termination
statements as the Agents may reasonably request from such Obligors; and
(c) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report
certified by a party acceptable to the Agents, dated a date reasonably
near to the date of the initial Credit Extension, listing all effective
financing statements which name the Borrower or such Subsidiary (under
their present names and any previous names) as the debtor and which are
filed in the jurisdictions in which filings were made pursuant to
CLAUSE (A) above, together with copies of such financing statements
(none of which (other than those described in CLAUSE (a), if such Form
UCC-11 or search report, as the case may be, is current enough to list
such financing statements described in CLAUSE (a)) shall cover any
collateral described in the Security Agreements).
SECTION 5.1.10. FINANCIAL INFORMATION, ETC. The Agents shall have
received, with counterparts for each Lender,
59
66
(a) (i) the audited consolidated income and cash flow
statements and balance sheets of the Borrower and its Subsidiaries for
each of the Fiscal Years ended December 31, 1994, December 31, 1995 and
December 31, 1996; (ii) the audited consolidated income and cash flow
statements and balance sheets of ▇▇▇▇▇▇ and its Subsidiaries for each
of the Fiscal Years ended August 31, 1994, August 31, 1995 and August
31, 1996; (iii) the unaudited consolidated income and cash flow
statements and balance sheets of (x) the Borrower and its Subsidiaries
for the first and second Fiscal Quarters of 1997 and (y) ▇▇▇▇▇▇ and its
Subsidiaries for the first, second and third Fiscal Quarters of 1997;
and (iv) the most recently available unaudited consolidated monthly
income and cash flow statements and balance sheets of (x) the Borrower
and its Subsidiaries for each Fiscal Month ended since the end of the
second Fiscal Quarter of 1997 and (y) ▇▇▇▇▇▇ and its Subsidiaries for
each Fiscal Month ended since the end of the third Fiscal Quarter of
1997;
(b) a PRO FORMA opening consolidated balance sheet of the
Borrower and its Subsidiaries as of the Closing Date (the "PRO FORMA
BALANCE SHEET"), certified by an Authorized Officer of the Borrower,
giving effect to the consummation of the Transaction contemplated by
this Agreement and reflecting the proposed legal and capital structure
of the Borrower, which legal and capital structure shall be
satisfactory in all respects to the Agents; and
(c) a Borrowing Base Certificate calculated as of August 22,
1997 (as to the Borrower) and August 31, 1997 (as to ▇▇▇▇▇▇).
SECTION 5.1.11. SOLVENCY, ETC. The Agents shall have received a
Solvency Certificate in substantially the form of EXHIBIT L, duly executed by an
Authorized Officer of the Borrower, dated the date of the initial Credit
Extension.
SECTION 5.1.12. LITIGATION. There shall exist no pending or threatened
material litigation, proceedings or investigations which (x) would contest the
consummation of the Transaction or (y) could reasonably be expected to have a
Material Adverse Effect.
SECTION 5.1.13. MATERIAL ADVERSE EFFECT. Since December 31, 1996, there
shall not have been any event, circumstance or condition which could reasonably
be expected to have a Material Adverse Effect.
SECTION 5.1.14. INSURANCE. The Agents shall have received satisfactory
evidence of the existence of insurance in compliance with SECTION 7.1.4
(including all endorsements included therein), and the Facility Agent shall be
named additional insured or loss payee, on behalf of the Lenders, in respect of
all proceeds
60
67
payable in respect of such insurance, pursuant to documentation reasonably
satisfactory to the Agents.
SECTION 5.1.15. OPINIONS OF COUNSEL. The Agents shall have received
opinions, dated the date of the initial Credit Extension and addressed to the
Agents and all Lenders, from
(a) Cravath, Swaine & ▇▇▇▇▇, special counsel to the Obligors,
substantially in the form of EXHIBIT M-1 hereto; and
(b) ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, local counsel to the Obligors,
substantially in the form of EXHIBIT M-2 hereto.
SECTION 5.1.16. CLOSING FEES, EXPENSES, ETC. The Agents and the
Arrangers shall have received, each for its own respective account, or, in the
case of the Facility Agent, for the account of each Lender, as the case may be,
all fees, costs and expenses due and payable to the Agents, the Arrangers and
the Lenders, including pursuant to SECTIONS 3.3 and 10.3, if then invoiced.
SECTION 5.2. ALL CREDIT EXTENSIONS. The obligation of each Lender and,
if applicable, the Issuer, to make any Credit Extension (including the initial
Credit Extension) shall be subject to the satisfaction of each of the conditions
precedent set forth in this SECTION 5.2.
SECTION 5.2.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before
and after giving effect to any Credit Extension (but, if any Default of the
nature referred to in SECTION 8.1.5 shall have occurred with respect to any
other Indebtedness, without giving effect to the application, directly or
indirectly, of the proceeds of any Credit Extension) the following statements
shall be true and correct
(a) the representations and warranties set forth in ARTICLE VI
(excluding, however, those contained in SECTION 6.7) and in each other
Loan Document shall in each case be true and correct in all material
respects with the same effect as if then made (unless stated to relate
solely to an early date, in which case such representations and
warranties shall be true and correct in all material respects as of
such earlier date);
(b) except as disclosed by the Borrower to the Agent and the
Lenders pursuant to SECTION 6.7
(i) no labor controversy, litigation, arbitration or
governmental investigation or proceeding shall be pending or,
to the knowledge of the Borrower, threatened against the
Borrower or any of its
61
68
Subsidiaries which could reasonably be expected to have a
Material Adverse Effect; and
(ii) no development shall have occurred in any labor
controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to SECTION 6.7
which could reasonably be expected to have a Material Adverse
Effect;
(c) the sum of the (A) aggregate outstanding principal amount
of all Revolving Loans and (B) the aggregate amount of all Letter of
Credit Outstandings does not exceed the lesser of (x) the then existing
Revolving Loan Commitment Amount and (y) the then applicable Borrowing
Base Amount; and
(d) no Default shall have then occurred and be continuing, and
neither the Borrower, any other Obligor, nor any of its Subsidiaries
are in material violation of any law or governmental regulation or
court order or decree.
SECTION 5.2.2. CREDIT EXTENSION REQUEST. The Agents shall have received
a Borrowing Request or Issuance Request, as the case may be, for such Credit
Extension. Each of the delivery of a Borrowing Request or an Issuance Request
and the acceptance by the Borrower of the proceeds of the Borrowing or the
issuance of the Letter of Credit, as applicable, shall constitute a
representation and warranty by the Borrower that on the date of such Borrowing
(both immediately before and after giving effect to such Borrowing and the
application of the proceeds thereof) or the issuance of the Letter of Credit, as
applicable, the statements made in SECTION 5.2.1 are true and correct.
SECTION 5.2.3. SATISFACTORY LEGAL FORM. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be satisfactory in form and substance
to the Agents and their counsel; the Agents and their counsel shall have
received all information, approvals, opinions, documents or instruments as the
Agents or their counsel may reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Issuer and the Agents to enter into
this Agreement and to make Loans and issue (or participate in) Letters of Credit
hereunder, the Borrower represents and warrants unto the Agents, the Issuer and
each Lender as set forth in this ARTICLE VI.
62
69
SECTION 6.1. ORGANIZATION, ETC. The Borrower and each of its
Subsidiaries is a corporation validly organized and existing and in good
standing under the laws of the State of its incorporation, is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction where the nature of its business requires such qualification,
except where the failure to be so qualified or in good standing could not
reasonably be expected to have a Material Adverse Effect, and has full power and
authority and holds all requisite governmental licenses, permits and other
approvals to enter into and perform its Obligations under this Agreement, the
Notes and each other Loan Document to which it is a party and to own and hold
under lease its property and to conduct its business substantially as currently
conducted by it.
SECTION 6.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by the Borrower of this Agreement, the Notes and each
other Loan Document executed or to be executed by it, and the execution,
delivery and performance by each other Obligor of each Loan Document executed or
to be executed by it and the Borrower's and each such other Obligor's
participation in the consummation of the Transaction are within the Borrower's
and each such Obligor's corporate powers, have been duly authorized by all
necessary corporate action, and do not
(a) contravene the Borrower's or any such Obligor's Organic
Documents;
(b) contravene any contractual restriction, law or
governmental regulation or court decree or order binding on or
affecting the Borrower or any such Obligor; or
(c) result in, or require the creation or imposition of, any
Lien on any of any Obligor's properties (other than any Lien permitted
under SECTION 7.2.3 or SECTION 7.3.3).
SECTION 6.3. GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the due execution,
delivery or performance by the Borrower or any other Obligor of this Agreement,
the Notes or any other Loan Document to which it is a party, or for the
Borrower's and each such other Obligor's participation in the consummation of
the Transaction, except as have been duly obtained or made and are in full force
and effect. Neither the Borrower nor any of its Subsidiaries is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
63
70
SECTION 6.4. VALIDITY, ETC. This Agreement constitutes, and the Notes
and each other Loan Document executed by the Borrower will, on the due execution
and delivery thereof, constitute, the legal, valid and binding obligations of
the Borrower enforceable in accordance with their respective terms; and each
Loan Document executed pursuant hereto by each other Obligor will, on the due
execution and delivery thereof by such Obligor, be the legal, valid and binding
obligation of such Obligor enforceable in accordance with its terms.
SECTION 6.5. FINANCIAL INFORMATION. The balance sheets of ▇▇▇▇▇▇, the
Borrower and each of their respective Subsidiaries, and the related consolidated
statements of income and cash flow of ▇▇▇▇▇▇, the Borrower and each of their
respective Subsidiaries (other than the Pro Forma Balance Sheet), copies of
which have been furnished to the Agents and each Lender, have been prepared in
accordance with GAAP consistently applied, and present fairly the consolidated
financial condition of the corporations covered thereby as at the dates thereof
and the results of their operations for the periods then ended (subject to
normal audit adjustments and to variations disclosed in the notes to such
financial statements).
SECTION 6.6. NO MATERIAL ADVERSE EFFECT. Since December 31, 1996, there
has been no event, circumstance or condition which could reasonably be expected
to have a Material Adverse Effect.
SECTION 6.7. LITIGATION, LABOR CONTROVERSIES, ETC. There is no pending
or, to the knowledge of the Borrower, threatened litigation, action, proceeding,
or labor controversy affecting the Borrower or any of its Subsidiaries, or any
of their respective properties, businesses, assets or revenues, which could
reasonably be expected to have a Material Adverse Effect, except as disclosed in
ITEM 6.7 ("Litigation") of the Disclosure Schedule.
SECTION 6.8. SUBSIDIARIES. The Borrower has no Subsidiaries, except
those Subsidiaries
(a) which are identified in ITEM 6.8 ("Existing Subsidiaries")
of the Disclosure Schedule; or
(b) which are permitted to have been acquired in accordance
with SECTION 7.2.5 or 7.2.9.
SECTION 6.9. OWNERSHIP OF PROPERTIES. The Borrower and each of its
Subsidiaries owns good and marketable title to all of its properties and assets,
real and personal, tangible and intangible, of any nature whatsoever (including
patents, trademarks, trade names, service marks and copyrights), free and clear
of all Liens, charges or claims (including infringement
64
71
claims with respect to patents, trademarks, copyrights and the like) except as
permitted pursuant to SECTION 7.2.3.
SECTION 6.10. TAXES. The Borrower and each of its Subsidiaries has
filed all material tax returns and reports required by law to have been filed by
it and has paid all taxes and governmental charges thereby shown to be owing,
except any such taxes or charges which are being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books.
SECTION 6.11. PENSION AND WELFARE PLANS. During the
twelve-consecutive-month period prior to the date of the execution and delivery
of this Agreement and prior to the date of any Borrowing hereunder, no steps
have been taken to terminate any Pension Plan, and no contribution failure has
occurred with respect to any Pension Plan sufficient to give rise to a Lien
under section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which might result in the incurrence
by the Borrower or any member of the Controlled Group of any material liability,
fine or penalty. Except as disclosed in ITEM 6.11 ("Employee Benefit Plans") of
the Disclosure Schedule, neither the Borrower nor any member of the Controlled
Group has any contingent liability with respect to any post-retirement benefit
under a Welfare Plan, other than liability for continuation coverage described
in Part 6 of Title I of ERISA.
SECTION 6.12. ENVIRONMENTAL WARRANTIES. Except as set forth in ITEM
6.12 ("Environmental Matters") of the Disclosure Schedule or as to such matters
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower or any of its Subsidiaries
have been, and continue to be, owned or leased by the Borrower and its
Subsidiaries in compliance with all Environmental Laws;
(b) there have been no past, and there are no pending or (to
the best knowledge of the Borrower) threatened
(i) claims, complaints, notices or requests for
information received by the Borrower or any of its
Subsidiaries with respect to any alleged violation of any
Environmental Law, or
(ii) complaints, notices or inquiries to the Borrower
or any of its Subsidiaries regarding potential liability under
any Environmental Law;
65
72
(c) there have been no Releases of Hazardous Materials at, on
or under any property now or previously owned or leased by the Borrower
or any of its Subsidiaries;
(d) the Borrower and its Subsidiaries have been issued and are
in compliance with all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and necessary
for their businesses;
(e) no property now or previously owned or leased by the
Borrower or any of its Subsidiaries is listed or proposed for listing
(with respect to owned property only) on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list of
sites requiring investigation or clean-up;
(f) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under any property
now or previously owned or leased by the Borrower or any of its
Subsidiaries;
(g) neither Borrower nor any Subsidiary of the Borrower has
directly transported or directly arranged for the transportation of any
Hazardous Material to any location which is listed or proposed for
listing on the National Priorities List pursuant to CERCLA, on the
CERCLIS or on any similar state list or which is the subject of
federal, state or local enforcement actions or other investigations
which may lead to material claims against the Borrower or such
Subsidiary thereof for any remedial work, damage to natural resources
or personal injury, including claims under CERCLA;
(h) there are no polychlorinated biphenyls or friable asbestos
present at any property now or previously owned or leased by the
Borrower or any Subsidiary of the Borrower; and
(i) no conditions exist at, on or under any property now or
previously owned or leased by the Borrower which, with the passage of
time, or the giving of notice or both, would give rise to liability
under any Environmental Law.
SECTION 6.13. REGULATIONS G, U AND X. The Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock, and no proceeds of any Loans will be used for a purpose which
violates, or would be inconsistent with, F.R.S. Board Regulation G, U or X.
Terms for which meanings are provided in F.R.S. Board Regulation G, U or X or
any regulations substituted therefor, as from time to time in effect, are used
in this Section with such meanings.
SECTION 6.14. ACCURACY OF INFORMATION. All factual information
heretofore or contemporaneously furnished by or on
66
73
behalf of the Borrower in writing to the Agents, the Arrangers or any Lender for
purposes of or in connection with this Agreement or any transaction contemplated
hereby or with respect to the Transaction is, and all other such factual
information hereafter furnished by or on behalf of the Borrower to the Agents,
the Arrangers or any Lender will be, taken as a whole, true and accurate in
every material respect on the date as of which such information is dated or
certified and as of the date of execution and delivery of this Agreement by the
Agents and each such Lender, and such information is not, or shall not be, as
the case may be, taken as a whole, incomplete by omitting to state any material
fact necessary to make such information not misleading.
SECTION 6.15. SOLVENCY. The Transaction (including the incurrence of
the initial Credit Extension hereunder, the execution and delivery by the
Subsidiary Guarantors of the Subsidiary Guaranty and the application of the
proceeds of the Credit Extensions), will not involve or result in any fraudulent
transfer or fraudulent conveyance under the provisions of Section 548 of the
Bankruptcy Code (11 U.S.C. Section 101 ET SEQ., as from time to time hereafter
amended, and any successor or similar statute) or any applicable state law
respecting fraudulent transfers or fraudulent conveyances. On the Closing Date,
after giving effect to the Transaction, the Borrower and each Subsidiary
Guarantor is Solvent.
ARTICLE VII
COVENANTS
SECTION 7.1. AFFIRMATIVE COVENANTS. The Borrower agrees with the
Agents, the Issuer and each Lender that, until all Commitments have terminated
and all Obligations have been paid and performed in full, the Borrower will
perform the obligations set forth in this SECTION 7.1.
SECTION 7.1.1. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. The
Borrower will furnish, or will cause to be furnished, to each Lender and each
Agent copies of the following financial statements, reports, notices and
information:
(a) as soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
of the Borrower, a consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such Fiscal Quarter and a consolidated
statement of income and cash flow of the Borrower and its Subsidiaries
for such Fiscal Quarter and for the period commencing at the end of the
previous Fiscal Year and ending with the end of such Fiscal Quarter,
certified by an Authorized Officer of the Borrower;
67
74
(b) as soon as available and in any event within 90 days after
the end of each Fiscal Year of the Borrower, a copy of the annual audit
report for such Fiscal Year for the Borrower and its Subsidiaries,
including therein consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as of the end of such Fiscal Year and
consolidated and consolidating statements of income and cash flow of
the Borrower and its Subsidiaries for such Fiscal Year, in each case
certified (without any Impermissible Qualification) in a manner
reasonably acceptable to the Agents and the Required Lenders by an
independent public accountant reasonably acceptable to the Agents and
the Required Lenders, together with a report from such accountants
containing a computation of, and showing compliance with, each of the
financial ratios and restrictions contained in SECTION 7.2.4 and
SECTION 7.3.2 and to the effect that, in making the examination
necessary for the signing of such annual report by such accountants,
they have not become aware of any Default that has occurred and is
continuing, or, if they have become aware of such Default, describing
such Default and the steps, if any, being taken to cure it;
(c) as soon as available and in any event within 45 days after
the end of each Fiscal Quarter, a certificate, executed by an
Authorized Officer of the Borrower, showing (in reasonable detail and
with appropriate calculations and computations in all respects
satisfactory to the Agents) compliance with the financial convenants
set forth in SECTION 7.2.4 and SECTION 7.3.2;
(d) as soon as possible and in any event within three days
after the occurrence of each Default, a statement of an Authorized
Officer of the Borrower setting forth details of such Default and the
action which the Borrower has taken and proposes to take with respect
thereto;
(e) as soon as possible and in any event within three days
after (x) the occurrence of any material adverse development with
respect to any material litigation, action, proceeding, or labor
controversy described in SECTION 6.7 or (y) the commencement of any
labor controversy, litigation, action, proceeding of the type described
in SECTION 6.7, notice thereof and copies of all documentation relating
thereto;
(f) promptly after the sending or filing thereof, copies of
all reports and registration statements which the Borrower or any of
its Subsidiaries files with the Securities and Exchange Commission or
any national securities exchange;
68
75
(g) immediately upon becoming aware of the institution of any
steps by the Borrower or any other Person to terminate any Pension
Plan, or the failure to make a required contribution to any Pension
Plan if such failure is sufficient to give rise to a Lien under section
302(f) of ERISA, or the taking of any action with respect to a Pension
Plan which could result in the requirement that the Borrower furnish a
bond or other security to the PBGC or such Pension Plan, or the
occurrence of any event with respect to any Pension Plan which could
result in the incurrence by the Borrower of any material liability,
fine or penalty, or any material increase in the contingent liability
of the Borrower with respect to any post-retirement Welfare Plan
benefit, notice thereof and copies of all documentation relating
thereto;
(h) within 15 days after the end of each calendar month, a
Borrowing Base Certificate that is calculated as of the last day of
such calendar month;
(i) promptly when available and in any event within 120 days
following the end of each Fiscal Year, a budget for the next Fiscal
Year, prepared in reasonable detail by an Authorized Officer of the
Borrower; and
(j) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Facility Agent may from time to
time reasonably request.
SECTION 7.1.2. COMPLIANCE WITH LAWS, ETC. The Borrower will, and will
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include
(without limitation):
(a) the maintenance and preservation of its corporate
existence and qualification as a foreign corporation in each
jurisdiction in which such qualification is required; and
(b) the payment, before the same become delinquent, of all
taxes, assessments and governmental charges imposed upon it or upon its
property except to the extent being diligently contested in good faith
by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books.
SECTION 7.1.3. MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each of its Subsidiaries to, maintain, preserve, protect and keep its
properties in good repair, working order and condition, and make necessary and
proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times unless the Borrower
determines in good faith that the continued
69
76
maintenance of any of its properties is no longer economically desirable.
SECTION 7.1.4. INSURANCE. The Borrower will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained with responsible insurance
companies insurance with respect to its properties and business against such
casualties and contingencies and of such types and in such amounts as is
customary in the case of similar businesses and with such provisions and
endorsements as the Agents may reasonably request and will, upon request of the
Agents, furnish to the Agents and each Lender a certificate of an Authorized
Officer of the Borrower setting forth the nature and extent of all insurance
maintained by the Borrower and its Subsidiaries in accordance with this Section.
SECTION 7.1.5. BOOKS AND RECORDS. The Borrower will, and will cause
each of its Subsidiaries to, keep books and records which accurately reflect all
of its business affairs and transactions and permit the Agents, the Issuer and
each Lender or any of their respective representatives, at reasonable times and
intervals, to visit all of its offices, to discuss its financial matters with
its officers and independent public accountant (and the Borrower hereby
authorizes such independent public accountant to discuss the Borrower's
financial matters with the Agents, the Issuer and each Lender or their
representatives whether or not any representative of the Borrower is present)
and to examine (and, at the expense of the Borrower, photocopy extracts from)
any of its books or other corporate records. The Borrower shall pay any fees of
such independent public accountant incurred in connection with the Issuer's, any
Agent's or any Lender's exercise of its rights pursuant to this Section.
SECTION 7.1.6. ENVIRONMENTAL COVENANT. The Borrower will, and will
cause each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in
material compliance with all Environmental Laws, keep all necessary
permits, approvals, certificates, licenses and other authorizations
relating to environmental matters in effect and remain in material
compliance therewith, and handle all Hazardous Materials in material
compliance with all applicable Environmental Laws;
(b) immediately notify the Agents and provide copies upon
receipt of all material written claims, complaints, notices or
inquiries relating to the condition of its facilities and properties or
compliance with Environmental Laws; and
(c) provide such information and certifications which the
Agents may reasonably request from time to time to evidence compliance
with this SECTION 7.1.6.
70
77
SECTION 7.1.7. FUTURE SUBSIDIARIES. Upon any Person becoming, after the
Closing Date, a Subsidiary of the Borrower, or upon the Borrower or any
Subsidiary of the Borrower acquiring additional Capital Stock of any existing
Subsidiary, the Borrower shall notify the Agents of such acquisition, and
(a) the Borrower shall promptly cause such Subsidiary to
execute and deliver to the Agents, with counterparts for each Lender, a
supplement to the Guaranty and a supplement to the Subsidiary Security
Agreement (and, if such Subsidiary owns any real property with a fair
market value in excess of $100,000, a Mortgage), together with
acknowledgment copies of Uniform Commercial Code financing statements
(Form UCC-1) executed and delivered by the Subsidiary naming the
Subsidiary as the debtor and the Facility Agent as the secured party,
or other similar instruments or documents, filed under the Uniform
Commercial Code and any other applicable recording statutes, in the
case of real property, of all jurisdictions as may be necessary or, in
the reasonable opinion of the Agents, desirable to perfect the security
interest of the Facility Agent pursuant to the Subsidiary Security
Agreement or a Mortgage, as the case may be; and
(b) the Borrower shall promptly deliver, or cause to be
delivered, to the Facility Agent under a Pledge Agreement (or a
supplement thereto) certificates (if any) representing all of the
issued and outstanding shares of Capital Stock of such Subsidiary owned
by the Borrower or any Subsidiary of the Borrower, as the case may be,
along with undated stock powers for such certificates, executed in
blank, or, if any securities subject thereto are uncertificated
securities, confirmation and evidence satisfactory to the Agents that
appropriate book entries have been made in the relevant books or
records of a financial intermediary or the issuer of such securities,
as the case may be, or other appropriate steps shall have been taken
under applicable law resulting in the perfection of the security
interest granted in favor of the Facility Agent pursuant to the terms
of a Pledge Agreement;
together, in each case, with such opinions, in form and substance and from
counsel reasonably satisfactory to the Agents, as the Agents may reasonably
require; PROVIDED, HOWEVER, that notwithstanding the foregoing, (x) no Non-U.S.
Subsidiary shall be required to execute and deliver a Mortgage, a supplement to
the Guaranty or a supplement to the Security Agreement, and (y) the Borrower or
any U.S. Subsidiary of the Borrower shall only be required to deliver in pledge
pursuant to a Pledge Agreement not in excess of 65% of the total combined voting
power of all classes of Capital Stock of a direct Non-U.S. Subsidiary entitled
to vote.
71
78
(a) SECTION FUTURE LEASED PROPERTY AND FUTURE ACQUISITIONS OF REAL
PROPERTY; FUTURE ACQUISITION OF OTHER PROPERTY. Prior to entering into any new
lease of real property or renewing any existing lease of real property following
the Closing Date, the Borrower shall, and shall cause each of its U.S.
Subsidiaries to, use its best efforts (which shall not require the expenditure
of cash or the making of any material concessions under the relevant lease) to
deliver to the Facility Agent a Waiver executed by the lessor of any real
property that is to be leased by the Borrower or such U.S. Subsidiary for a term
in excess of one year in any state which by statute grants such lessor a
"landlord's" (or similar) Lien which is superior to the Facility Agent's, to the
extent the value of any personal property of the Borrower or its U.S.
Subsidiaries to be held at such leased property exceeds (or it is anticipated
that the value of such personal property will, at any point in time during the
term of such leasehold term, exceed) $100,000.
(b) In the event that the Borrower or any of its U.S. Subsidiaries
shall acquire any real property having a value as determined in good faith by
the Facility Agent in excess of $100,000 in the aggregate, the Borrower or the
applicable U.S. Subsidiary shall, promptly after such acquisition, execute a
Mortgage and provide the Agents with
(i) evidence of the completion (or satisfactory arrangements
for the completion) of all recordings and filings of such Mortgage as
may be necessary or, in the reasonable opinion of the Agents, desirable
effectively to create a valid, perfected first priority Lien, subject
to Liens permitted by SECTION 7.2.3 (or, in the event SECTION 7.2 is no
longer applicable, SECTION 7.3.3), against the properties purported to
be covered thereby;
(ii) mortgagee's title insurance policies in favor of the
Facility Agent and the Lenders in amounts and in form and substance and
issued by insurers, reasonably satisfactory to the Agents, with respect
to the property purported to be covered by such Mortgage, insuring that
title to such property is marketable and that the interests created by
the Mortgage constitute valid first Liens thereon free and clear of all
defects and encumbrances other than as permitted under SECTION 7.2.3
(or, in the event SECTION 7.2 is no longer applicable, SECTION 7.3.3)
or as approved by the Agents, and such policies shall also include a
revolving credit endorsement and such other endorsements as the Agents
shall request and shall be accompanied by evidence of the payment in
full of all premiums thereon; and
(iii) such other approvals, opinions, or documents (including
without limitation a Waiver in form and substance satisfactory to the
Agents executed by the mortgagor or
72
79
lessor of the property purported to be covered by each such Mortgage)
as the Agents may reasonably request.
(c) In accordance with the terms and provisions of this Agreement and
the other Loan Documents, provide the Agents with evidence of all recordings and
filings as may be necessary or, in the reasonable opinion of the Agents,
desirable to create a valid, perfected first priority Lien, subject to the Liens
permitted by SECTION 7.2.3 (or, in the event SECTION 7.2 is no longer
applicable, SECTION 7.3.3), against all property acquired after the Closing Date
(excluding leases of real property).
SECTION 7.1.9. HEDGING OBLIGATIONS. Within six months following the
Closing Date, the Agents shall have received evidence satisfactory to it that
the Borrower has entered into interest rate swap, cap, collar or similar
arrangements designed to protect the Borrower against fluctuations in interest
rates with respect to at least 50% of the aggregate principal amount of the Term
Loans for a period of at least three years from the date the initial interest
rate protection arrangement was obtained with terms reasonably satisfactory to
the Borrower and the Agents.
SECTION 7.1.10. USE OF PROCEEDS, ETC. The Borrower shall apply the
proceeds of the Loans
(a) to make payment in full of the Borrower's obligations
under the Purchase Agreement;
(b) to make payment in full, in connection with the
Refinancing, concurrently with the initial Credit Extension hereunder,
of all Indebtedness identified in ITEM 7.2.2(b) ("Indebtedness to be
Paid") of the Disclosure Schedule;
(c) for general corporate purposes and working capital
purposes of the Borrower and its Subsidiaries; and
(d) to pay the reasonable transaction costs and expenses of
the Transaction.
SECTION 7.1.11. MORTGAGE. Within 30 days after the Closing Date, the
Borrower shall deliver to the Agents counterparts of each Mortgage relating to
each property listed on ITEM 7.1.11 ("Mortgaged Properties") of the Disclosure
Schedule, duly executed by the Borrower or the applicable U.S. Subsidiary of the
Borrower and the Facility Agent, together with
(a) evidence of the completion (or satisfactory arrangements
for the completion) of all recordings and filings of each such Mortgage
as may be necessary or, in the reasonable opinion of the Agents,
desirable effectively to create a valid, perfected first priority Lien
against the properties purported to be covered thereby;
73
80
(b) mortgagee's title insurance policies in favor of the
Facility Agent and the Lenders in amounts and in form and substance and
issued by insurers reasonably satisfactory to the Agents, with respect
to the property purported to be covered by each such Mortgage, insuring
that title to such property is marketable and that the interests
created by each such Mortgage constitute valid first Liens thereon free
and clear of all defects and encumbrances other than as approved by the
Agents, and such policies shall also include a revolving credit
endorsement and such other endorsements as the Agents shall request and
shall be accompanied by evidence of the payment in full of all premiums
thereon; and
(c) such other approvals, opinions, or documents (including
without limitation a Waiver in form and substance satisfactory to the
Agents executed by the mortgagor or lessor of the property purported to
be covered by each such Mortgage) as the Agents may reasonably request.
SECTION 7.1.12. PATENT AND TRADEMARK SECURITY AGREEMENTS. Within 30
days after the Closing Date, the Borrower shall deliver to the Agents
counterparts of the Patent Security Agreement and the Trademark Security
Agreement, each dated as of the date of such delivery, duly executed by the
Borrower or the applicable U.S. Subsidiary of the Borrower, together with any
other instrument or document (each in appropriate form for filing with the
United States Patent and Trademark Office) required to acknowledge or register
or perfect the Facility Agent's security interest in intellectual property
collateral owned as of the Closing Date by the Borrower or such Subsidiary.
SECTION 7.1.13. LOCAL COUNSEL OPINIONS. Within 30 days after the
Closing Date, the Borrower shall cause to be delivered legal opinions, in form
and substance and from counsel reasonably satisfactory to the Agents, as to the
perfection of the Liens and security interests granted hereunder and under the
Loan Documents in respect of the Obligations under the laws of the states of
California, Texas, Illinois, Colorado, Florida, Massachusetts, Arizona, New
York, Pennsylvania, Louisiana, Virginia, Wisconsin, Georgia, Maryland, Missouri,
Kansas, Alabama and Washington. Such legal opinions shall also cover such other
matters customarily related to the foregoing and as may be reasonably requested
by the Agents.
SECTION 7.1.14. ENVIRONMENTAL MATTERS. The Borrower shall, within 30
days after the Closing Date, deliver to the Agents all environmental reports and
other information prepared by or on behalf of the Borrower concerning the
facilities of the Borrower and its Subsidiaries, and the Agents shall be
reasonably satisfied in all material respects with the results of such reports.
74
81
SECTION 7.2. NEGATIVE COVENANTS APPLICABLE TO REVOLVING LOANS. The
Borrower agrees with the Agents, the Issuer and each Revolving Lender that,
until the Revolving Loan Commitment and the Letter of Credit Commitment have
terminated and all Obligations with respect to Revolving Loans and Letters of
Credit have been paid and performed in full, the Borrower will perform the
obligations set forth in this SECTION 7.2.
SECTION 7.2.1. BUSINESS ACTIVITIES. The Borrower will not, and will not
permit any of its Subsidiaries to, engage in any business activity, except a
Core Business.
SECTION 7.2.2. INDEBTEDNESS. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable in respect of any Indebtedness, other than,
without duplication, the following:
(a) Indebtedness in respect of the Credit Extensions and other
Obligations;
(b) until the date of the initial Credit Extension,
Indebtedness identified in ITEM 7.2.2(b) ("Indebtedness to be Paid") of
the Disclosure Schedule;
(c) Indebtedness existing as of the Effective Date which is
identified in ITEM 7.2.2(C) ("Ongoing Indebtedness") of the Disclosure
Schedule;
(d) Hedging Obligations of the Borrower or any of its
Subsidiaries in respect of the Loans;
(e) Indebtedness in an aggregate principal amount not to
exceed $5,000,000 at any time outstanding which is incurred by the
Borrower or any of its Subsidiaries to a vendor of any assets permitted
to be acquired pursuant to SECTION 7.2.7 to finance its acquisition of
such assets;
(f) unsecured Indebtedness incurred in the ordinary course of
business (including unsecured Indebtedness of the type described in
CLAUSE (d) of the definition of "Indebtedness" relating to accounts
payable by the Borrower to its Subsidiaries or by any such Subsidiary
to the Borrower or another such Subsidiary arising in the ordinary
course of business and open accounts extended by suppliers on normal
trade terms in connection with purchases of goods and services, but
excluding Indebtedness incurred through the borrowing of money or
Contingent Liabilities);
(g) Indebtedness in respect of Capitalized Lease Liabilities
to the extent permitted by SECTION 7.2.7;
(h) Indebtedness of the Borrower to any wholly-owned U.S.
Subsidiary of the Borrower or Dayton Superior Canada
75
82
Ltd., or Indebtedness of any wholly-owned U.S. Subsidiary of the
Borrower or Dayton Superior Canada Ltd. to the Borrower or to any other
wholly-owned U.S. Subsidiary of the Borrower, which intercompany
Indebtedness (i) shall be evidenced by one or more promissory notes in
form and substance satisfactory to the Agents which have been duly
executed and delivered to (and indorsed to the order of) the Facility
Agent in pledge pursuant to a Pledge Agreement, and (ii) shall not be
forgiven or otherwise discharged for any consideration other than
payment (Dollar for Dollar) in cash unless the Agents shall otherwise
consent;
(i) Indebtedness in respect of the Seller Note; PROVIDED that
the aggregate principal amount in respect of such Indebtedness at any
time outstanding shall not exceed $5,000,000; and
(j) other unsecured Indebtedness of the Borrower and its
Subsidiaries in an aggregate amount at any time outstanding not to
exceed $5,000,000;
PROVIDED, HOWEVER, that no Indebtedness otherwise permitted by CLAUSES (e), (f),
(g), (h) or (j) shall be permitted if, after giving effect to the incurrence
thereof, any Default shall have occurred and be continuing.
SECTION 7.2.3. LIENS. The Borrower will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon any
of its property, revenues or assets, whether now owned or hereafter acquired,
except:
(a) Liens securing payment of the Obligations or any Hedging
Obligations owed to any Lenders or any Affiliate of any Lender, granted
pursuant to any Loan Document;
(b) Until the date of the initial Credit Extension, Liens
securing payment of Indebtedness of the type permitted and described in
CLAUSE (b) of SECTION 7.2.2;
(c) Liens granted prior to the Effective Date to secure
payment of Indebtedness of the type permitted and described in CLAUSE
(c) of SECTION 7.2.2;
(d) Liens granted to secure payment of Indebtedness of the
type permitted and described in CLAUSE (e) of SECTION 7.2.2 and
covering only those assets acquired with the proceeds of such
Indebtedness;
(e) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate
76
83
reserves in accordance with GAAP shall have been set aside on its
books;
(f) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(g) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
(h) judgment Liens in existence less than 15 days after the
entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to a customary deductible)
by insurance maintained with responsible insurance companies;
(i) deposits to secure the performance of bids, trade
contracts, leases (other than Capitalized Lease Liabilities), statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business; and
(j) zoning restrictions, easements, rights-of-way and
restrictions on use of real property existing as of the Closing Date or
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries.
SECTION 7.2.4. FINANCIAL COVENANTS.
(a) LEVERAGE RATIO. The Borrower will not permit the Leverage Ratio as
of the end of any Fiscal Quarter occurring during any period set forth below to
be greater than the ratio set forth opposite such period:
Period Leverage Ratio
------ --------------
Closing Date through 9/30/98 4.25:1
10/1/98 through 9/30/99 3.75:1
10/1/99 through 9/30/00 3.25:1
10/1/00 through 9/30/01 3.00:1
10/1/01 and thereafter 2.75:1
77
84
(b) FIXED CHARGE COVERAGE RATIO. The Borrower will not permit the Fixed
Charge Coverage Ratio as of the end of any Fiscal Quarter to be less than the
ratio of 1.00:1.
SECTION 7.2.5. INVESTMENTS. The Borrower will not, and will not permit
any of its Subsidiaries to, make, incur, assume or suffer to exist any
Investment in any other Person, except:
(a) Investments existing on the Effective Date and identified
in Item 7.2.5(a) ("Ongoing Investments") of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) without duplication, Investments permitted as Indebtedness
pursuant to SECTION 7.2.2;
(d) without duplication, Investments permitted as Capital
Expenditures pursuant to SECTION 7.2.7;
(e) in the ordinary course of business, Investments by the
Borrower in any of the Borrower's Subsidiaries, or by any such
Subsidiary in any of its Subsidiaries, by way of contributions to
capital;
(f) Investments in the form of loans to officers, directors
and employees of the Borrower and its Subsidiaries, if any, for the
sole purpose of purchasing the Borrower's common stock (or purchases of
such loans made by others) in an aggregate amount at any time
outstanding not to exceed $1,000,000;
(g) Investments made by the Borrower or any of its
Subsidiaries in Joint Ventures in an aggregate amount not to exceed
$1,000,000 over the term of this Agreement; PROVIDED, that if Capital
Stock is being acquired by the Borrower or any such Subsidiary in
connection with such Investment, the Borrower or such Subsidiary shall
cause such Capital Stock to be pledged to the Facility Agent for the
benefit of the Lenders; or
(h) other Investments in an aggregate amount at any one time
not to exceed $2,000,000;
PROVIDED, HOWEVER, that
(i) any Investment which when made complies with the
requirements of the definition of the term "CASH EQUIVALENT INVESTMENT"
may continue to be held notwithstanding that such Investment if made
thereafter would not comply with such requirements; and
78
85
(j) no Investment otherwise permitted by CLAUSES (c), (e),
(f), (g) or (h) shall be permitted to be made if, immediately before or
after giving effect thereto, any Default shall have occurred and be
continuing.
SECTION 7.2.6. RESTRICTED DISTRIBUTIONS, ETC. On and at all times after
the Effective Date:
(a) the Borrower will not declare, pay or make any dividend or
distribution (in cash, property or obligations) on any shares of any
class of Capital Stock (now or hereafter outstanding) of the Borrower
or on any warrants, options or other rights with respect to any shares
of any class of Capital Stock (now or hereafter outstanding) of the
Borrower (other than dividends or distributions payable in its Capital
Stock or warrants to purchase its Capital Stock or splitups or
reclassifications of its Capital Stock into additional or other shares
of its Capital Stock) or apply, or permit any of its Subsidiaries to
apply, any of its funds, property or assets to the purchase,
redemption, sinking fund or other retirement of, or agree or permit any
of its Subsidiaries to purchase or redeem, any shares of any class of
Capital Stock (now or hereafter outstanding) of the Borrower, or
warrants, options or other rights with respect to any shares of any
class of Capital Stock (now or hereafter outstanding) of the Borrower;
(b) the Borrower will not, and will not permit any of its
Subsidiaries to
(i) make any payment or prepayment of principal of,
or make any payment of interest on, any Subordinated Debt on
any day other than the stated, scheduled date for such payment
or prepayment set forth in the documents and instruments
memorializing such Subordinated Debt, or which would violate
the subordination provisions of such Subordinated Debt; or
(ii) redeem, purchase or defease, any Subordinated
Debt (the foregoing prohibited acts referred to in CLAUSES (a)
and (b) above are collectively referred to as "RESTRICTED
DISTRIBUTIONS");
PROVIDED, HOWEVER, that notwithstanding the provisions of CLAUSE (a) above, the
Borrower shall be permitted to make Restricted Distributions to directors,
officers or employees of the Borrower or its Subsidiaries in an aggregate amount
not to exceed $1,000,000 over the term of this Agreement for the sole purpose of
purchasing shares of Capital Stock of the Borrower held by such Person
(including in connection with the exercise of stock options held by such
Person), so long as no Default shall have occurred and be continuing on the date
such payment is declared
79
86
or to be made, nor would a Default result from the making of such Restricted
Distribution.
SECTION 7.2.7. CAPITAL EXPENDITURES, ETC. The Borrower will not, and
will not permit any of its Subsidiaries to, make or commit to make Capital
Expenditures in any Fiscal Year, except Capital Expenditures which do not
aggregate in excess of the sum of (x) the net cash proceeds received by the
Borrower or its Subsidiaries from the sale of Rental Equipment during such
Fiscal Year and (y) 4% of the total consolidated revenues of the Borrower and
its Subsidiaries for the immediately preceding Fiscal Year; PROVIDED, HOWEVER,
that to the extent the amount of Capital Expenditures permitted to be made in
any Fiscal Year pursuant to this Section exceeds the aggregate amount of Capital
Expenditures actually made during such Fiscal Year, up to 50% of such excess
amount may be carried forward to (but only to) the next succeeding Fiscal Year
(any such amount to be certified by the Borrower to the Agents in the Compliance
Certificate delivered for the last Fiscal Quarter of such Fiscal Year, and any
such amount carried forward to a succeeding Fiscal Year shall to be deemed to be
used prior to the Borrower and its Subsidiaries using the amount of Capital
Expenditures permitted by this Section without giving effect to such
carry-forward).
SECTION 7.2.8. RENTAL OBLIGATIONS. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into at any time any arrangement which
does not create a Capitalized Lease Liability and which involves the leasing by
the Borrower or any of its Subsidiaries from any lessor of any real or personal
property (or any interest therein), except arrangements which, together with all
other such arrangements which shall then be in effect, will not require the
payment of an aggregate amount of rentals by the Borrower and its Subsidiaries
in excess of (excluding escalations resulting from a rise in the consumer price
or similar index) in an aggregate annual amount during any Fiscal Year equal to
3% of the total consolidated revenues of the Borrower and its Subsidiaries for
the immediately preceding Fiscal Year; PROVIDED, HOWEVER, that any calculation
made for purposes of this Section shall exclude any amounts required to be
expended for maintenance and repairs, insurance, taxes, assessments, and other
similar charges.
SECTION 7.2.9. CONSOLIDATION, MERGER, ETC. The Borrower will not, and
will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with, any other corporation, or purchase or otherwise
acquire all or substantially all of the assets of any Person (or of any division
thereof) except
(a) any such Subsidiary may liquidate or dissolve voluntarily
into, and may merge with and into, the Borrower (so long as the
Borrower is the surviving corporation in any such combination or
merger) or any wholly-owned U.S.
80
87
Subsidiary, and the assets or stock of any such Subsidiary may be
purchased or otherwise acquired by the Borrower or any wholly-owned
U.S. Subsidiary;
(b) the Borrower may sell, transfer, lease, contribute or
convey assets to any wholly-owned U.S. Subsidiary; and
(c) so long as no Default has occurred and is continuing or
would occur after giving effect thereto, the Borrower or any of its
Subsidiaries may purchase all or substantially all of the assets of any
Person, or acquire such Person by merger, if permitted (without
duplication) by SECTION 7.2.7 to be made as a Capital Expenditure.
SECTION 7.2.10. ASSET DISPOSITIONS, ETC. The Borrower will not, and
will not permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any substantial part of its assets (including accounts receivable and
Capital Stock of Subsidiaries) to any Person, unless
(a) such sale, transfer, lease, contribution or conveyance is
in the ordinary course of its business or is permitted by SECTION
7.2.9; or
(b) (i) such sale, transfer, lease or other disposition is for
fair market value and the consideration consists of not less than 85%
in cash, (ii) the Net Disposition Proceeds received for such assets,
together with the Net Disposition Proceeds of all other assets sold,
transferred, leased, contributed or conveyed otherwise than in the
ordinary course of business by the Borrower or any of its Subsidiaries
pursuant to this clause since the Effective Date, does not exceed
$10,000,000, and (iii) the Net Disposition Proceeds generated from such
sale, transfer lease or other disposition are applied as Net
Disposition Proceeds to prepay the Loans pursuant to the terms of
CLAUSE (c) of SECTION 3.1.1 and SECTION 3.1.2.
SECTION 7.2.11. MODIFICATION OF CERTAIN AGREEMENTS. The Borrower will
not consent to any amendment, supplement or other modification of any of the
terms or provisions contained in, or applicable to, any Transaction Document, or
any document or instrument evidencing or applicable to any Subordinated Debt,
other than any amendment, supplement or other modification which extends the
date or reduces the amount of any required repayment or redemption.
SECTION 7.2.12. TRANSACTIONS WITH AFFILIATES. The Borrower will not,
and will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
(other
81
88
than arrangements or contracts between the Borrower and a wholly-owned U.S.
Subsidiary of the Borrower or between wholly-owned U.S. Subsidiaries of the
Borrower) unless such arrangement or contract is fair and equitable to the
Borrower or such Subsidiary and is an arrangement or contract of the kind which
would be entered into by a prudent Person in the position of the Borrower or
such Subsidiary with a Person which is not one of its Affiliates.
SECTION 7.2.13. NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC. The
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement, any other Loan Document and any
agreement governing any Indebtedness permitted either by CLAUSE (b) or (c) of
SECTION 7.2.2 as in effect on the Effective Date or by CLAUSE (e) of SECTION
7.2.2 as to the assets financed with the proceeds of such Indebtedness)
prohibiting
(a) the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of the Borrower or any other Obligor to
amend or otherwise modify this Agreement or any other Loan Document;
or
(b) the ability of any Subsidiary to make any payments,
directly or indirectly, to the Borrower by way of dividends,
advances, repayments of loans or advances, reimbursements of
management and other intercompany charges, expenses and accruals or
other returns on investments, or any other agreement or arrangement
which restricts the ability of any such Subsidiary to make any
payment, directly or indirectly, to the Borrower;
PROVIDED, HOWEVER, that Dayton Superior Canada Ltd. and Dur-O-Wall Limited may
enter into local working capital financing facilities in Canada containing
customary terms and conditions (including terms and conditions of the type
described in CLAUSES (a) and (b) above), so long as such terms and conditions
relate only to Dayton Superior Canada Ltd. and Dur-O-Wall Limited and their
respective properties and assets located in Canada.
SECTION 7.2.14. SALE AND LEASEBACK. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any agreement or arrangement with
any other Person providing for the leasing by the Borrower or any of its
Subsidiaries of real or personal property having a fair market value of more
than $3,000,000 in the aggregate at any time outstanding which has been or is to
be sold or transferred by the Borrower or any of its Subsidiaries to such other
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the
Borrower or any of its Subsidiaries.
82
89
SECTION 7.3. NEGATIVE COVENANTS APPLICABLE TO TERM LOANS. The Borrower
agrees with the Agents and each Term Lender that, until all Term Loan
Commitments have terminated and all Obligations with respect to the Term Loans
have been paid and performed in full, the Borrower will perform the obligations
set forth in this SECTION 7.3.
SECTION 7.3.1. BUSINESS ACTIVITIES. The Borrower will not, and will not
permit any of its Subsidiaries to, engage in any business activity, except a
Core Business.
SECTION 7.3.2. INDEBTEDNESS. The Borrower will not, and will not permit
any of its Subsidiaries to, create, incur, assume or suffer to exist or
otherwise become or be liable (collectively, "incur") in respect of any
Indebtedness; PROVIDED, HOWEVER, that the Borrower or any of its Subsidiaries
may incur Indebtedness if at the time of such incurrence and after giving PRO
FORMA effect thereto the Pro Forma Interest Coverage Ratio for the most recently
ended four full Fiscal Quarters for which internal financial statements are
available immediately preceding the date on which such Indebtedness is incurred,
calculated on a PRO FORMA basis as if such Indebtedness were incurred on the
first day of such period, would be at least 2.25 to 1.00. Notwithstanding the
foregoing limitations, the incurrence of the following shall be permitted:
(a) Indebtedness in respect of the Credit Extensions and other
Obligations;
(b) until the date of the initial Credit Extension,
Indebtedness identified in ITEM 7.2.2(b) ("Indebtedness to be Paid") of
the Disclosure Schedule;
(c) Indebtedness existing as of the Effective Date which is
identified in ITEM 7.2.2(c) ("Ongoing Indebtedness") of the Disclosure
Schedule;
(d) Hedging Obligations of the Borrower or any of its
Subsidiaries in respect of the Loans;
(e) Indebtedness in an aggregate principal amount not to
exceed $5,000,000 at any time outstanding which is incurred by the
Borrower or any of its Subsidiaries to a vendor of any assets permitted
to be acquired pursuant to SECTION 7.2.7 (as in effect on the date
hereof) to finance its acquisition of such assets;
(f) unsecured Indebtedness incurred in the ordinary course of
business (including unsecured Indebtedness of the type described in
CLAUSE (d) of the definition of "Indebtedness" relating to accounts
payable by the Borrower to its Subsidiaries or by any such Subsidiary
to the Borrower or another such Subsidiary arising in the ordinary
83
90
course of business and open accounts extended by suppliers on normal
trade terms in connection with purchases of goods and services, but
excluding Indebtedness incurred through the borrowing of money or
Contingent Liabilities);
(g) Indebtedness of the Borrower to any wholly owned U.S.
Subsidiary of the Borrower or Dayton Superior Canada Ltd., or
Indebtedness of any wholly owned U.S. Subsidiary of the Borrower or
Dayton Superior Canada Ltd. to the Borrower or to any other wholly
owned U.S. Subsidiary of the Borrower, which intercompany Indebtedness
(i) shall be evidenced by one or more promissory notes in form and
substance satisfactory to the Agents which have been duly executed and
delivered to (and indorsed to the order of) the Facility Agent in
pledge pursuant to a Pledge Agreement, and (ii) shall not be forgiven
or otherwise discharged for any consideration other than payment
(Dollar for Dollar) in cash unless the Agents shall otherwise consent;
(h) Indebtedness in respect of the Seller Note; PROVIDED that
the aggregate principal amount in respect of such Indebtedness at any
time outstanding shall not exceed $5,000,000; and
(i) Indebtedness (other than that described in CLAUSES (a)
through (d) and (f) through (h) above), in an aggregate amount at any
time outstanding not to exceed $15,000,000.
SECTION 7.3.3. LIENS. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon
any of its property, revenues or assets, whether now owned or hereafter
acquired, except:
(a) Liens securing payment of the Obligations or any Hedging
Obligations owed to any Lenders or any Affiliate of any Lender, granted
pursuant to any Loan Document;
(b) Until the date of the initial Credit Extension, Liens
securing payment of Indebtedness of the type permitted and described in
CLAUSE (b) of SECTION 7.3.2;
(c) Liens granted prior to the Effective Date to secure
payment of Indebtedness of the type permitted and described in CLAUSE
(c) of SECTION 7.3.2;
(d) Liens granted to secure payment of Indebtedness of the
type permitted and described in CLAUSE (e) of SECTION 7.3.2 and
covering only those assets acquired with the proceeds of such
Indebtedness;
84
91
(e) Liens for taxes, assessments or other governmental charges
or levies not at the time delinquent or thereafter payable without
penalty or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(f) Liens of carriers, warehousemen, mechanics, materialmen
and landlords incurred in the ordinary course of business for sums not
overdue or being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books;
(g) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or other
forms of governmental insurance or benefits, or to secure performance
of tenders, statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
(h) judgment Liens in existence less than 15 days after the
entry thereof or with respect to which execution has been stayed or the
payment of which is covered in full (subject to a customary deductible)
by insurance maintained with responsible insurance companies;
(i) deposits to secure the performance of bids, trade
contracts, leases (other than Capitalized Lease Liabilities), statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business; and
(j) zoning restrictions, easements, rights-of-way and
restrictions on use of real property existing as of the Closing Date or
incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries.
SECTION 7.3.4. RESTRICTED PAYMENTS, ETC. The Borrower will not, and
will not permit any of its Subsidiaries to, (i) make any Restricted Distribution
(as defined on the date hereof) or (ii) make, incur, assume or suffer to exist
any Investment in any other Person (other than any Investment of the type
permitted and described in CLAUSES (a) through (h) of SECTION 7.2.5 or any
Investment in any Person engaged solely in the conduct of one or more Core
Businesses which, as a result of such Investment, becomes a wholly-owned
Subsidiary of the Borrower); PROVIDED that the amount of Investments pursuant to
CLAUSES (g) and (h) thereof shall be included in the calculation of Restricted
Payments below
85
92
(all of the foregoing being called "RESTRICTED Payments"), UNLESS, (x) in the
case of a dividend, such dividend is payable not more than 60 days after the
date of declaration and (y) after giving effect to such proposed Restricted
Payment, all the conditions set forth in CLAUSES (1) through (3) below are
satisfied (A) at the date of declaration (in the case of any dividend), or (B)
on the date of such other payment or distribution (in the case of any other
Restricted Payment) (each such date being referred to as a "RESTRICTED PAYMENT
COMPUTATION DATE"):
(1) no Default or Event of Default has occurred and is
continuing or would result from the making of such Restricted Payment;
(2) at the Restricted Payment Computation Date for such
Restricted Payment and after giving effect to such Restricted Payment
on a PRO FORMA basis, the Borrower or such Subsidiary could incur $1.00
of additional Indebtedness pursuant to the first sentence of SECTION
7.3.2; and
(3) the aggregate amount of Restricted Payments declared, paid
or distributed subsequent to the date hereof (including the proposed
Restricted Payment) will not exceed the sum of (i) 50% of the
cumulative Net Income of the Borrower for the period subsequent to
September 30, 1997 to and including the last day of the Borrower's last
fiscal quarter ending prior to the Restricted Payment Computation Date
(each such period to constitute a "RESTRICTED PAYMENT COMPUTATION
PERIOD") (or, if such aggregate cumulative Net Income is a loss, minus
100% of such loss of the Borrower during the Restricted Payment
Computation Period), (ii) the aggregate Net Equity Proceeds of the
issuance or sale or the exercise (other than to a Subsidiary or an
employee stock ownership plan or other trust established by the
Borrower or any of its Subsidiaries for the benefit of their employees)
of the Borrower's Capital Stock (other than Redeemable Stock)
subsequent to the Closing Date, (iii) the aggregate Net Equity Proceeds
of the issuance or sale (other than to a Subsidiary) of any debt
securities of the Borrower that have been converted into or exchanged
for Capital Stock (other than Redeemable Stock) of the Borrower to the
extent such debt securities were originally issued or sold for cash,
plus the aggregate Net Equity Proceeds received by the Borrower at the
time of such conversion or exchange, in each case subsequent to the
Closing Date, and (iv) cash contributions to the Borrower's capital
subsequent to the Closing Date.
If no Default or Event of Default has occurred and is continuing or would occur
as a result thereof, the prohibitions set forth above in this SECTION 7.3.4 are
subject to the following
86
93
exceptions: (A) Investments in obligations representing a portion of the
proceeds of any Disposition consummated in accordance with Section 7.3.5;
PROVIDED, HOWEVER, that such Investments will be excluded in the calculation of
the amount of Restricted Payments previously made for purposes of CLAUSE (3)
above; (B) any purchase or redemption of Capital Stock or Subordinated
Indebtedness made by exchange for, or out of the proceeds of the substantially
concurrent sale of, Capital Stock of the Borrower (other than Redeemable Stock
and other than Capital Stock issued or sold to a Subsidiary or an employee stock
ownership plan); PROVIDED, HOWEVER, that (x) such purchase or redemption will be
excluded in the calculation of the amount of Restricted Payments previously made
for purposes of CLAUSE (3) above and (y) the Net Equity Proceeds from such sale
will be excluded for purposes of CLAUSE (3) above to the extent utilized for
purposes of such purchase or redemption; (C) any purchase or redemption of
Subordinated Debt of the Borrower made by exchange for, or out of the proceeds
of the substantially concurrent sale of, Subordinated Debt of the Borrower or
any Subsidiary of the Borrower which is permitted to be issued pursuant to
SECTION 7.3.2; PROVIDED, HOWEVER, that such purchase or redemption will be
excluded in the calculation of the amount of Restricted Payments previously made
for purposes of CLAUSE (3) above; (D) the purchase of shares of Capital Stock of
the Borrower held by directors, officers or employees of the Borrower, or its
subsidiaries in an aggregate amount not to exceed $1,000,000 over the term of
this Agreement; PROVIDED, HOWEVER, that any such purchase will be excluded in
the calculation of the amount of Restricted Payments previously made for
purposes of CLAUSE (3) above.
For purposes of this SECTION 7.3.4 (and SECTION 7.2.6), (a) the amount
of any Restricted Payment declared, paid or distributed in property of the
Borrower or any Restricted Subsidiary will be deemed to be the net book value of
any such property that is intangible property and the fair market value (as
determined by and set forth in a resolution of the Board of Directors) of any
such property that is tangible property at the Restricted Payment Computation
Date, in each case, after deducting related reserves for depreciation, depletion
and amortization; (b) the amount of any Restricted Payment declared, paid or
distributed in obligations of the Borrower or any Subsidiary of the Borrower
will be deemed to be the principal amount of such obligations as of the date of
the adoption of a resolution by the board of directors of the Borrower or such
Subsidiary authorizing such Restricted Payment; and (c) a distribution to
holders of the Borrower's Capital Stock of (i) shares of Capital Stock of any
Subsidiary of the Borrower or (ii) other assets of the Borrower, without, in
either case, the receipt of equivalent consideration therefor will be regarded
as the equivalent of a cash dividend equal to the excess of the fair market
value of the Capital Stock or other assets being so distributed at the time of
such distribution over the
87
94
consideration, if any, received therefor. Not later than the date of the making
of any such Restricted Payment, the Borrower shall deliver to the Facility Agent
a certificate of an Authorized Officer certifying that such Restricted Payment
is permitted, attaching a copy of the applicable resolution of the Board of
Directors pursuant to which the value of the Restricted Payment to be made was
determined and setting forth the basis upon which the calculations required by
this Section were computed.
SECTION 7.3.5. CONSOLIDATION, MERGER, ETC. The Borrower will not, and
will not permit any of its Subsidiaries to, liquidate or dissolve, consolidate
with, or merge into or with, any other corporation, or purchase or otherwise
acquire all or substantially all of the assets of any Person (or of any division
thereof) except
(a) any such Subsidiary may liquidate or dissolve voluntarily
into, and may merge with and into, the Borrower (so long as the
Borrower is the surviving corporation in any such combination or
merger) or any wholly-owned U.S. Subsidiary, and the assets or stock of
any such Subsidiary may be purchased or otherwise acquired by the
Borrower or any wholly-owned U.S. Subsidiary;
(b) the Borrower may sell, transfer, lease, contribute or
convey assets to any wholly-owned U.S. Subsidiary; and
(c) so long as no Default has occurred and is continuing or
would occur after giving effect thereto, the Borrower or any of its
Subsidiaries may purchase all or substantially all of the assets of any
Person, or acquire such Person by merger, to the extent such assets are
engaged in the conduct of a Core Business or such Person (in the case
of a merger) becomes a wholly-owned Subsidiary of the Borrower engaged
solely in the conduct of one or more Core Businesses to be made as an
Investment.
SECTION 7.3.6. ASSET DISPOSITIONS, ETC. The Borrower will not, and will
not permit any of its Subsidiaries to, sell, transfer, lease, contribute or
otherwise convey, or grant options, warrants or other rights with respect to,
all or any substantial part of its assets (including accounts receivable and
Capital Stock of Subsidiaries) to any Person, unless
(a) such sale, transfer, lease, contribution or conveyance is
in the ordinary course of its business or is permitted by SECTION
7.3.5; or
(b) (i) such sale, transfer, lease or other disposition is for
fair market value and the consideration consists of not less than 85%
in cash, (ii) the Net Disposition
88
95
Proceeds received for such assets, together with the Net Disposition
Proceeds of all other assets sold, transferred, leased, contributed or
conveyed otherwise than in the ordinary course of business by the
Borrower or any of its Subsidiaries pursuant to this clause since the
Effective Date, does not exceed $25,000,000, and (iii) the Net
Disposition Proceeds generated from such sale, transfer lease or other
disposition are applied as Net Disposition Proceeds to prepay the Loans
pursuant to the terms of CLAUSE (c) of SECTION 3.1.1 and SECTION 3.1.2.
SECTION 7.3.7. MODIFICATION OF CERTAIN AGREEMENTS. The Borrower will
not consent to any amendment, supplement or other modification of any of the
terms or provisions contained in, or applicable to, any Transaction Document, or
any document or instrument evidencing or applicable to any Subordinated Debt,
other than any amendment, supplement or other modification which extends the
date or reduces the amount of any required repayment or redemption.
SECTION 7.3.8. TRANSACTIONS WITH AFFILIATES. The Borrower will not, and
will not permit any of its Subsidiaries to, enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
(other than arrangements or contracts between the Borrower and a wholly-owned
U.S. Subsidiary of the Borrower or between wholly-owned U.S. Subsidiaries of the
Borrower) unless such arrangement or contract is fair and equitable to the
Borrower or such Subsidiary and is an arrangement or contract of the kind which
would be entered into by a prudent Person in the position of the Borrower or
such Subsidiary with a Person which is not one of its Affiliates.
SECTION 7.3.9. NEGATIVE PLEDGES, RESTRICTIVE AGREEMENTS, ETC. The
Borrower will not, and will not permit any of its Subsidiaries to, enter into
any agreement (excluding this Agreement, any other Loan Document and any
agreement governing any Indebtedness permitted either by CLAUSE (b) or (c) of
SECTION 7.3.2 as in effect on the Effective Date or by CLAUSE (e) of SECTION
7.3.2 as to the assets financed with the proceeds of such Indebtedness)
prohibiting
(a) the creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired, or the ability of the Borrower or any other Obligor to amend
or otherwise modify this Agreement or any other Loan Document; or
(b) the ability of any Subsidiary to make any payments,
directly or indirectly, to the Borrower by way of dividends, advances,
repayments of loans or advances, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on
investments, or any other agreement or arrangement which
89
96
restricts the ability of any such Subsidiary to make any payment,
directly or indirectly, to the Borrower;
PROVIDED, HOWEVER, that Dayton Superior Canada Ltd. and Dur-O-Wall Limited may
enter into local working capital financing facilities in Canada containing
customary terms and conditions (including terms and conditions of the type
described in CLAUSES (a) and (b) above), so long as such terms and conditions
relate only to Dayton Superior Canada Ltd. and Dur-O-Wall Limited and their
respective properties and assets located in Canada.
SECTION 7.3.10. SALE AND LEASEBACK. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any agreement or arrangement with
any other Person providing for the leasing by the Borrower or any of its
Subsidiaries of real or personal property having a fair market value of more
than $3,000,000 in the aggregate at any time outstanding which has been or is to
be sold or transferred by the Borrower or any of its Subsidiaries to such other
Person or to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the
Borrower or any of its Subsidiaries.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. LISTING OF EVENTS OF DEFAULT. Each of the following events
or occurrences described in this SECTION 8.1 shall constitute an "EVENT OF
DEFAULT".
SECTION 8.1.1. NON-PAYMENT OF OBLIGATIONS. The Borrower shall default
in the payment or prepayment when due of any principal of or interest on any
Loan, the Borrower shall default in the payment when due of any Reimbursement
Obligation, or the Borrower shall default (and such default shall continue
unremedied for a period of five days) in the payment when due of any fee or of
any other Obligation.
SECTION 8.1.2. BREACH OF WARRANTY. Any representation or warranty of
the Borrower or any other Obligor made or deemed to be made hereunder or in any
other Loan Document executed by it or any other writing or certificate furnished
by or on behalf of the Borrower or any other Obligor to the Agents or any Lender
for the purposes of or in connection with this Agreement or any such other Loan
Document (including any certificates delivered pursuant to ARTICLE V) is or
shall be incorrect when made in any material respect.
SECTION 8.1.3 NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS. (a)
With respect to the Revolving Loans and the Revolving Loan Commitments, the
Borrower shall default in the due
90
97
performance and observance of any of its obligations under SECTION 7.1.10 or
SECTION 7.2.
(b) With respect to the Term Loans and the Term Loan Commitments, the
Borrower shall (i) default in the due performance and observance of any of its
obligations under SECTION 7.1.10 or SECTION 7.3 or (ii) default in the due
performance and observance of any of its obligations under SECTION 7.2 and such
default shall continue unremedied for a period of 30 days.
SECTION 8.1.4. NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. The
Borrower or any other Obligor shall default in the due performance and
observance of any other agreement contained herein or in any other Loan Document
executed by it, and such default shall continue unremedied (x) for a period of
30 days after notice thereof shall have been given to the Borrower by any
Revolving Lender or (y) for a period of 60 days after notice thereof shall have
been given to the Borrower by any Term Lender.
SECTION 8.1.5. DEFAULT ON OTHER INDEBTEDNESS. A default shall occur in
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any Indebtedness (other than Indebtedness
described in SECTION 8.1.1) of the Borrower or any of its Subsidiaries or any
other Obligor having a principal amount, individually or in the aggregate, in
excess of $1,000,000, or a default shall occur in the performance or observance
of any obligation or condition with respect to such Indebtedness if the effect
of such default is to accelerate the maturity of any such Indebtedness or such
default shall continue unremedied for any applicable period of time sufficient
to permit the holder or holders of such Indebtedness, or any trustee or agent
for such holders, to cause such Indebtedness to become due and payable prior to
its expressed maturity.
SECTION 8.1.6. JUDGMENTS. Any judgment or order for the payment of
money in excess of (x) $1,000,000 (in the case of the Revolving Loans and the
Revolving Loan Commitments) or (y) $2,000,000 (in the case of the Term Loans and
the Term Loan Commitments) shall be rendered against the Borrower or any of its
Subsidiaries or any other Obligor and either
(a) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order; or
(b) there shall be any period of 10 consecutive days during
which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect.
SECTION 8.1.7. PENSION PLANS. Any of the following events shall occur
with respect to any Pension Plan
91
98
(a) the institution of any steps by the Borrower, any member
of its Controlled Group or any other Person to terminate a Pension Plan
if, as a result of such termination, the Borrower or any such member
could be required to make a contribution to such Pension Plan, or could
reasonably expect to incur a liability or obligation to such Pension
Plan, in excess of (x) $1,000,000 (in the case of the Revolving Loans
and the Revolving Loan Commitments) or (y) $2,000,000 (in the case of
the Term Loans and the Term Loan Commitments); or
(b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA.
SECTION 8.1.8. CONTROL OF THE BORROWER. With respect to the Revolving
Loans and the Revolving Loan Commitments, any Change in Control shall occur.
SECTION 8.1.9. BANKRUPTCY, INSOLVENCY, ETC. The Borrower or any of its
Subsidiaries or any other Obligor shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness to pay, debts as they become
due;
(b) apply for, consent to, or acquiesce in, the appointment of
a trustee, receiver, sequestrator or other custodian for the Borrower
or any of its Subsidiaries or any other Obligor or any property of any
thereof, or make a general assignment for the benefit of creditors;
(c) in the absence of such application, consent or
acquiescence, permit or suffer to exist the appointment of a trustee,
receiver, sequestrator or other custodian for the Borrower or any of
its Subsidiaries or any other Obligor or for a substantial part of the
property of any thereof, and such trustee, receiver, sequestrator or
other custodian shall not be discharged within 60 days, provided that
the Borrower, each Subsidiary and each other Obligor hereby expressly
authorizes the Facility Agent and each Lender to appear in any court
conducting any relevant proceeding during such 60-day period to
preserve, protect and defend their rights under the Loan Documents;
(d) permit or suffer to exist the commencement of any
bankruptcy, reorganization, debt arrangement or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution,
winding up or liquidation proceeding, in respect of the Borrower or any
of its Subsidiaries or any other Obligor, and, if any such case or
proceeding is not commenced by the Borrower or such Subsidiary or such
other Obligor, such case or proceeding shall be consented to or
92
99
acquiesced in by the Borrower or such Subsidiary or such other Obligor
or shall result in the entry of an order for relief or shall remain for
60 days undismissed, provided that the Borrower, each Subsidiary and
each other Obligor hereby expressly authorizes the Facility Agent and
each Lender to appear in any court conducting any such case or
proceeding during such 60-day period to preserve, protect and defend
their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of
the foregoing.
SECTION 8.1.10. IMPAIRMENT OF SECURITY, ETC. Any Loan Document, or any
Lien granted thereunder, shall (except in accordance with its terms), in whole
or in part, terminate, cease to be effective or cease to be the legally valid,
binding and enforceable obligation of any Obligor party thereto; the Borrower,
any other Obligor or any other party shall, directly or indirectly, contest in
any manner such effectiveness, validity, binding nature or enforceability; or
any Lien securing any Obligation shall, in whole or in part, cease to be a
perfected first priority Lien, subject only to those exceptions expressly
permitted by such Loan Document.
SECTION 8.2. ACTION IF BANKRUPTCY. If any Event of Default described in
CLAUSES (a) through (d) of SECTION 8.1.9 shall occur with respect to the
Borrower or any Subsidiary or any other Obligor, the Commitments (if not
theretofore terminated) shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations shall
automatically be and become immediately due and payable, without notice or
demand.
SECTION 8.3. ACTION IF OTHER EVENT OF DEFAULT.
(a) If any Event of Default with respect to the Revolving
Loans and the Revolving Loan Commitments (other than any Event of
Default described in CLAUSES (a) through (d) of SECTION 8.1.9 with
respect to the Borrower or any Subsidiary or any other Obligor) shall
occur for any reason, whether voluntary or involuntary, and be
continuing, the Facility Agent, upon the direction of the Required
Revolving Lenders shall by notice to the Borrower declare all or any
portion of the outstanding principal amount of the Revolving Loans
and other Obligations relating to the Revolving Loans and the
Revolving Loan Commitments to be due and payable and/or the Revolving
Loan Commitments (if not theretofore terminated) to be terminated,
whereupon the full unpaid amount of such Loans and other Obligations
which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or
presentment, and/or, as the case may be, such Commitments shall
terminate.
93
100
(b) If any Event of Default with respect to the Term Loans
and the Term Loan Commitments (other than any Event of Default
described in CLAUSES (a) through (d) of SECTION 8.1.9 with respect to
the Borrower or any Subsidiary or any other Obligor) shall occur for
any reason, whether voluntary or involuntary, and be continuing, the
Facility Agent, upon the direction of the Required Term Lenders shall
by notice to the Borrower declare all or any portion of the
outstanding principal amount of the Term Loans and other Obligations
relating to the Term Loans and the Term Loan Commitments to be due
and payable and/or the Term Loan Commitments (if not theretofore
terminated) to be terminated, whereupon the full unpaid amount of
such Loans and other Obligations which shall be so declared due and
payable shall be and become immediately due and payable, without
further notice, demand or presentment, and/or as the case may be,
such Commitments shall terminate.
SECTION 8.4. CONSTRUCTION. Unless otherwise expressly specified, an
Event of Default shall relate to the Revolving Loans and Revolving Loan
Commitments as well as the Term Loans and the Term Loan Commitments.
ARTICLE IX
THE AGENTS
SECTION 9.1. ACTIONS. Each Lender hereby appoints DLJ as its
Syndication Agent, Bank of America as its Documentation Agent, BTCo. as its
Administrative Agent and Bank One as its Facility Agent under and for purposes
of this Agreement, the Notes and each other Loan Document. Each Lender
authorizes the Agents to act on behalf of such Lender under this Agreement, the
Notes and each other Loan Document and, in the absence of other written
instructions from the Required Lenders received from time to time by the Agents
(with respect to which each Agent agrees that it will comply, except as
otherwise provided in this Section or as otherwise advised by counsel), to
exercise such powers hereunder and thereunder as are specifically delegated to
or required of the Agents by the terms hereof and thereof, together with such
powers as may be reasonably incidental thereto. Each Lender hereby indemnifies
(which indemnity shall survive any termination of this Agreement) the Agents,
PRO RATA according to such Lender's Percentage, from and against any and all
liabilities, obligations, losses, damages, claims, costs or expenses of any kind
or nature whatsoever which may at any time be imposed on, incurred by, or
asserted against, any of the Agents in any way relating to or arising out of
this Agreement, the Notes and any other Loan Document, including reasonable
attorneys' fees, and as to which any Agent is not reimbursed by the Borrower;
PROVIDED, HOWEVER, that no Lender shall be liable for the payment of any portion
of such liabilities, obligations,
94
101
losses, damages, claims, costs or expenses which are determined by a court of
competent jurisdiction in a final proceeding to have resulted solely from such
Agent's gross negligence or wilful misconduct. The Agents shall not be required
to take any action hereunder, under the Notes or under any other Loan Document,
or to prosecute or defend any suit in respect of this Agreement, the Notes or
any other Loan Document, unless they are indemnified hereunder to their
satisfaction. If any indemnity in favor of any Agent shall be or become, in such
Agent's determination, inadequate, such Agent may call for additional
indemnification from the Lenders and cease to do the acts indemnified against
hereunder until such additional indemnity is given.
SECTION 9.2. FUNDING RELIANCE, ETC. Unless the Facility Agent shall
have been notified by telephone, confirmed in writing, by any Lender by 5:00
p.m., New York time, on the day prior to a Borrowing or disbursement with
respect to a Letter of Credit pursuant to SECTION 2.6.2 that such Lender will
not make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Facility Agent may assume that
such Lender has made such amount available to the Facility Agent and, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If and to the extent that such Lender shall not have made such amount
available to the Facility Agent, such Lender and the Borrower severally agree to
repay the Facility Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date the Facility Agent made such
amount available to the Borrower to the date such amount is repaid to the
Facility Agent, at the interest rate applicable at the time to Loans comprising
such Borrowing.
SECTION 9.3. EXCULPATION. None of the Agents nor any of their
directors, officers, employees or agents shall be liable to any Lender for any
action taken or omitted to be taken by it under this Agreement or any other Loan
Document, or in connection herewith or therewith, except for its own wilful
misconduct or gross negligence, nor responsible for any recitals or warranties
herein or therein, nor for the effectiveness, enforceability, validity or due
execution of this Agreement or any other Loan Document, nor for the creation,
perfection or priority of any Liens purported to be created by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, nor to make any inquiry respecting the
performance by the Borrower of its obligations hereunder or under any other Loan
Document. Any such inquiry which may be made by any Agent shall not obligate it
to make any further inquiry or to take any action. The Agents shall be entitled
to rely upon advice of counsel concerning legal matters and upon any notice,
consent, certificate, statement or writing which the Agents believe to be
genuine and to have been presented by a proper Person.
95
102
SECTION 9.4. SUCCESSOR. The Syndication Agent may resign upon one
Business Day's notice to the Borrower and the Facility Agent. The Documentation
Agent may resign upon one Business Day's notice to the Borrower and the Facility
Agent. The Facility Agent may resign as such at any time upon at least 30 days'
prior notice to the Borrower and all Lenders. If the Facility Agent at any time
shall resign, the Required Lenders may appoint another Lender as a successor
Facility Agent which shall thereupon become the Facility Agent hereunder. If no
successor Facility Agent shall have been so appointed by the Required Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Facility Agent's giving notice of resignation, then the retiring Facility Agent
may, on behalf of the Lenders, appoint a successor Facility Agent, which shall
be one of the Lenders or a commercial banking institution organized under the
laws of the U.S. (or any State thereof) or a U.S. branch or agency of a
commercial banking institution, and having a combined capital and surplus of at
least $500,000,000. Upon the acceptance of any appointment as Facility Agent
hereunder by a successor Facility Agent, such successor Facility Agent shall be
entitled to receive from the retiring Facility Agent such documents of transfer
and assignment as such successor Facility Agent may reasonably request, and
shall thereupon succeed to and become vested with all rights, powers, privileges
and duties of the retiring Facility Agent, and the retiring Facility Agent shall
be discharged from its duties and obligations under this Agreement. After any
retiring Facility Agent's resignation hereunder as the Facility Agent, the
provisions of
(a) this ARTICLE IX shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was the Facility
Agent under this Agreement; and
(b) SECTION 10.3 and SECTION 10.4 shall continue to inure to
its benefit.
SECTION 9.5. LOANS OR LETTERS OF CREDIT ISSUED BY BANK ONE. Bank One
shall have the same rights and powers with respect to (x) the Loans made by it
or any of its Affiliates, (y) the Notes held by it or any of its Affiliates, and
(z) its participating interests in the Letters of Credit as any other Lender and
may exercise the same as if it were not the Facility Agent. Bank One and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of business with the Borrower or any Subsidiary or Affiliate of the
Borrower as if Bank One were not the Facility Agent hereunder.
SECTION 9.6. CREDIT DECISIONS. Each Lender acknowledges that it has,
independently of the Agents, the Arrangers and each other Lender, and based on
such Lender's review of the financial information of ▇▇▇▇▇▇, the Borrower, this
Agreement, the other Loan Documents (the terms and provisions of which being
satisfactory to such Lender) and such other documents, information and
investigations as such Lender has deemed appropriate, made its own credit
decision to extend its Commitments. Each Lender also acknowledges that it will,
independently of the Agents, the Arrangers and each other Lender, and based on
such other documents,
96
103
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this Agreement
or any other Loan Document.
SECTION 9.7. COPIES, ETC. The Facility Agent shall give prompt notice
to each Lender of each notice or request required or permitted to be given to
the Facility Agent by the Borrower pursuant to the terms of this Agreement
(unless concurrently delivered to the Lenders by the Borrower). The Facility
Agent will distribute to each Lender each document or instrument received for
its account and copies of all other communications received by the Facility
Agent from the Borrower for distribution to the Lenders by the Facility Agent in
accordance with the terms of this Agreement.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. WAIVERS, AMENDMENTS, ETC. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing and
consented to by the Borrower and, except for the provisions described in CLAUSE
(b), (d), (e), (h)(iii), (i), (j) or (k)(ii) below (the amendment, modification
or waiver of which provisions shall be consented to by the Lenders and/or
holders of Notes described in such clauses), the Required Lenders; PROVIDED,
HOWEVER, that no such amendment, modification or waiver which would:
(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders shall be
effective unless consented to by each Lender;
(b) modify any requirement hereunder that any particular
action taken by the Required Revolving Lenders or the Required Term
Lenders shall be effective unless consented to by each Revolving Lender
or each Term Lender, respectively;
(c) modify this SECTION 10.1, change the definition of
"REQUIRED LENDERS", release any Guarantor from its obligations under
the Guaranty or release all or substantially all of the collateral
security (except as otherwise specifically provided in any Loan
Document) shall
97
104
be made without the consent of each Lender and each holder of a Note;
(d) change the definition of "REQUIRED REVOLVING LENDERS",
increase any Revolving Loan Commitment or Letter of Credit Commitment
or the Percentage of any Revolving Lender, reduce any fees described in
Article III or extend the Revolving Loan Commitment Termination Date
shall be made without the consent of each Revolving Lender and each
holder of a Note evidencing a Revolving Loan;
(e) change the definition of "REQUIRED TERM LENDERS", increase
any Term Loan Commitment or the Percentage of any Term Lender or extend
the Term Loan Commitment Termination Date shall be made without the
consent of each Term Lender and each holder of a Note evidencing a Term
Loan;
(f) extend the due date for, or reduce the amount of, any
scheduled repayment or prepayment of principal of or interest on or
premium or fees payable in respect of any Loan or any Reimbursement
Obligations shall be made without the consent of the holder of that
Note evidencing such Loan or, in the case of a Reimbursement
Obligation, the Issuer owed, and those Lenders participating in, such
Reimbursement Obligation;
(g) affect adversely the interests, rights or obligations of
any Agent, Issuer or Arranger (in its capacity as Agent, Issuer or
Arranger), unless consented to by such Agent, Issuer or Arranger, as
the case may be;
(h) (i) without the consent of the Required Lenders, change
the definition of "BORROWING Base AMOUNT", "ELIGIBLE ACCOUNT" or "NET
ASSET VALUE" (in each case if the effect of such change would be to
require a Lender to make or participate in a Credit Extension in an
amount that is greater than such Lender would have had to make or
participate in immediately prior to such change), (ii) without the
consent of the Required Lenders, amend, modify or waive SECTION
3.1.1(b) or (iii) without the consent of the Required Revolving
Lenders, have the effect (either immediately or at some later time) of
enabling the Borrower to satisfy a condition precedent to the making of
a Revolving Loan or the issuance of a Letter of Credit;
(i) modify any provision of SECTION 2.1.2, 2.1.3, 2.1.5, 2.6
or 7.2 or have the effect of waiving any Default or Event of Default
with respect to the Revolving Loans and the Revolving Loan Commitments
shall be made without the consent of the Required Revolving Lenders;
(j) modify any provision of SECTION 7.3 or have the effect of
waiving any Default or Event of Default with
98
105
respect to the Term Loans and the Term Loan Commitments shall be made
without the consent of the Required Term Lenders; or
(k) without limiting the effect of any of the preceding
clauses, (i) amend, modify or waive the provisions of CLAUSE (a)(i) of
SECTION 3.1.1 or CLAUSE (b) of SECTION 3.1.2 or effect any amendment,
modification or waiver that by its terms adversely affects in any
material respect the rights of Lenders participating in any Tranche
differently from those of Lenders participating in other Tranches,
without the consent of the holders of the Notes evidencing at least 51%
of the aggregate amount of Loans outstanding under the Tranche or
Tranches affected by such modification, or (ii) in the case of a
modification affecting the Revolving Loan Commitment Amount, the
Required Revolving Lenders.
No failure or delay on the part of any Agent, the Issuer, any Lender or the
holder of any Note in exercising any power or right under this Agreement or any
other Loan Document shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power or right preclude any other or further
exercise thereof or the exercise of any other power or right. No notice to or
demand on the Borrower in any case shall entitle it to any notice or demand in
similar or other circumstances. No waiver or approval by any Agent, the Issuer,
any Lender or the holder of any Note under this Agreement or any other Loan
Document shall, except as may be otherwise stated in such waiver or approval, be
applicable to subsequent transactions. No waiver or approval hereunder shall
require any similar or dissimilar waiver or approval thereafter to be granted
hereunder.
SECTION 10.2. NOTICES. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed, delivered or transmitted to such party at
its address or facsimile number set forth on SCHEDULE II hereto or, in the case
of a Lender that becomes a party hereto after the date hereof, as set forth in
the Lender Assignment Agreement pursuant to which such Lender becomes a Lender
hereunder or at such other address or facsimile number as may be designated by
such party in a notice to the other parties. Any notice, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any notice, if transmitted
by facsimile, shall be deemed given when transmitted.
SECTION 10.3. PAYMENT OF COSTS AND EXPENSES. The Borrower agrees to pay
on demand all expenses of each of the Agents and the Arrangers (including the
reasonable fees and out-of-pocket
99
106
expenses of counsel to the Agents and of local counsel, if any, who may be
retained by counsel to the Agents) in connection with
(a) the syndication by the Syndication Agent and the Arrangers
of the Loans, the negotiation, preparation, execution and delivery of
this Agreement and of each other Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to this Agreement or any other Loan Document as may from
time to time hereafter be required, whether or not the transactions
contemplated hereby are consummated;
(b) the filing, recording, refiling or rerecording of each
Mortgage, each Pledge Agreement and each Security Agreement and/or any
Uniform Commercial Code financing statements relating thereto and all
amendments, supplements and modifications to any thereof and any and
all other documents or instruments of further assurance required to be
filed or recorded or refiled or rerecorded by the terms hereof or of
such Mortgage, Pledge Agreement or Security Agreement; and
(c) the preparation and review of the form of any document or
instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Agents, the Issuer and the
Lenders harmless from all liability for, any stamp or other taxes which may be
payable in connection with the execution or delivery of this Agreement, the
borrowings hereunder, the issuance of the Notes, the issuance of the Letters of
Credit, or any other Loan Documents. The Borrower also agrees to reimburse the
Agents, the Issuer and each Lender upon demand for all reasonable out-of-pocket
expenses (including attorneys' fees and legal expenses) incurred by such Agent,
the Issuer or such Lender in connection with (x) the negotiation of any
restructuring or "work-out", whether or not consummated, of any Obligations and
(y) the enforcement of any Obligations.
SECTION 10.4. INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the Commitments,
the Borrower hereby indemnifies, exonerates and holds each Agent, the Issuer,
each Arranger and each Lender and each of their respective officers, directors,
employees and agents (collectively, the "INDEMNIFIED PARTIES") free and harmless
from and against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable attorneys' fees
and disbursements (collectively, the "INDEMNIFIED LIABILITIES"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to
100
107
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan or the use
of any Letter of Credit;
(b) the entering into and performance of this Agreement and
any other Loan Document by any of the Indemnified Parties (including
any action brought by or on behalf of the Borrower as the result of any
determination by the Required Lenders pursuant to ARTICLE V not to make
any Credit Extension);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not the Agent or such Lender is party thereto;
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to
the protection of the environment or the Release by the Borrower or any
of its Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission, discharging or releases from, any real
property owned or operated by the Borrower or any Subsidiary thereof of
any Hazardous Material (including any losses, liabilities, damages,
injuries, costs, expenses or claims asserted or arising under any
Environmental Law), regardless of whether caused by, or within the
control of, the Borrower or such Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's gross
negligence or wilful misconduct. Each Obligor and its permitted successors and
assigns hereby waive, release and agree not to make any claim, or bring any cost
recovery action against, any Agent, any Arranger or any Lender under CERCLA or
any state equivalent, or any similar law now existing or hereafter enacted,
except to the extent arising out of the gross negligence or wilful misconduct of
any Indemnified Party. It is expressly understood and agreed that to the extent
that any of such Persons is strictly liable under any Environmental Laws, such
Obligor's obligation to such Person under this indemnity shall likewise be
without regard to fault on the part of such Obligor, to the extent permitted
under applicable law, with respect to the violation or condition which results
in liability of such Person. If and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.
101
108
SECTION 10.5. SURVIVAL. The obligations of the Borrower under SECTIONS
4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders under
SECTIONS 4.8 and 9.1, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Commitments. The representations and warranties made by each Obligor in this
Agreement and in each other Loan Document shall survive the execution and
delivery of this Agreement and each such other Loan Document.
SECTION 10.6. SEVERABILITY. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or such Loan Document or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 10.7. HEADINGS. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not affect
the meaning or interpretation of this Agreement or such other Loan Document or
any provisions hereof or thereof.
SECTION 10.8. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This
Agreement may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement. This Agreement shall become effective
when counterparts hereof executed on behalf of the Borrower and each Lender (or
notice thereof satisfactory to the Agent) shall have been received by the Agents
and notice thereof shall have been given by the Facility Agent to the Borrower
and each Lender.
SECTION 10.9. GOVERNING LAW; ENTIRE AGREEMENT. THIS AGREEMENT, THE
NOTES AND EACH OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This
Agreement, the Notes and the other Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter hereof
and supersede any prior agreements, written or oral, with respect thereto.
SECTION 10.10. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns; PROVIDED, HOWEVER, that:
(a) the Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of each of the
Agents and all Lenders; and
102
109
(b) the rights of sale, assignment and transfer of the Lenders
are subject to SECTION 10.11.
SECTION 10.11. SALE AND TRANSFER OF LOANS AND NOTES; PARTICIPATIONS IN
LOANS AND NOTES. Each Lender may assign, or sell participations in, its Loans
and Commitments to one or more other Persons in accordance with this SECTION
10.11.
SECTION 10.11.1. ASSIGNMENTS. Any Lender,
(a) with the written consents of the Borrower and (in the case
of any assignment of participations in Letters of Credit or Revolving
Loan Commitments) the Issuer (which consents shall not be unreasonably
delayed or withheld) may at any time assign and delegate to one or more
commercial banks, funds which are regularly engaged in making,
purchasing or investing in loans or securities or other financial
institutions, and
(b) with notice to the Borrower, the Facility Agent and (in
the case of any assignment of participations in Letters of Credit or
Revolving Loan Commitments) the Issuer, but without the consent of the
Borrower, the Facility Agent or the Issuer, may assign and delegate to
any of its Affiliates or to any other Lender
(each Person described in either of the foregoing clauses as being the Person to
whom such assignment and delegation is to be made, being hereinafter referred to
as an "ASSIGNEE LENDER"), all or any fraction of such Lender's total Loans and
Commitments (which assignment and delegation shall be of a constant, and not a
varying, percentage of all the assigning Lender's Loans and Commitments) in a
minimum aggregate amount equal to the lesser of (x) $2,500,000 and (y) the then
remaining amount of such assigning Lender's Revolving Loan Commitment or Term
Loans; PROVIDED, HOWEVER, that any such Assignee Lender will comply, if
applicable, with the provisions contained in the last sentence of SECTION 4.6
and FURTHER, PROVIDED, HOWEVER, that, the Borrower, each other Obligor and the
Facility Agent shall be entitled to continue to deal solely and directly with
such Lender in connection with the interests so assigned and delegated to an
Assignee Lender until
(i) written notice of such assignment and delegation,
together with payment instructions, addresses and related
information with respect to such Assignee Lender, shall have
been given to the Borrower and the Facility Agent by such
Lender and such Assignee Lender,
(ii) such Assignee Lender shall have executed and
delivered to the Borrower and the Facility Agent a
103
110
Lender Assignment Agreement, accepted by the Facility Agent,
and
(iii) the processing fees described below shall have
been paid.
From and after the date that the Facility Agent accepts such Lender Assignment
Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to
have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in connection
with such Lender Assignment Agreement, shall have the rights and obligations of
a Lender hereunder and under the other Loan Documents, and (y) the assignor
Lender, to the extent that rights and obligations hereunder have been assigned
and delegated by it in connection with such Lender Assignment Agreement, shall
be released from its obligations hereunder and under the other Loan Documents.
Within five Business Days after its receipt of notice that the Facility Agent
has received an executed Lender Assignment Agreement, the Borrower shall execute
and deliver to the Facility Agent (for delivery to the relevant Assignee Lender)
new Notes evidencing such Assignee Lender's assigned Loans and Commitments and,
if the assignor Lender has retained Loans and Commitments hereunder, replacement
Notes in the principal amount of the Loans and Commitments retained by the
assignor Lender hereunder (such Notes to be in exchange for, but not in payment
of, those Notes then held by such assignor Lender). Each such Note shall be
dated the date of the predecessor Notes. The assignor Lender shall ▇▇▇▇ the
predecessor Notes "exchanged" and deliver them to the Borrower. Accrued interest
on that part of the predecessor Notes evidenced by the new Notes, and accrued
fees, shall be paid as provided in the Lender Assignment Agreement. Accrued
interest on that part of the predecessor Notes evidenced by the replacement
Notes shall be paid to the assignor Lender. Accrued interest and accrued fees
shall be paid at the same time or times provided in the predecessor Notes and in
this Agreement. Such assignor Lender or such Assignee Lender (excluding any
Agent) must also pay a processing fee to the Facility Agent upon delivery of any
Lender Assignment Agreement in the amount of $1,500. Any attempted assignment
and delegation not made in accordance with this SECTION 10.11.1 shall be null
and void.
SECTION 10.11.2. PARTICIPATIONS. Any Lender may at any time sell to one
or more commercial banks or other Persons (each of such commercial banks and
other Persons being herein called a "PARTICIPANT") participating interests in
any of the Loans, Commitments, participations in Letters of Credit and Letter of
Credit Outstandings or other interests of such Lender hereunder; PROVIDED,
HOWEVER, that
(a) no participation contemplated in this SECTION 10.11
shall relieve such Lender from its
104
111
Commitments or its other obligations hereunder or under any other Loan
Document,
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations,
(c) the Borrower and each other Obligor and the Agents shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and each
of the other Loan Documents,
(d) no Participant, unless such Participant is an Affiliate of
such Lender, or is itself a Lender, shall be entitled to require such
Lender to take or refrain from taking any action hereunder or under any
other Loan Document, except that such Lender may agree with any
Participant that such Lender will not, without such Participant's
consent, take any actions of the type described in CLAUSE (b) or (c) of
SECTION 10.1, and
(e) the Borrower shall not be required to pay any amount under
SECTIONS 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 that is greater than the
amount which it would have been required to pay had no participating
interest been sold.
The Borrower acknowledges and agrees that, subject to CLAUSE (e) above, each
Participant, for purposes of SECTIONS 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and
10.4, shall be considered a Lender.
SECTION 10.12. OTHER TRANSACTIONS. Nothing contained herein shall
preclude any Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 10.13. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE
LENDERS OR THE BORROWER SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE
COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE
FACILITY AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL
OR OTHER PROPERTY MAY BE FOUND. THE BORROWER HEREBY EXPRESSLY AND
105
112
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION.
THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY
REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF NEW YORK. THE BORROWER HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER
MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. TO THE EXTENT THAT THE BORROWER HAS OR HEREAFTER MAY ACQUIRE
ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.14. WAIVER OF JURY TRIAL. THE AGENTS, THE ISSUER, THE
LENDERS AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE ISSUER, THE LENDERS OR
THE BORROWER. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND
SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH
OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE AGENTS, THE ISSUER AND THE LENDERS ENTERING INTO
THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 10.15. CONFIDENTIALITY. The Agents, the Issuer, the Arrangers
and the Lenders shall hold all non-public information obtained pursuant to or in
connection with this Agreement or obtained by them based on a review of the
books and records of the Borrower or any of its Subsidiaries in accordance with
their customary procedures for handling confidential information of this nature,
but may make disclosure to any of their examiners, Affiliates, outside auditors,
counsel and other professional advisors in connection with this Agreement or as
reasonably required by any potential BONA FIDE transferee,
106
113
participant or assignee, or in connection with the exercise of remedies under a
Loan Document, or as requested by any governmental agency or representative
thereof or pursuant to legal process; PROVIDED, HOWEVER, that
(a) unless specifically prohibited by applicable law or court
order, each Agent, each Arranger and each Lender shall notify the
Borrower of any request by any governmental agency or representative
thereof (other than any such request in connection with an examination
of the financial condition of such Agent, the Issuer, Arranger and
Lender by such governmental agency) for disclosure of any such
non-public information prior to disclosure of such information;
(b) prior to any such disclosure pursuant to this SECTION
10.15, each Agent, the Issuer, each Arranger and each Lender shall
require any such BONA FIDE transferee, participant and assignee
receiving a disclosure of non-public information to agree in writing.
(i) to be bound by this SECTION 10.15; and
(ii) to require such Person to require any other
Person to whom such Person discloses such non-public
information to be similarly bound by this SECTION 10.15; and
(c) except as may be required by an order of a court of
competent jurisdiction and to the extent set forth therein, no Lender
shall be obligated or required to return any materials furnished by the
Borrower or any Subsidiary.
[Rest of page intentionally left blank]
107
114
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
DAYTON SUPERIOR CORPORATION
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Title: Vice President and Chief Financial
Officer
108
115
DLJ CAPITAL FUNDING, INC.,
as Syndication Agent and as a Lender
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
Title: Managing Director
109
116
BANKERS TRUST COMPANY, as Administrative
Agent and as a Lender
By /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Title: Vice President
110
117
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Documentation Agent and as a
Lender
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
111
118
BANK ONE, N.A., as Facility Agent and as a
Lender
By /s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------------
Title: Vice President
112
119
NATIONAL CITY BANK OF DAYTON, as a Lender
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
---------------------------------
Title: Vice President
113
120
EXHIBIT A
REVOLVING NOTE
$ September 29, 1997
-----------
FOR VALUE RECEIVED, the undersigned, DAYTON SUPERIOR CORPORATION, an Ohio
corporation (the "BORROWER"), promises to pay to the order of
____________________ (the "LENDER") on September 29, 2002 the principal sum of
_________________ DOLLARS ($ ________) or, if less, the aggregate unpaid
principal amount of all Revolving Loans shown on the schedule attached hereto
(and any continuation thereof) made by the Lender pursuant to that certain
Credit Agreement, dated as of September 29, 1997 (together with all amendments
and other modifications, if any, from time to time thereafter made thereto, the
"CREDIT AGREEMENT"), among the Borrower, the various financial institutions as
are or may become parties thereto (collectively, the "LENDERS"), DLJ CAPITAL
FUNDING, INC., as Syndication Agent for the Lenders, BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION, as Documentation Agent for the Lenders, BANKERS
TRUST COMPANY, as Administrative Agent for the Lenders and BANK ONE, N.A., as
Facility Agent for the Lenders (including the Lender).
The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money of
the United States of America in same day or immediately available funds to the
account designated by the Facility Agent pursuant to the Credit Agreement.
This Note is one of the Revolving Notes referred to in, and evidences
Indebtedness incurred under, the Credit Agreement, to which reference is made
for a description of the security for this Note and for a statement of the terms
and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the Indebtedness evidenced by this
Note and on which such Indebtedness may be declared to be immediately due and
payable. Unless otherwise defined, terms used herein have the meanings provided
in the Credit Agreement.
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
1
121
THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE DEEMED TO BE
A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW
YORK.
DAYTON SUPERIOR CORPORATION
By
---------------------------
Title:
2
122
REVOLVING LOANS AND PRINCIPAL PAYMENTS
--------------------------------------------------------------------------------
Interest
Period
(If Ap-
plic-
Date able) Notation
Made By
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
123
--------------------------------------------------------------------------------
Interest
Period
(If Ap-
plic-
Date able) Notation
Made By
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Interest
Period
Amount of (If Ap- Amount of Unpaid
Revolving Loan plic- Principal Principal
DATE Loan Made ABLE) Repaid Balance TOTAL Notation
-------- ---------------- ------------- -------------- -------------- ---------- ------------
Base LIBO Base LIBO Base LIBO
RATE RATE RATE RATE RATE RATE
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
124
EXHIBIT B
TERM NOTE
$ September 29, 1997
-------------
FOR VALUE RECEIVED, the undersigned, DAYTON SUPERIOR CORPORATION, an Ohio
corporation (the "BORROWER"), promises to pay to the order of (the "LENDER") the
principal sum of DOLLARS ($ ) or, if less, the aggregate unpaid principal amount
of all Term Loans shown on the schedule attached hereto (and any continuation
thereof) made by the Lender pursuant to that certain Credit Agreement, dated as
of September 29, 1997 (together with all amendments and other modifications, if
any, from time to time thereafter made thereto, the "CREDIT AGREEMENT"), among
the Borrower, the various financial institutions as are or may become parties
thereto (collectively, the "LENDERS"), DLJ CAPITAL FUNDING, INC., as Syndication
Agent for the Lenders, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Documentation Agent for the Lenders, BANKERS TRUST COMPANY, as Administrative
Agent for the Lenders and BANK ONE, N.A., as Facility Agent for the Lenders
(including the Lender), payable in installments as set forth in the Credit
Agreement, with a final installment (in the amount necessary to pay in full this
Note) due and payable on September 29, 2002.
The Borrower also promises to pay interest on the unpaid principal amount
hereof from time to time outstanding from the date hereof until maturity
(whether by acceleration or otherwise) and, after maturity, until paid, at the
rates per annum and on the dates specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money of
the United States of America in same day or immediately available funds to the
account designated by the Facility Agent pursuant to the Credit Agreement.
This Note is one of the Term Notes referred to in, and evidences
Indebtedness incurred under, the Credit Agreement, to which reference is made
for a description of the security for this Note and for a statement of the terms
and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the Indebtedness evidenced by this
Note and on which such Indebtedness maybe declared to be immediately due and
payable. Unless otherwise defined, terms used herein have the meanings provided
in the Credit Agreement.
125
All parties hereto, whether as makers, endorsers, or otherwise, severally
waive presentment for payment, demand, protest and notice of dishonor.
THIS NOTE HAS BEEN DELIVERED IN NEW YORK, NEW YORK AND SHALL BE DEEMED
TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
DAYTON SUPERIOR CORPORATION
By
--------------------------
Title:
126
TERM A LOANS AND PRINCIPAL PAYMENTS
Interest
Period
Amount of (If Ap- Amount of Unpaid
Revolving Loan plic- Principal Principal
Date Loan Made Able) Repaid Balance Total Notation
-------- ---------------- ------------- -------------- -------------- ---------- ------------
Base LIBO Base LIBO Base LIBO
RATE RATE RATE RATE RATE RATE
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
-------- ---------------- ------------- -------------- -------------- ---------- ------------
127
EXHIBIT C
BORROWING REQUEST
BANK ONE, N.A.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: [Name]
[Title]
DAYTON SUPERIOR CORPORATION
---------------------------
Gentlemen and Ladies:
This Borrowing Request is delivered to you pursuant to Section 2.3 of the
Credit Agreement, dated as of September 29, 1997 (together with all amendments,
if any, from time to time made thereto, the "CREDIT AGREEMENT"), among Dayton
Superior Corporation, an Ohio corporation (the "BORROWER"), the various
financial institutions as are or may become parties thereto (collectively, the
"LENDERS"), DLJ Capital Funding, Inc., as syndication agent for the Lenders,
Bank of America National Trust and Savings Association, as documentation agent
for the Lenders, BANKERS TRUST COMPANY, as Administrative Agent for the Lenders
and Bank One, N.A., as facility agent (the "FACILITY AGENT") for the Lenders.
Unless otherwise defined herein or the context otherwise requires, terms used
herein have the meanings provided in the Credit Agreement.
The Borrower hereby requests that a [Revolving Loan] [Term Loan] be made in
the aggregate principal amount of $__________ on __________, ____ as a [LIBO
Rate Loan having an Interest Period of ______ months] [Base Rate Loan].
The Borrower hereby acknowledges that, pursuant to Section 5.2.2 of the
Credit Agreement, each of the delivery of this Borrowing Request and the
acceptance by the Borrower of the proceeds of the Loans requested hereby
constitute a representation and warranty by the Borrower that, on the date of
such Loans, and before and after giving effect thereto and to the application of
the proceeds therefrom, all statements set forth in Section 5.2.1 are true and
correct in all material respects.
The Borrower agrees that if prior to the time of the Borrowing requested
hereby any matter certified to herein by it will not be true and correct at such
time as if then made, it will immediately so notify the Facility Agent. Except
to the extent, if any, that prior to the time of the Borrowing requested hereby
the Facility Agent shall receive written notice to the
128
contrary from the Borrower, each matter certified to herein shall be deemed once
again to be certified as true and correct at the date of such Borrowing as if
then made.
Please wire transfer the proceeds of the Borrowing to the accounts of the
following persons at the financial institutions indicated respectively:
Person to be Paid
Amount to be ----------------------- Name, Address, etc.
Transferred Name Account No. of Transferee Lender
------------ ---- ----------- --------------------
$
---------- ---------- ----------- --------------------
--------------------
Attention:
--------------------
$
---------- ---------- ----------- --------------------
--------------------
Attention:
--------------------
Balance of The Borrower ----------- --------------------
such proceeds --------------------
Attention:
--------------------
The Borrower has caused this Borrowing Request to be executed and delivered,
and the certification and warranties contained herein to be made, by its
Authorized Officer this day of ________________, _____.
DAYTON SUPERIOR CORPORATION
By
--------------------
Title:
129
EXHIBIT D
ISSUANCE REQUEST
BANK ONE, N.A.
acting as facility agent (the "Facility Agent")
for the Lenders (defined below)
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention:
Re: Credit Agreement, dated as of September 29, 1997 (together
with all amendments, if any, thereafter from time to time
made thereto, the "CREDIT AGREEMENT"), among Dayton Superior
Corporation (the "BORROWER"), various financial institutions
as are or may become parties thereto (collectively, the
"LENDERS"), DLJ Capital Funding, Inc., as Syndication Agent
for the Lenders, Bank of America National Trust and Savings
Association, as Documentation Agent for the Lenders, Bankers
Trust Company, as Administrative Agent for the Lenders and
Bank One, N.A., as Facility Agent for the Lenders
Gentlemen/Ladies:
This Issuance Request is delivered to you pursuant to Section 2.6 of the
Credit Agreement. Unless otherwise defined herein, terms used herein have the
meanings assigned to them in the Credit Agreement.
The Borrower hereby requests that on _________, ____ (the "DATE OF
ISSUANCE") _______________ (the "ISSUER")[issue a Letter of Credit on
______________, ____ in the initial Stated Amount of $_______________ with a
Stated Expiry Date (as defined therein) of ______________, ____] [extend the
Stated Expiry Date (as defined under Irrevocable Standby Letter of Credit No.__,
issued on __________________________, _____, in the initial Stated Amount of
$______________) to a revised Stated Expiry Date (as defined therein) of
_________________, ____].(1)
--------------------
(1) Insert as appropriate
130
The beneficiary of the requested Letter of Credit will be ______________,(1)
and such Letter of Credit will be in support of__________________________.(2)
The Borrower hereby acknowledges that, pursuant to Section 5.2.1 of the
Credit Agreement, each of the delivery of this Issuance Request and the
[issuance][extension] of the Letter of Credit requested hereby constitutes a
representation and warranty by the Borrower that, on such date of [issuance]
[extension] all statements set forth in Section 5.2.1 are true and correct in
all material respects.
The Borrower agrees that if, prior to the time of the [issuance]
[extension](1) of the Letter of Credit requested hereby, any matter certified to
herein by it will not be true and correct at such time as if then made, it will
immediately so notify the Facility Agent. Except to the extent, if any, that
prior to the time of the issuance or extension requested hereby the Facility
Agent and the Issuer shall receive written notice to the contrary from the
Borrower, each matter certified to herein shall be deemed to be certified at the
date of such issuance or extension.
-------------------------------
(1) Insert name and address of beneficiary
(2) Insert description of supported Indebtedness or other obligations and
name of agreement to which it relates.
(3) Complete as appropriate.
131
IN WITNESS WHEREOF, the Borrower has caused this request to be executed and
delivered by its Authorized Officer this ___ day of ____________, ____.
DAYTON SUPERIOR CORPORATION
By
-------------------------
Title:
132
EXHIBIT E
CONTINUATION/CONVERSION NOTICE
BANK ONE, N.A.
▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: [Name]
[Title]
DAYTON SUPERIOR CORPORATION
---------------------------
Gentlemen and Ladies:
This Continuation/Conversion Notice is delivered to you pursuant to Section
2.4 of the Credit Agreement, dated as of September 29, 1997 (together with all
amendments, if any, from time to time made thereto, the "CREDIT AGREEMENT"),
among Dayton Superior Corporation, an Ohio corporation (the "BORROWER"), the
various financial institutions as are or may become parties thereto
(collectively, the "LENDERS"), DLJ Capital Funding, Inc., as syndication agent
for the Lenders, Bank of America National Trust and Savings Association, as
documentation agent for the Lenders, Bankers Trust Company, as Administrative
Agent for the Lenders and Bank One, N.A., as facility agent (the "FACILITY
Agent") for the Lenders. Unless otherwise defined herein or the context
otherwise requires, terms used herein have the meanings provided in the Credit
Agreement.
The Borrower hereby requests that on , 19 ,
------------ ---
(1) $___________ of the presently outstanding
principal amount of the [Term Loans] [Revolving Loans]
originally made on , [and $ of the presently outstanding
principal amount of the [Term Loans] [Revolving Loans]
originally made on , ], _______, ___],
(2) and all presently being maintained as [Base Rate
Loans] [LIBO Rate Loans],1/
(3) be [converted into] [continued as],
(4) [LIBO Rate Loans having an Interest Period of
months] [Base Rate Loans].2/
The Borrower hereby:
----------------------
(1) Select appropriate interest rate option.
(2) Select appropriate interest rate option.
133
(a) certifies and warrants that no Default has occurred and
is continuing; and
(b) agrees that if prior to the time of such continuation or
conversion any matter certified to herein by it will not be true
and correct at such time as if then made, it will immediately so
notify the Facility Agent.
Except to the extent, if any, that prior to the time of the continuation or
conversion requested hereby the Facility Agent shall receive written notice to
the contrary from the Borrower, each matter certified to herein shall be deemed
to be certified at the date of such continuation or conversion as if then made.
The Borrower has caused this Continuation/Conversion Notice to be
executed and delivered, and the certification and warranties contained herein to
be made, by its Authorized Officer this day of , ____.
DAYTON SUPERIOR CORPORATION
By
--------------------------
Title:
134
EXHIBIT F
BORROWING BASE CERTIFICATE
Dayton Superior Corporation
This Borrowing Base Certificate is delivered pursuant to [clause (c) of
Section 5.1.10] [clause (h) of Section 7.1.1] of the Credit Agreement, dated as
of September 29, 1997 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "CREDIT AGREEMENT") among Dayton
Superior Corporation, an Ohio corporation (the "BORROWER"), the various
financial institutions as are or may become parties thereto (the "LENDERS"), DLJ
Capital Funding, Inc., as Syndication Agent, Bankers Trust Company, as
Administrative Agent, Bank of America National Trust and Savings Association, as
Documentation Agent and Bank One, N.A., as Facility Agent. Unless otherwise
defined herein or the context otherwise requires, terms used herein and on the
attached schedules have the meanings provided in the Credit Agreement.
The Borrower hereby certifies, represents and warrants that as of
__________ __, ____ (the "BORROWING BASE CALCULATION DATE"):
1 The book value of all Eligible Accounts as reflected on the books of
the Borrower and its wholly-owned U.S. Subsidiaries, determined on a
consolidated basis and valued in accordance with GAAP, net of all
credits, discounts and allowances in respect of such Eligible Accounts
as of the Borrowing Base Calculation Date is:
$-----------.
2 85% of the amount designated in ITEM 1 above is: $_________.
3 The lesser of the market value and net cost of goods (determined on a
first-in, first-out basis) of all Eligible Inventory as reflected on
the books of the Borrower and its wholly-owned U.S. Subsidiaries,
determined on a consolidated basis and valued in accordance with GAAP
as of the Borrowing Base Calculation Date is $_________.
4 60% of the amount designated in Item 3 above is: $_________.
5 The Borrowing Base Amount (the sum of the amounts designated in ITEM 2
and ITEM 4) is: $_________.
6 As of the date hereof, the aggregate outstanding principal amount of
all Revolving Loans and Letter of Credit Outstandings (after giving
effect to the making of any Revolving Loans and Issuances of any
Letters of Credit being
135
requested on the date of delivery of this Certificate, if any) of the
Borrower is: ________.
7 The excess of the Borrowing Base Amount over the amount set forth in
ITEM 6 is: $_________.
8 The calculations contained herein are based upon book value, determined
in accordance with GAAP and are, in each case, relative to Accounts
which meet the criteria set forth in the Credit Agreement for Eligible
Accounts or relative to Inventory which meets the criteria set forth in
the Credit Agreement for Eligible Inventory, as applicable.
9 The information contained in this Certificate (including the
information upon which the foregoing calculations are based) is
accurate, true and complete in all material respects.
IN WITNESS WHEREOF, the Borrower has caused this Certificate to be
executed and delivered, and the certification, representations and warranties
contained herein to be made, by its Authorized Officer on __________, ____.
DAYTON SUPERIOR CORPORATION
By
--------------------------
Title:
136
EXHIBIT G
BORROWER CLOSING DATE CERTIFICATE
DAYTON SUPERIOR CORPORATION
---------------------------
This Closing Date Certificate (this "CERTIFICATE") is delivered
pursuant to Section 5.1.6 of the Credit Agreement, dated as of September 29,
1997 (as amended, supplemented, amended and restated, or otherwise modified from
time to time, including any refinancing in whole or in part thereof, the "CREDIT
AGREEMENT"), among Dayton Superior Corporation, an Ohio corporation (the
"BORROWER"), the various financial institutions as are, or may from time to time
become, parties thereto (each, individually, a "LENDER", and collectively, the
"LENDERS"), and DLJ Capital Funding, Inc. ("DLJ") as syndication agent (the
"SYNDICATION AGENT") for the Lenders, Bank of America National Trust and Savings
Association ("BANK OF AMERICA"), as documentation Agent (the "DOCUMENTATION
AGENT") for the Lenders, Bankers Trust Company, as administrative agent (the
"ADMINISTRATIVE AGENT") for the Lenders and Bank One, N.A. ("BANK ONE"), as the
facility agent (the "FACILITY AGENT") for the Lenders. Unless otherwise defined
herein, terms used herein have the meanings provided for in the Credit
Agreement.
The undersigned hereby certifies, represents and warrants, for and on
behalf of the Borrower, as of the date of the initial Credit Extension under the
Credit Agreement, as follows:
10 USE OF PROCEEDS, ETC.
---------------------
The proceeds of the Credit Extensions made on the
date hereof by the Lenders to the Borrower have been applied on the
date hereof in accordance with Sections 4.11 and 7.1.10 of the Credit
Agreement.
All Indebtedness identified in Item 7.2.2(b)
("Indebtedness to Be Paid") of the Disclosure Schedule, together with
all interest, prepayment premiums and other amounts due and payable
with respect thereto, has been, or concurrently herewith will be, paid
in full (including, to the extent necessary, from proceeds of the
initial Credit Extension); all commitments relating to any such
Indebtedness have been, or concurrently herewith will be, permanently
terminated; and all Liens securing payment of
137
any such Indebtedness have been, or concurrently herewith will be,
released. Attached hereto as ANNEX I are copies of all Uniform
Commercial Code Form UCC-3 termination statements or other instruments
as are suitable or appropriate in connection therewith.
11 THE TRANSACTION. The Transaction has been, or concurrently herewith
will be, consummated in accordance with law and the Transaction Documents. The
consideration paid on the Closing Date in connection with the Transaction will
not exceed $130,000,000 (including any amounts necessary to pay related
reasonable fees and expenses, which will not exceed $5,000,000). A true and
complete copy of the Transaction Documents and all other agreements, documents,
instruments, certificates, filings, consents, approvals, board of directors
resolutions and opinions furnished in connection therewith, each as amended,
supplemented, amended and restated or otherwise modified from time to time, are
attached hereto as ANNEX II. The Transaction Documents are, or concurrently
herewith will be, in full force and effect and have not been modified or waived
in any material respects, nor has there been any forbearance to exercise any
material rights with respect to any of the terms or provisions relating to the
conditions to the consummation of the Transaction as set forth in the
Transaction Documents that has not been otherwise agreed to by the Required
Lenders.
12 SUBSIDIARY GUARANTY. The Subsidiary Guaranty has been, or
concurrently herewith will be, duly executed by each U.S. Subsidiary of the
Borrower and ▇▇▇▇▇▇ in existence on the date of the initial Credit Extension
(after giving effect to the Transaction). A true and correct copy of the
Guaranty is attached hereto as ANNEX III.
13 PLEDGE AGREEMENTS.
(a) The Borrower Pledge Agreement dated as of the date hereof,
has been, or concurrently herewith will be, duly executed by an
Authorized Officer of the Borrower and the certificates evidencing all
of the issued and outstanding shares of Capital Stock of each U.S.
Subsidiary and 65% of the outstanding shares of Capital Stock of each
Non-U.S. Subsidiary of the Borrower (after giving effect to the
Transaction) pledged pursuant to the Borrower Pledge Agreement, which
are accompanied by undated stock powers duly executed in blank, have
been executed. A true and correct copy of the Borrower Pledge Agreement
and the certificates, accompanied by the undated stock powers, are
attached hereto as ANNEX IV.
(b) The Subsidiary Pledge Agreement, dated as of the date
hereof, has been, or concurrently herewith will be, duly executed by an
Authorized Officer of each U.S.
-4-
138
Subsidiary of the Borrower (after giving effect to the Transaction)
which in turn has any Subsidiary or Subsidiaries, and the certificates
evidencing all of the issued and outstanding shares of Capital Stock of
each such indirect U.S. Subsidiary and 65% of the outstanding shares of
Capital Stock of each such indirect Non-U.S. Subsidiary of such Person
which shall be pledged pursuant to such Subsidiary Pledge Agreement,
which certificates shall in each case be accompanied by undated stock
powers duly executed in blank, have been executed. A true and correct
copy of the Subsidiary Pledge Agreement and the certificates,
accompanied by the undated stock powers, are attached hereto as
ANNEX V.
14 SECURITY AGREEMENTS.
--------------------
(a) The Borrower Security Agreement and the Subsidiary Security
Agreement, have been, or concurrently herewith will be, duly executed
by the Borrower and its U.S. Subsidiaries (after giving effect to the
Transaction). True and correct copies of the Borrower Security
Agreement and the Subsidiary Security Agreement are attached hereto as
ANNEX VI.
(b) Attached hereto as ANNEX VII are (i) executed copies of
Uniform Commercial Code financing statements (Form UCC-1) naming the
Borrower and each such Subsidiary as the debtor and the Facility Agent
as the secured party, or other similar instruments or documents, filed
under the Uniform Commercial Code; (ii) executed copies of proper
Uniform Commercial Code Form UCC-3 termination statements, necessary to
release all Liens and other rights of any Person in any collateral
described in the Security Agreements previously granted by any Person,
and securing any of the Indebtedness identified in ITEM 7.2.2(B)
("Indebtedness to be Paid") of the Disclosure Schedule; and (iii)
certified copies of Uniform Commercial Code Requests for Information or
Copies (Form UCC-11), dated as of September 29, 1997, listing all
effective financing statements which name the Borrower or such
Subsidiary (under their present names and any previous names) as the.
15 LITIGATION, NO ACQUISITION CONTEST. As of the date of the initial
Credit Extension, except as set forth in Item 6.7 ("Litigation") of the
Disclosure Schedule, no litigation, action, proceeding, or labor controversy is
pending or, to the knowledge of the Borrower, threatened, against the Borrower
or its Subsidiaries, or any of their respective properties, businesses, assets
or revenues, which could reasonably be expected to have a Material Adverse
Effect.
16 WARRANTIES, NO DEFAULT, ETC. Both before and after giving effect
to the initial Credit Extension:
-5-
139
the representations and warranties set forth in Article VI
of the Credit Agreement (excluding those in Section 6.7) and each other
Loan Document are true and correct in all material respects with the
same effect as if then made (unless stated to relate solely to an
earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date);
except as disclosed by the Borrower to the Agents and the
Lenders pursuant to SECTION 6.7
no labor controversy, litigation, arbitration or
governmental investigation or proceeding is pending or,
threatened against the Borrower or any of its Subsidiaries
which could reasonably be expected to have a Material Adverse
Effect; and
no development has occurred in any labor
controversy, litigation, arbitration or governmental
investigation or proceeding disclosed pursuant to SECTION 6.7
which could reasonably be expected to have a Material Adverse
Effect;
the sum of (A) the aggregate outstanding principal amount of
all Revolving Loans and (B) the aggregate amount of all Letter of
Credit Outstandings does not exceed the lesser of (x) the then existing
Revolving Loan Commitment Amount and (y) the then applicable Borrowing
Base Amount currently in effect; and
no Default has occurred and is continuing, and neither the
Borrower, any other Obligor, nor any of its Subsidiaries are in
material violation of any law or governmental regulation or court order
or decree;
the execution, delivery and performance of the Credit
Agreement, the Notes and each other Loan Document executed or to be
executed by the Borrower, and the execution, delivery and performance
by each other Obligor of each Loan Document executed or to be executed
by it and the Borrower's and each such other Obligor's participation in
the consummation of the Transaction are within the Borrower's and each
such Obligor's corporate powers, have been duly authorized by all
necessary corporate action, and do not
contravene the Borrower's or any such Obligor's
Organic Documents;
contravene any contractual restriction, law or
governmental regulation or court decree or order
-6-
140
binding on or affecting the Borrower or any such Obligor; or
result in, or require the creation or imposition
of, any Lien on any of Obligor's properties (other than any
Lien permitted under Section 7.2.3 or 7.3.3 of the Credit
Agreement);
no authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or other Person is required for the due execution, delivery or
performance by the Borrower or any other Obligor of the Credit
Agreement, the Notes or any other Loan Document to which it is a party,
or for the Borrower's and each such Obligor's participation in the
consummation of the Transaction, except as have been duly obtained or
made and are in full force and effect and neither the Borrower nor any
of its Subsidiaries is an "investment company" within the meaning of
the Investment Company Act of 1940, as amended, or a "holding company",
or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act
of 1935, as amended; and
each of the Credit Agreement, the Notes, and each other Loan
Document executed and delivered by the Borrower constitutes the legal,
valid and binding obligations of the Borrower enforceable in accordance
with their respective terms; and each Loan Document executed pursuant
hereto by each other Obligor will, on the due execution and delivery
thereof by such Obligor, be the legal, valid and binding obligation of
such Obligor enforceable in accordance with its terms.
17 DELIVERY OF NOTES. The Agents have received, for the account of
each Lender, its Notes duly executed and delivered.
18 MATERIAL ADVERSE EFFECT. Since December 31, 1996, there has been no
event, circumstance or condition which would reasonably be deemed to have a
Material Adverse Effect.
19 CONDITIONS. All conditions to the initial Credit Extension as set
forth in Article V of the Credit Agreement have been satisfied in full, except
as waived or modified in writing by the Agents.
20 INSURANCE. Attached hereto as ANNEX X are true and complete copies
of the existence of insurance in compliance with Section 7.1.4 of the Credit
Agreement (including all endorsements included therein), and the Facility Agent
has been named
-7-
141
additional insured or loss payee, on behalf of the Lenders, in respect of all
proceeds payable in respect of such insurance.
21 FINANCIAL INFORMATION. Attached as ANNEX XI is,
(a) (i) the audited consolidated income and cash flow
statements and balance sheets of the Borrower and its Subsidiaries for
each of the Fiscal Years ended December 31, 1994, December 31, 1995 and
December 31, 1996; (ii) the audited consolidated income and cash flow
statements and balance sheets of ▇▇▇▇▇▇ and its Subsidiaries for each
of the Fiscal Years ended August 31, 1994, August 31, 1995 and August
31, 1996; (iii) the unaudited consolidated income and cash flow
statements and balance sheets of (x) the Borrower and its Subsidiaries
for the first and second Fiscal Quarters of 1997 and (y) ▇▇▇▇▇▇ and its
Subsidiaries for the first, second and third Fiscal Quarters of 1997;
and (iv) the most recently available unaudited consolidated monthly
income and cash flow statements and balance sheets of (x) the Borrower
and its Subsidiaries for each Fiscal Month ended since the end of the
second Fiscal Quarter of 1997 and (y) ▇▇▇▇▇▇ and its Subsidiaries for
each Fiscal Month ended since the end of the third Fiscal Quarter of
1997;
(b) a PRO FORMA opening consolidated balance sheet of the
Borrower and its Subsidiaries as of the Closing Date, certified by an
Authorized Officer of the Borrower, giving effect to the consummation
of the Transaction contemplated by the Credit Agreement and reflecting
the proposed legal and capital structure of the Borrower; and
(c) a Borrowing Base Certificate calculated as of June 30,
1997.
-8-
142
IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed and delivered, and the certification, representations and warranties
contained herein to be duly made, by an authorized officer this 29th day of
September, 1997.
DAYTON SUPERIOR CORPORATION
By:
-------------------------
Title:
143
EXHIBIT H
COMPLIANCE CERTIFICATE
Dayton Superior Corporation
This Compliance Certificate is delivered pursuant to clause (c) of
Section 7.1.1 of the Credit Agreement, dated as of September 29, 1997 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among Dayton Superior Corporation, an Ohio
corporation (the "BORROWER"), the various financial institutions as are, or may
from time to time become, parties thereto as Lenders, and the Agents. Unless
otherwise defined herein or the context otherwise requires, terms used herein or
in any of the attachments hereto have the meanings provided in the Credit
Agreement.
The Borrower hereby certifies, represents and warrants in respect of
the period (the "COMPUTATION PERIOD") commencing on _____________, and ending on
___________ (such latter date being the "COMPUTATION DATE"):
(d) As of the Computation Date, no Default had occurred and
was continuing.
(e) EBITDA was $________.
(f) The Leverage Ratio was within the maximum Leverage Ratio
permitted pursuant to clause (a) of Section 7.2.4 of the Credit
Agreement on the Computation Date.
(g) The Fixed Charge Coverage Ratio was within the minimum
Fixed Charge Coverage Ratio permitted pursuant to clause (b) of Section
7.2.4 of the Credit Agreement on the Computation Date.
Except as indicated on ITEM A of ATTACHMENT 1 hereto, the chief
executive office of the Borrower or any U.S. Subsidiary where the Borrower or
any such Subsidiary keeps its records concerning the Receivables, and all
originals of all chattel paper which evidences Receivables, is located as set
forth on the relevant Item of the relevant Security Agreement or in a previous
Compliance Certificate.
Neither the Borrower nor any U.S. Subsidiary has changed its legal
name, used any tradename (except as listed in the Borrower Security Agreement or
the Subsidiary Security Agreement (as applicable)) or been the subject of any
merger or other corporate reorganization except (i) as indicated on ITEM B of
ATTACHMENT 1
144
hereto, (ii) as set forth on the relevant Item of the relevant Security
Agreement or (iii) as set forth in a previous Compliance Certificate.
IN WITNESS WHEREOF, the Borrower has caused this Compliance Certificate
to be executed and delivered, and the certification and warranties contained
herein to be made, by its Authorized Officer on _______________.
DAYTON SUPERIOR CORPORATION
By________________________
Title:
-2-
145
Attachment 1
(to __/__/__ Compliance
Certificate)
Item A. Change of Place of Business, Etc.
---------------------------------
Name of Borrower or Subsidiary New Address
------------------------------ -----------
1.
2.
3.
Item B. Change Of Trade or Legal Names
------- ------------------------------
New Trade Name or
Name Of Borrower or Subsidiary New Legal Name
------------------------------ --------------
1.
2.
3.
146
EXHIBIT I
SUBSIDIARY GUARANTY
-------------------
This SUBSIDIARY GUARANTY (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "GUARANTY"), dated as of
September 29, 1997, is made by each of the signatories hereto and each other
Person which may from time to time hereafter become a party hereto pursuant to
SECTION 5.5 (each, individually, an "ADDITIONAL GUARANTOR", and, collectively,
the "ADDITIONAL GUARANTORS", and, together with each of the signatories hereto,
each, individually, a "GUARANTOR", and, collectively, the "GUARANTORS"), in
favor of BANK ONE, N.A., as facility agent (together with its successor(s)
thereto, in such capacity the "FACILITY AGENT") for each of the Secured Parties.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of September 29,
1997 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "CREDIT AGREEMENT"), among Dayton Superior Corporation, an
Ohio corporation (the "BORROWER"), the various financial institutions as are, or
may from time to time become, parties thereto (each, individually, a "LENDER",
and collectively, the "LENDERS"), DLJ Capital Funding, Inc., as the Syndication
Agent for the Lenders, Bank of America National Trust and Savings Association,
as the Documentation Agent for the Lenders, Bankers Trust Company, as the
Administrative Agent for the Lenders and the Facility Agent, the Lenders have
extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
each Guarantor is required to execute and deliver this Guaranty; and
WHEREAS, each Guarantor has duly authorized the execution, delivery
and performance of this Guaranty; and
WHEREAS, it is in the best interests of each Guarantor to execute
this Guaranty inasmuch as each Guarantor will derive substantial direct and
indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders pursuant to the Credit Agreement;
147
NOW THEREFORE, for good and valuable consideration the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Credit
Extensions (including the initial Credit Extension) to the Borrower pursuant to
the Credit Agreement, each Guarantor agrees, for the benefit of each Secured
Party, as follows:
ARTICLE I
DEFINITIONS
SECTION I.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Guaranty, including its preamble and recitals,
shall have the following meanings (such definitions to be equally applicable to
the singular and plural forms thereof):
"ADDITIONAL GUARANTOR" and "ADDITIONAL GUARANTORS" are defined in the
PREAMBLE.
"BORROWER" is defined in the FIRST RECITAL.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"FACILITY AGENT" is defined in the PREAMBLE.
"GUARANTY" is defined in the PREAMBLE.
"GUARANTOR" and "GUARANTORS" are defined in the PREAMBLE.
"LENDERS" is defined in the FIRST RECITAL.
"SECURED PARTY" means, as the context may require, each Lender, the
Issuer and each Agent and each of their respective successors, transferees and
assigns.
SECTION I.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Guaranty, including
its preamble and recitals, have the meanings provided in the Credit Agreement.
ARTICLE II
GUARANTY PROVISIONS
SECTION II.1. GUARANTY. Each Guarantor hereby absolutely,
unconditionally and irrevocably
148
(a) guarantees the full and punctual payment when
due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of the Borrower
and each other Obligor, now or hereafter existing, whether for
principal, interest, fees, expenses or otherwise (including all such
amounts which would become due but for the operation of the automatic
stay under Section 362(a) of the United States Bankruptcy Code, 11
U.S.C. ss.362(a), and the operation of Sections 502(b) and 506(b) of
the United States Bankruptcy Code, 11 U.S.C. ss.502(b) and
ss.506(b)), and
(b) indemnifies and holds harmless each Secured
Party and each holder of a Note for any and all costs and expenses
(including reasonable attorneys' fees and expenses) incurred by such
Secured Party or such holder, as the case may be, in enforcing any
rights under this Guaranty;
PROVIDED, HOWEVER, that each Guarantor shall be liable under this Guaranty for
the maximum amount of such liability that can be hereby incurred without
rendering this Guaranty, as it relates to such Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount. This Guaranty constitutes a guaranty of payment when due
and not of collection, and each Guarantor specifically agrees that it shall not
be necessary or required that any Secured Party or any holder of any Note
exercise any right, assert any claim or demand or enforce any remedy whatsoever
against the Borrower or any other Obligor (or any other Person) before or as a
condition to the obligations of such Guarantor hereunder.
SECTION II.2. ACCELERATION OF GUARANTY. Each Guarantor agrees that,
in the event of any Default of the nature set forth in clauses (a) through (d)
of Section 8.1.9 of the Credit Agreement, and if such event shall occur at a
time when any of the Obligations of the Borrower and each other Obligor may not
then be due and payable, such Guarantor will pay to the Lenders forthwith the
full amount which would be payable hereunder by such Guarantor if all such
Obligations were then due and payable.
SECTION II.3. GUARANTY ABSOLUTE, ETC. This Guaranty shall in all
respects be a continuing, absolute, unconditional and irrevocable guaranty of
payment, and shall remain in full force and effect until all Obligations of the
Borrower and each other Obligor have been paid in full in cash, all obligations
of each Guarantor hereunder shall have been paid in full in cash, all Letters of
Credit have been terminated or expired, and all Commitments shall have
terminated. Each Guarantor guarantees that the Obligations of the Borrower and
each other Obligor will be paid strictly in accordance with the terms
-7-
149
of the Credit Agreement, the Notes and each other Loan Document under which they
arise, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of any Secured Party
or any holder of any Note with respect thereto. The liability of each Guarantor
under this Guaranty shall be absolute, unconditional and irrevocable
irrespective of:
(a any lack of validity, legality or enforceability of the
Credit Agreement, any Note or any other Loan Document;
(b the failure of any Secured Party or any holder of any Note
(i to assert any claim or demand
or to enforce any right or remedy against the
Borrower, any other Obligor or any other Person
(including any other guarantor (including any
Guarantor)) under the provisions of the Credit
Agreement, any Note, any other Loan Document or
otherwise, or
(ii to exercise any right or
remedy against any other guarantor (including any
Guarantor) of, or collateral securing, any
Obligations of the Borrower or any other Obligor;
(c any change in the time, manner or place of
payment of, or in any other term of, all or any of the Obligations of
the Borrower or any other Obligor, or any other extension, compromise
or renewal of any Obligation of the Borrower or any other Obligor;
(d any reduction, limitation, impairment or
termination of any Obligations of the Borrower or any other Obligor
for any reason, including any claim of waiver, release, surrender,
alteration or compromise, and shall not be subject to (and each
Guarantor hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever by reason
of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Obligations of the Borrower, any other Obligor or
otherwise;
(e any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms
of the Credit Agreement, any Note or any other Loan Document;
(f any addition, exchange, release, surrender or
non-perfection of any collateral, or any amendment to or waiver
150
or release or addition of, or consent to departure from, any other
guaranty, held by any Secured Party or any holder of any Note
securing any of the Obligations of the Borrower or any other
Obligor; or
(g any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable discharge
of, the Borrower, any other Obligor, any surety or any guarantor.
SECTION II.4. REINSTATEMENT, ETC. Each Guarantor agrees that this
Guaranty shall continue to be effective or be reinstated, as the case may be, if
at any time any payment (in whole or in part) of any of the Obligations is
rescinded or must otherwise be restored by any Secured Party or any holder of
any Note, upon the insolvency, bankruptcy or reorganization of the Borrower or
any other Obligor or otherwise, all as though such payment had not been made.
SECTION II.5. WAIVER, ETC. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations of the Borrower or any other Obligor and of this Guaranty and any
requirement that the Facility Agent, any other Secured Party or any holder of
any Note protect, secure, perfect or insure any security interest or Lien, or
any property subject thereto, or exhaust any right or take any action against
the Borrower, any other Obligor or any other Person (including any other
guarantor) or entity or any collateral securing the Obligations of the Borrower
or any other Obligor, as the case may be.
SECTION II.6. POSTPONEMENT OF SUBROGATION, ETC. Each Guarantor hereby
agrees that it will not exercise any rights which it may acquire by way of
rights of subrogation under this Guaranty, by any payment made hereunder or
otherwise, until the prior payment in full in cash of all Obligations of the
Borrower and each other Obligor, the termination or expiration of all Letters of
Credit, and the termination of all Commitments. Any amount paid to any Guarantor
on account of any such subrogation rights prior to the payment in full in cash
of all Obligations of the Borrower and each other Obligor shall be held in trust
for the benefit of the Secured Parties and each holder of a Note and shall
immediately be paid to the Facility Agent for the benefit of the Secured Parties
and each holder of a Note and credited and applied against the Obligations of
the Borrower and each other Obligor, whether matured or unmatured, in accordance
with the terms of the Credit Agreement; PROVIDED, HOWEVER, that if
(a such Guarantor has made payment to the Secured
Parties and each holder of a Note of all or any part of the
Obligations of the Borrower and each other Obligor, and
-9-
151
(b all Obligations of the Borrower and each other
Obligor have been paid in full in cash, all Letters of Credit have
been terminated or expired, and all Commitments have been permanently
terminated,
each Secured Party and each holder of a Note agrees that, at such Guarantor's
request, the Facility Agent, on behalf of the Secured Parties and the holders of
the Notes, will execute and deliver to such Guarantor appropriate documents
(without recourse and without representation or warranty) necessary to evidence
the transfer by subrogation to such Guarantor of an interest in the Obligations
of the Borrower and each other Obligor resulting from such payment by such
Guarantor. In furtherance of the foregoing, for so long as any Obligations,
Letters of Credit or Commitments remain outstanding, each Guarantor shall
refrain from taking any action or commencing any proceeding against the
Borrower or any other Obligor (or any of their respective successors or assigns,
whether in connection with a bankruptcy proceeding or otherwise) to recover any
amount in respect of any payment made under this Guaranty to any Secured Party
or any holder of a Note.
SECTION II.7. RIGHT OF CONTRIBUTION. Each Guarantor hereby agrees
that to the extent that a Guarantor shall have paid more than its proportionate
share of any payment made hereunder, such Guarantor shall be entitled to seek
and receive contribution from and against any other Guarantor hereunder who has
not paid its proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of SECTION 2.6. The
provisions of this SECTION 2.7 shall in no respect limit the obligations and
liabilities of any Guarantor to the Facility Agent and each other Secured Party,
and each Guarantor shall remain liable to the Facility Agent and each other
Secured Party for the full amount by such Guarantor hereunder.
SECTION II.8. SUCCESSORS, TRANSFEREES AND ASSIGNS; TRANSFERS OF NOTES,
ETC. This Guaranty shall:
(a be binding upon each Guarantor, and its successors,
transferees and assigns; and
(b inure to the benefit of and be enforceable by the Facility
Agent and each other Secured Party.
Without limiting the generality of CLAUSE (B), any Lender may assign or
otherwise transfer (in whole or in part) any Note or Loan held by it to any
other Person or entity, and such other Person or entity shall thereupon become
vested with all rights and benefits in respect thereof granted to such Lender
under any Loan Document (including this Guaranty) or otherwise, subject,
however, to any contrary provisions
-10-
152
in such assignment or transfer, and to the provisions of Section 10.11 and
Article IX of the Credit Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION III.1. REPRESENTATIONS AND WARRANTIES. Each Guarantor hereby
represents and warrants for itself unto each Secured Party that the
representations and warranties contained in Article VI of the Credit Agreement
and this ARTICLE III, in each case insofar as applicable to such Guarantor or
such Guarantor's properties, together with all related definitions and ancillary
provisions, all of which are hereby incorporated into this ARTICLE III as though
specifically set forth herein are true and correct in all material respects.
SECTION III.2. ORGANIZATION, ETC. Each Guarantor and each of its
Subsidiaries is a corporation validly organized and existing and in good
standing under the laws of the State of its incorporation, is duly qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction where the nature of its business requires such qualification, and
has full power and authority and holds all requisite governmental licenses,
permits and other approvals to enter into and perform its Obligations under this
Guaranty and each other Loan Document to which it is a party and to own and hold
under lease its property and to conduct its business substantially as currently
conducted by it.
SECTION III.3 DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by each Guarantor of this Guaranty and each other Loan
Document executed or to be executed by it, and the execution, delivery and
performance by each Subsidiary of such Guarantor of each Loan Document executed
or to be executed by it and such Guarantor's and such Subsidiary's participation
in the consummation of the Transaction are within such Guarantor's and such
Subsidiary's corporate powers, have been duly authorized by all necessary
corporate action, and do not
(a contravene such Guarantor's or such Subsidiary's Organic
Documents;
(b contravene any contractual restriction, law or governmental
regulation or court decree or order binding on or affecting such
Guarantor or such Subsidiary; or
(c result in, or require the creation or imposition of, any
Lien on any of such Guarantor's or such Subsidiary's properties.
-11-
153
SECTION III.4 GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or
approval or other action by, and no notice to or filing with, any governmental
authority or regulatory body or other Person is required for the due execution,
delivery or performance by any Guarantor or the Subsidiary of such Guarantor of
this Guaranty or any other Loan Document to which it is a party, or for such
Guarantor's or such Subsidiary's participation in the consummation of the
Transaction, except as have been duly obtained or made and are in full force and
effect. No Guarantor nor any of its Subsidiaries is an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, or a
"holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION III.5. VALIDITY, ETC. This Guaranty and each other Loan
Document executed by each Guarantor will, on the due execution and delivery
thereof, constitute, the legal, valid and binding obligations of such Guarantor
enforceable in accordance with their respective terms; and each Loan Document
executed pursuant hereto by each Subsidiary of such Guarantor will, on the due
execution and delivery thereof by such Subsidiary, be the legal, valid and
binding obligation of such Subsidiary enforceable in accordance with its terms,
in each case subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
ARTICLE IV
COVENANTS, ETC.
SECTION IV.1. AFFIRMATIVE COVENANTS. Each Guarantor covenants and
agrees that, until all Letters of Credit have terminated or expired, all
Commitments have terminated, all Obligations have been paid in full in cash and
all obligations of such Guarantor hereunder shall have been paid in full in
cash, such Guarantor will, and will cause each of its Subsidiaries to, perform,
comply with and be bound by all the agreements, covenants and obligations
contained in the Credit Agreement applicable to such Guarantor, such Subsidiary
or their respective properties. Each such agreement, covenant and obligation
contained in the Credit Agreement and all related definitions and ancillary
provisions are hereby incorporated into this Guaranty as though specifically set
forth herein.
154
ARTICLE V
MISCELLANEOUS PROVISIONS
SECTION V.1. LOAN DOCUMENT. This Guaranty is a Loan Document executed
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions thereof.
SECTION V.2. BINDING ON SUCCESSORS, TRANSFEREES AND ASSIGNS;
ASSIGNMENT. In addition to, and not in limitation of, SECTION 2.8, this Guaranty
shall be binding upon each Guarantor and its successors, transferees and assigns
and shall inure to the benefit of and be enforceable by each Secured Party and
each holder of a Note and their respective successors, transferees and assigns
(to the fullest extent provided pursuant to SECTION 2.8); PROVIDED, HOWEVER,
that no Guarantor may assign any of its obligations hereunder without the prior
written consent of all Lenders.
SECTION V.3. AMENDMENTS, ETC. No amendment to or waiver of any
provision of this Guaranty, nor consent to any departure by any Guarantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Facility Agent (on behalf of the Lenders or the Required
Lenders, as the case may be) and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION V.4. NOTICES. All notices and other communications provided
for hereunder shall be in writing and mailed or telecopied or delivered, if to a
Guarantor, to such Guarantor in care of the Borrower at the address of the
Borrower specified in the Credit Agreement, and, if to the Facility Agent, to
the Facility Agent at the address of the Facility Agent specified in the Credit
Agreement, or as to any party, at such other address as shall be designated by
such party in a written notice to the Facility Agent or the Guarantors (in care
of the Borrower), as the case may be, complying as to delivery with the terms of
this Section. All such notices and other communications, if mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any such notice or
communication, if transmitted by facsimile, shall be deemed given when the
confirmation thereof is received by the transmitter.
SECTION V.5. ADDITIONAL GUARANTORS. Upon the execution and delivery
by any other Person of an instrument in the form of ANNEX I hereto, such Person
shall become a "Guarantor" hereunder with the same force and effect as if
originally named as a Guarantor herein. The execution and delivery of any such
instrument shall not require the consent of any other Guarantor hereunder. The
rights and obligations
-13-
155
of each Guarantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Guarantor as a party to this
Guaranty.
SECTION V.6. NO WAIVER; REMEDIES. In addition to, and not in limitation
of, SECTION 2.3 and SECTION 2.5, no failure on the part of any Secured Party or
any holder of a Note to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
SECTION V.7. CAPTIONS. Section captions used in this Guaranty are for
convenience of reference only, and shall not affect the construction of this
Guaranty.
SECTION V.8. SETOFF. In addition to, and not in limitation of, any
rights of any Secured Party or any holder of a Note under applicable law, each
Secured Party and each such holder shall, upon the occurrence of any Default
described in any of clauses (a) through (d) of Section 8.1.9 of the Credit
Agreement or, with the consent of the Required Lenders, upon the occurrence of
any Event of Default, have the right to appropriate and apply to the payment of
the obligations of any Guarantor owing to it hereunder, whether or not then due,
and such Guarantor hereby grants to each Secured Party and each such holder a
continuing security interest in, any and all balances, credits, deposits,
accounts or moneys of such Guarantor then or thereafter maintained with such
Secured Party, or such holder or any agent or bailee for such Secured Party or
such holder; PROVIDED, HOWEVER, that any such appropriation and application
shall be subject to the provisions of Section 4.8 of the Credit Agreement.
SECTION V.9. SEVERABILITY. Wherever possible each provision of this
Guaranty shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
SECTION V.10. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS GUARANTY
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK). THIS GUARANTY AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
156
SECTION V.11. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES
OR THE GUARANTORS SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF
THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT
AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE FACILITY AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS
TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF
ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. EACH GUARANTOR
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL,
POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK.
EACH GUARANTOR HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. TO THE EXTENT THAT ANY GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY
IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER
THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF
EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH GUARANTOR
HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
GUARANTY AND THE OTHER LOAN DOCUMENTS.
SECTION V.12. WAIVER OF JURY TRIAL. THE FACILITY AGENT AND THE
GUARANTORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHTS THEY
MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR
ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS GUARANTY OR ANY OTHER LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE SECURED PARTIES OR THE GUARANTORS. EACH GUARANTOR
ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION
FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO
WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
SECURED PARTIES ENTERING INTO THIS GUARANTY AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION V.13. COUNTERPARTS. This Guaranty may be executed by the
parties hereto in several counterparts, each of which shall be
-15-
157
deemed to be an original and all of which shall constitute together but one and
the same agreement.
-16-
158
IN WITNESS WHEREOF, the parties hereto have caused this Guaranty to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
▇▇▇▇▇▇ CORPORATION
By
----------------------------
Name:
Title:
OMNI INVESTORS, INC.
By
----------------------------
Name:
Title:
DUR-O-WAL, INC.
By
----------------------------
Name:
Title:
ACCEPTED BY:
BANK ONE, N.A.,
as Facility Agent
By
---------------------------
Name:
Title:
-17-
159
ANNEX I to
Subsidiary Guaranty
SUPPLEMENT NO. ___ dated as of ________________, 19__
(this "SUPPLEMENT"), to the Subsidiary Guaranty, dated as of
September 29, 1997 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the
"GUARANTY"), among the initial signatories thereto and each
other Person which from time to time thereafter became a party
thereto pursuant to Section 5.5 thereof (each, individually, a
"GUARANTOR", and, collectively, the "GUARANTORS"), in favor of
the Secured Parties (as defined in the Guaranty).
W I T N E S S E T H:
WHEREAS, capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Guaranty; and
WHEREAS, the Guaranty provides that additional parties may become
Guarantors under the Guaranty by execution and delivery of an instrument in the
form of this Supplement; and
WHEREAS, pursuant to the provisions of Section 5.5 of the Guaranty, the
undersigned is becoming an Additional Guarantor under the Guaranty; and
WHEREAS, the undersigned desires to become a Guarantor under the
Guaranty in order to induce the Secured Parties to continue to make Loans under
the Credit Agreement as consideration therefor;
NOW, THEREFORE, the undersigned agrees, for the benefit of each Secured
Party, as follows:
SECTION I. In accordance with the Guaranty, the undersigned by its
signature below becomes a Guarantor under the Guaranty with the same force and
effect as if it were an original signatory thereto as a Guarantor and the
undersigned hereby (a) agrees to all the terms and provisions of the Guaranty
applicable to it as a Guarantor thereunder and (b) represents and warrants that
the representations and warranties made by it as a Guarantor thereunder are true
and correct in all material respects on and as of the date hereof. In
furtherance of the foregoing, each reference to a "Guarantor" or an "Additional
Guarantor" in the Guaranty shall be deemed to include the undersigned.
160
SECTION II. The undersigned hereby represents and warrants that this
Supplement has been duly authorized, executed and delivered by the undersigned
and constitutes a legal, valid and binding obligation of the undersigned,
enforceable against it in accordance with its terms.
SECTION III. Except as expressly supplemented hereby, the Guaranty
shall remain in full force and effect in accordance with its terms.
SECTION IV. In the event any one or more of the provisions contained in
this Supplement should be held invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein and in the Guaranty shall not in any way be affected or impaired.
SECTION V. Without limiting the provisions of the Credit Agreement (or
any other Loan Document, including the Guaranty), the undersigned agrees to
reimburse the Facility Agent for its reasonable out-of-pocket expenses in
connection with this Supplement, including reasonable attorneys' fees and
expenses of the Facility Agent.
SECTION VI. THIS SUPPLEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH
PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE
OF NEW YORK).
SECTION VII. WITHOUT LIMITING THE EFFECT ON SECTION 5.11 OF THE
GUARANTY, ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS SUPPLEMENT, THE GUARANTY OR ANY OTHER LOAN DOCUMENT, OR
ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN)
OR ACTIONS OF THE SECURED PARTIES OR THE UNDERSIGNED SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT THE FACILITY AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE UNDERSIGNED HEREBY
EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE
OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION
WITH SUCH LITIGATION. THE UNDERSIGNED FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF NEW YORK. THE UNDERSIGNED
161
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE UNDERSIGNED HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE UNDERSIGNED HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
SUPPLEMENT, THE GUARANTY AND THE OTHER LOAN DOCUMENTS.
SECTION VIII. WITHOUT LIMITING THE EFFECT OF SECTION 5.12 OF THE
GUARANTY, THE UNDERSIGNED HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS SUPPLEMENT, THE
GUARANTY OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY SECURED PARTY OR
THE UNDERSIGNED. THE UNDERSIGNED ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION
OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE SECURED PARTY ENTERING INTO THIS SUPPLEMENT, THE
GUARANTY AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION IX. This Supplement hereby incorporates by reference the
provisions of the Guaranty, which provisions are deemed to be a part hereof, and
this Supplement shall be deemed to be a part of the Guaranty.
SECTION X. This Supplement may be executed by the parties hereto in
several counterparts, each of which shall be deemed to be an original and all of
which shall constitute together but one and the same agreement.
-3-
162
IN WITNESS WHEREOF, the parties hereto have caused this Supplement to
the Guaranty to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
[ADDITIONAL GUARANTOR]
By
----------------------------
Name:
Title:
ACCEPTED BY:
BANK ONE, N.A.,
as Facility Agent
By
----------------------------
Name:
Title:
-4-
163
EXHIBIT J-1
BORROWER PLEDGE AGREEMENT
This BORROWER PLEDGE AGREEMENT (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "PLEDGE AGREEMENT"),
dated as of September 29, 1997, is made by DAYTON SUPERIOR CORPORATION, an Ohio
corporation (the "PLEDGOR"), in favor of BANK ONE, N.A., as facility agent
(together with its successor(s) thereto, in such capacity the "FACILITY AGENT")
for each of the Secured Parties.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of September 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among the Pledgor, the various financial
institutions as are, or may from time to time become, parties thereto (each,
individually, a "LENDER", and collectively, the "LENDERS"), DLJ Capital Funding,
Inc., as the Syndication Agent for the Lenders, Bank of America National Trust
and Savings Association, as the Documentation Agent for the Lenders, Bankers
Trust Company, as the Administrative Agent for the Lenders and the Facility
Agent, the Lenders have extended Commitments to make Credit Extensions to the
Pledgor;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Pledgor is required to execute and deliver this Pledge Agreement; and
WHEREAS, the Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to make Credit Extensions (including the initial Credit Extension) to the
Pledgor pursuant to the Credit Agreement, the Pledgor agrees, for the benefit of
each Secured Party, as follows:
ARTICLE _______________
DEFINITIONS
164
SECTION _ CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"COLLATERAL" is defined in SECTION 2.1.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"DISTRIBUTIONS" means all stock dividends, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock constituting Collateral, but shall not include Dividends.
"DIVIDENDS" means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business and not a liquidating dividend.
"FACILITY AGENT" is defined in the PREAMBLE.
"LENDER" and "LENDERS" are defined in the FIRST RECITAL.
"PLEDGE AGREEMENT" is defined in the PREAMBLE.
"PLEDGED NOTE ISSUER" means each Person identified in ITEM A of
ATTACHMENT 1 hereto as the issuer of the Pledged Note identified opposite the
name of such Person.
"PLEDGED NOTES" means all promissory notes of any Pledged Note Issuer
substantially the form of EXHIBIT A hereto which are delivered by the Pledgor to
the Facility Agent as Pledged Property hereunder, as such promissory notes, in
accordance with SECTION 4.5, are amended, modified or supplemented from time to
time, together with any promissory note of any Pledged Note Issuer taken in
extension or renewal thereof or substitution therefor.
"PLEDGED PROPERTY" means all Pledged Shares, all Pledged Notes, and all
other pledged shares of capital stock or promissory notes, all other securities,
all assignments of any amounts due or to become due, all other instruments which
are now being delivered by the Pledgor to the Facility Agent or may from time to
time hereafter be delivered by the Pledgor to the Facility Agent for the purpose
of pledge under this Pledge Agreement or any other Loan Document, and all
proceeds of any of the foregoing.
"PLEDGED SHARE ISSUER" means each Person identified in ITEM B of
ATTACHMENT 1 hereto as the issuer of the Pledged Shares identified opposite the
name of such Person.
-6-
165
"PLEDGED SHARES" means all shares of capital stock of any Pledged Share
Issuer which are delivered by the Pledgor to the Facility Agent as Pledged
Property hereunder.
"PLEDGOR" is defined in the PREAMBLE.
"SECURED PARTY" means, as the context may require, any Lender, the
Issuer and each Agent and each of their respective successors, transferees and
assigns.
"SECURITIES ACT" is defined in SECTION 6.2.
"U.C.C." means the Uniform Commercial Code, as in effect from time to
time in the State of New York.
SECTION _ CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined herein
or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION _ U.C.C. DEFINITIONS. Unless otherwise defined herein or the
Credit Agreement or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Pledge Agreement, including its preamble
and recitals, with such meanings.
ARTICLE _______________
PLEDGE
SECTION _ GRANT OF SECURITY INTEREST. The Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to the
Facility Agent, for its benefit and the ratable benefit of each of the Secured
Parties, and hereby grants to the Facility Agent, for its benefit and the
ratable benefit of the Secured Parties, a continuing security interest in, all
of the following property (the "COLLATERAL"):
___ all promissory notes of each Pledged Note Issuer identified in ITEM
A of ATTACHMENT 1 hereto;
___ all other Pledged Notes issued from time to time;
___ all issued and outstanding shares of capital stock of each Pledged
Share Issuer identified in ITEM B of ATTACHMENT 1 hereto; ------ ------------
___ all other Pledged Shares issued from time to time;
-7-
166
___ all other Pledged Property, whether now or
hereafter delivered to the Facility Agent in connection with
this Pledge Agreement;
___ all Dividends, Distributions, interest, and other
payments and rights with respect to any Pledged Property; and
___ all proceeds of any of the foregoing.
SECTION _ SECURITY FOR OBLIGATIONS. This Pledge Agreement secures the
payment in full in cash of all Obligations of the Pledgor now or hereafter
existing under the Credit Agreement, the Notes and each other Loan Document to
which the Pledgor is or may become a party, whether for principal, interest,
costs, fees, expenses, or otherwise.
SECTION _ DELIVERY OF PLEDGED PROPERTY. All certificates or instruments
representing or evidencing any Collateral, including all Pledged Shares and all
Pledged Notes, shall be delivered to and held by or on behalf of (and, in the
case of the Pledged Notes, endorsed to the order of) the Facility Agent pursuant
hereto, shall be in suitable form for transfer by delivery, and shall be
accompanied by all necessary instruments of transfer or assignment, duly
executed in blank.
SECTION _ DIVIDENDS ON PLEDGED SHARES AND PAYMENTS ON PLEDGED NOTES. In
the event that any Dividend is to be paid on any Pledged Share or any payment of
principal or interest is to be made on any Pledged Note at a time when no
Default of the nature referred to in Section 8.1.9 of the Credit Agreement or
Event of Default has occurred and is continuing or would result therefrom, such
Dividend or payment may be paid directly to the Pledgor. If any such Default or
Event of Default has occurred and is continuing, then any such Dividend or
payment shall be paid directly to the Facility Agent.
SECTION _ CONTINUING SECURITY INTEREST; TRANSFER OF NOTE. This Pledge
Agreement shall create a continuing security interest in the Collateral and
shall
___ remain in full force and effect until payment in full in
cash of all Obligations, the termination or expiration of all Letters
of Credit and the termination of all Commitments,
___ be binding upon the Pledgor and its successors,
transferees and assigns, and
___ inure, together with the rights and remedies of the
Facility Agent hereunder, to the benefit of the Facility Agent and each
other Secured Party.
Without limiting the foregoing CLAUSE (C), any Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan held by it to any other Person
or entity, and such other Person or entity shall thereupon become vested with
all the rights and benefits in respect
-8-
167
thereof granted to such Lender under any Loan Document (including this Pledge
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 10.11 and Article IX of
the Credit Agreement. Upon (i) the sale, transfer or other disposition of
Collateral in accordance with the Credit Agreement or (ii) the payment in full
in cash of all Obligations, the termination or expiration of all Letters of
Credit and the termination of all Commitments, the security interest granted
herein shall automatically terminate with respect to (x) such Collateral (in the
case of CLAUSE (I)) or (y) all Collateral (in the case of CLAUSE (II)). Upon any
such termination, the Facility Agent will, at the Pledgor's sole expense,
deliver to the Pledgor, without any representations, warranties or recourse of
any kind whatsoever, all certificates and instruments representing or evidencing
all Pledged Shares and all Pledged Notes, together with all other Collateral
held by the Facility Agent hereunder, and execute and deliver to the Pledgor
such documents as the Pledgor shall reasonably request to evidence such
termination.
ARTICLE _______________
REPRESENTATIONS AND WARRANTIES
SECTION _ REPRESENTATIONS AND WARRANTIES, ETC. The Pledgor represents
and warrants unto each Secured Party, as at the date of each pledge and delivery
hereunder (including each pledge and delivery of Pledged Shares and each pledge
and delivery of a Pledged Note) by the Pledgor to the Facility Agent of any
Collateral, as set forth in this Article.
SECTION 3.1.1. OWNERSHIP, NO LIENS, ETC. The Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) such Collateral, free and clear of all
liens, security interests, options, or other charges or encumbrances, except any
lien or security interest granted pursuant hereto in favor of the Facility Agent
or otherwise permitted under the Credit Agreement.
SECTION 3.1.2. VALID SECURITY INTEREST. The execution and delivery of
this Agreement, together with the delivery of such Collateral to the Facility
Agent is effective to create a valid, perfected, first priority security
interest in such Collateral and all proceeds thereof, securing the Obligations.
Possession by the Facility Agent of the Collateral is the only action necessary
to perfect or protect such security interest in the Collateral, subject to
Section 9-306 of the U.C.C.
SECTION 3.1.3. AS TO PLEDGED SHARES. In the case of any Pledged Shares
constituting such Collateral, all of such Pledged Shares are duly authorized and
validly issued, fully paid, and non-assessable, and constitute all of the issued
and outstanding shares of capital stock of each Pledged Share Issuer. The
Pledgor has no Subsidiaries
-9-
168
other than the Pledged Share Issuers, except as set forth in ITEM C of
ATTACHMENT 1.
SECTION 3.1.4. AS TO PLEDGED NOTES. In the case of any Pledged Note
constituting such Collateral, all of such Pledged Notes have been duly
authorized, executed, endorsed, issued and delivered, and are the legal, valid
and binding obligation of the issuers thereof, and are not in default.
SECTION 3.1.5. AUTHORIZATION, APPROVAL, ETC. No authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other Person is required either
___ for the pledge by the Pledgor of any Collateral pursuant
to this Pledge Agreement or for the execution, delivery, and
performance of this Pledge Agreement by the Pledgor, or
___ for the exercise by the Facility Agent of the voting or
other rights provided for in this Pledge Agreement, or, except with
respect to any Pledged Shares, as may be required in connection with a
disposition of such Pledged Shares by laws affecting the offering and
sale of securities generally, the remedies in respect of the Collateral
pursuant to this Pledge Agreement.
SECTION 3.1.6. COMPLIANCE WITH LAWS. The Pledgor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to materially and
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.
-10-
169
ARTICLE _______________
COVENANTS
SECTION _ PROTECT COLLATERAL; FURTHER ASSURANCES, ETC. The Pledgor will
not sell, assign, transfer, pledge, or encumber in any other manner the
Collateral (except in favor of the Facility Agent hereunder). The Pledgor will
warrant and defend the right and title herein granted unto the Facility Agent in
and to the Collateral (and all right, title, and interest represented by the
Collateral) against the claims and demands of all Persons whomsoever. The
Pledgor agrees that at any time, and from time to time, at the expense of the
Pledgor, the Pledgor will promptly execute and deliver all further instruments,
and take all further action, that may be necessary or desirable, or that the
Facility Agent may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable the
Facility Agent to exercise and enforce its rights and remedies hereunder with
respect to any Collateral.
SECTION _ STOCK POWERS, ETC. The Pledgor agrees that all Pledged Shares
(and all other shares of capital stock constituting Collateral) delivered by the
Pledgor pursuant to this Pledge Agreement will be accompanied by duly executed
undated blank stock powers, or other equivalent instruments of transfer
acceptable to the Facility Agent. The Pledgor will, from time to time upon the
request of the Facility Agent, promptly deliver to the Facility Agent such stock
powers, instruments, and similar documents, satisfactory in form and substance
to the Facility Agent, with respect to the Collateral as the Facility Agent may
reasonably request and will, from time to time upon the request of the Facility
Agent after the occurrence of any Event of Default, promptly transfer any
Pledged Shares or other shares of common stock constituting Collateral into the
name of any nominee designated by the Facility Agent.
SECTION _ CONTINUOUS PLEDGE. The Pledgor will, at all times, keep
pledged to the Facility Agent pursuant hereto all Pledged Shares and all other
shares of capital stock constituting Collateral, all Dividends and Distributions
with respect thereto, all Pledged Notes, all interest, principal and other
proceeds received by the Facility Agent with respect to the Pledged Notes, and
all other Collateral and other securities, instruments, proceeds, and rights
from time to time received by or distributable to the Pledgor in respect of any
Collateral and will not permit any Pledged Share Issuer to issue any capital
stock which shall not have been promptly duly pledged hereunder on a first
priority perfected basis.
SECTION _ VOTING RIGHTS; DIVIDENDS, ETC. The Pledgor agrees:
___ after any Default of the nature referred to in Section
8.1.9 of the Credit Agreement or any Event of Default shall have
occurred and be continuing, promptly upon receipt of notice thereof by
the Pledgor and without any request therefor by
-11-
170
the Facility Agent, to deliver (properly endorsed where required hereby
or requested by the Facility Agent) to the Facility Agent all
Dividends, Distributions, all interest, all principal, all other cash
payments, and all proceeds of the Collateral, all of which shall be
held by the Facility Agent as additional Collateral for use in
accordance with SECTION 6.4; and
___ after any Event of Default shall have occurred and be
continuing and the Facility Agent has notified the Pledgor of the
Facility Agent's intention to exercise its voting power under this
SECTION 4.4(B)
__ the Facility Agent may exercise (to the exclusion
of the Pledgor) the voting power and all other incidental
rights of ownership with respect to any Pledged Shares or
other shares of capital stock constituting Collateral and the
Pledgor hereby grants the Facility Agent an irrevocable proxy,
exercisable under such circumstances, to vote the Pledged
Shares and such other Collateral; and
__ promptly to deliver to the Facility Agent such
additional proxies and other documents as may be necessary to
allow the Facility Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by the Pledgor but which the
Pledgor is then obligated to deliver to the Facility Agent, shall, until
delivery to the Facility Agent, be held by the Pledgor separate and apart from
its other property in trust for the Facility Agent. The Facility Agent agrees
that unless an Event of Default shall have occurred and be continuing and the
Facility Agent shall have given the notice referred to in SECTION 4.4(B), the
Pledgor shall have the exclusive voting power with respect to any shares of
capital stock (including any of the Pledged Shares) constituting Collateral and
the Facility Agent shall, upon the written request of the Pledgor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by the Pledgor which are necessary to allow the Pledgor to exercise
voting power with respect to any such share of capital stock (including any of
the Pledged Shares) constituting Collateral; PROVIDED, HOWEVER, that no vote
shall be cast, or consent, waiver, or ratification given, or action taken by the
Pledgor that would impair any Collateral or be inconsistent with or violate any
provision of the Credit Agreement or any other Loan Document (including this
Pledge Agreement).
SECTION _ ADDITIONAL UNDERTAKINGS. The Pledgor will not, without the
prior written consent of the Facility Agent:
___ enter into any agreement amending, supplementing, or
waiving any provision of any Pledged Note (including any underlying
instrument pursuant to which such Pledged Note is issued) or
compromising or releasing or extending the time for payment of any
obligation of the maker thereof; or
-12-
171
___ take or omit to take any action the taking or the omission
of which would result in any impairment or alteration of any obligation
of the maker of any Pledged Note or other instrument constituting
Collateral.
ARTICLE _______________
THE FACILITY AGENT
SECTION _ FACILITY AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
irrevocably appoints the Facility Agent the Pledgor's attorney-in-fact, with
full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time in the Facility Agent's discretion, to
take any action and to execute any instrument which the Facility Agent may
reasonably deem necessary or advisable to accomplish the purposes of this Pledge
Agreement, including after the occurrence and continuance of a Default of the
nature referred to in Section 8.1.9 of the Credit Agreement or an Event of
Default:
___ to ask, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
___ to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with CLAUSE (A)
above; and
___ to file any claims or take any action or institute any
proceedings which the Facility Agent may reasonably deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Facility Agent with respect to any of the
Collateral.
The Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION _ FACILITY AGENT MAY PERFORM. If the Pledgor fails to perform
any agreement contained herein, the Facility Agent may itself perform, or cause
performance of, such agreement, and the expenses of the Facility Agent incurred
in connection therewith shall be payable by the Pledgor pursuant to SECTION 6.4.
SECTION _ FACILITY AGENT HAS NO DUTY. The powers conferred on the
Facility Agent hereunder are solely to protect its interest (on behalf of the
Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Facility Agent shall have no duty as to any Collateral or responsibility for
-13-
172
___ ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Pledged Property, whether or not the Facility Agent has or is
deemed to have knowledge of such matters, or
___ taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION _ REASONABLE CARE. The Facility Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; PROVIDED, HOWEVER, the Facility Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as the Pledgor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Facility Agent to comply
with any such request at any time shall not in itself be deemed a failure to
exercise reasonable care.
ARTICLE _______________
REMEDIES
SECTION _ CERTAIN REMEDIES. If any Event of Default shall have occurred
and be continuing:
___ The Facility Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Collateral) and also may, without notice except
as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of the Facility Agent's
offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Facility Agent may deem commercially
reasonable. The Pledgor agrees that, to the extent notice of sale shall
be required by law, at least ten days' prior notice to the Pledgor of
the time and place of any public sale or the time after which any
private sale is to be made shall constitute reasonable notification.
The Facility Agent shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. The Facility
Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned.
___ The Facility Agent may
__ transfer all or any part of the Collateral into
the name of the Facility Agent or its nominee, with or without
-14-
173
disclosing that such Collateral is subject to the lien and
security interest hereunder,
__ notify the parties obligated on any of the
Collateral to make payment to the Facility Agent of any amount
due or to become due thereunder,
__ enforce collection of any of the Collateral by
suit or otherwise, and surrender, release or exchange all or
any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any
obligations of any nature of any party with respect thereto,
__ endorse any checks, drafts, or other writings in
the Pledgor's name to allow collection of the Collateral,
__ take control of any proceeds of the Collateral,
and
__ execute (in the name, place and stead of the
Pledgor) endorsements, assignments, stock powers and other
instruments of conveyance or transfer with respect to all or
any of the Collateral.
SECTION _ SECURITIES LAWS. If the Facility Agent shall determine to
exercise its right to sell all or any of the Collateral pursuant to SECTION 6.1,
the Pledgor agrees that, upon request of the Facility Agent, the Pledgor will,
at its own expense:
___ execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Facility Agent, advisable to
register such Collateral under the provisions of the Securities Act of
1933, as from time to time amended (the "SECURITIES ACT"), and to cause
the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the opinion of the Facility Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto;
___ use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by
the Facility Agent;
___ cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act; and
-15-
174
___ do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
The Pledgor further acknowledges the impossibility of ascertaining the amount of
damages that would be suffered by the Facility Agent or the Secured Parties by
reason of the failure by the Pledgor to perform any of the covenants contained
in this Section and, consequently, agrees that, if the Pledgor shall fail to
perform any of such covenants, it shall pay, as liquidated damages and not as a
penalty, an amount equal to the value (as determined by the Facility Agent) of
the Collateral on the date the Facility Agent shall demand compliance with this
Section.
SECTION _ COMPLIANCE WITH RESTRICTIONS. The Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Facility Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Pledgor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Facility Agent be liable nor accountable to the
Pledgor for any discount allowed by the reason of the fact that such Collateral
is sold in compliance with any such limitation or restriction.
SECTION _ APPLICATION OF PROCEEDS. All cash proceeds received by the
Facility Agent in respect of any sale of, collection from, or other realization
upon, all or any part of the Collateral may, in the discretion of the Facility
Agent, be held by the Facility Agent as additional collateral security for, or
then or at any time thereafter be applied (after payment of any amounts payable
to the Facility Agent pursuant to Section 10.3 of the Credit Agreement and
SECTION 6.5) in whole or in part by the Facility Agent against, all or any part
of the Obligations in such order as the Facility Agent shall elect.
Any surplus of such cash or cash proceeds held by the Facility Agent
and remaining after payment in full in cash of all the Obligations, the
termination or expiration of all Letters of Credit and the termination of all
Commitments, shall be paid over to the Pledgor or to whomsoever may be lawfully
entitled to receive such surplus.
-16-
175
SECTION _ INDEMNITY AND EXPENSES. The Pledgor hereby indemnifies and
holds harmless the Facility Agent from and against any and all claims, losses,
and liabilities arising out of or resulting from this Pledge Agreement
(including enforcement of this Pledge Agreement), except claims, losses, or
liabilities resulting from the Facility Agent's gross negligence or wilful
misconduct. Upon demand, the Pledgor will pay to the Facility Agent the amount
of any and all reasonable expenses, including the reasonable fees and
disbursements of its counsel and of any experts and agents, which the Facility
Agent may incur in connection with:
___ the administration of this Pledge Agreement, the
Credit Agreement and each other Loan Document;
___ the custody, preservation, use, or operation of,
or the sale of, collection from, or other realization upon,
any of the Collateral;
___ the exercise or enforcement of any of the rights
of the Facility Agent hereunder; or
___ the failure by the Pledgor to perform or observe
any of the provisions hereof.
ARTICLE _______________
MISCELLANEOUS PROVISIONS
SECTION _ LOAN DOCUMENT. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION _ AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Pledge Agreement nor consent to any departure by the Pledgor herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Facility Agent (on behalf of the Lenders or the Required Lenders, as the
case may be), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it is given.
SECTION _ PROTECTION OF COLLATERAL. The Facility Agent may from time to
time, at its option, perform any act which the Pledgor agrees hereunder to
perform and which the Pledgor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default) and the
Facility Agent may from time to time take any other action which the Facility
Agent reasonably deems necessary for the maintenance, preservation or protection
of any of the Collateral or of its security interest therein.
-17-
176
SECTION _ ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and mailed or telecopied or delivered to either party hereto, addressed to such
party at such party's address specified in the Credit Agreement. All such
notices and other communications, when mailed and properly addressed with
postage prepaid or if properly addressed and sent by pre-paid courier service,
shall be deemed given when received; any such notice or communication, if
transmitted by telecopier, shall be deemed given when transmitted and
electronically confirmed.
SECTION _ SECTION CAPTIONS. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION _ SEVERABILITY. Wherever possible each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Pledge Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Pledge Agreement.
SECTION _ COUNTERPARTS. This Pledge Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
SECTION _ GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS PLEDGE AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS PLEDGE AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
-18-
177
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
DAYTON SUPERIOR CORPORATION
By
------------------------------
Name:
Title:
BANK ONE, N.A., as Facility Agent
By
------------------------------
Name:
Title:
-19-
178
EXHIBIT A
to Borrower
Pledge Agreement
PROMISSORY NOTE
$ , 19__
--------------------- ------------
FOR VALUE RECEIVED, the undersigned, [Name of Maker], a _______________
__________ (the "MAKER"), promises to pay to the order of DAYTON SUPERIOR
CORPORATION, an Ohio corporation (the "PAYEE"), in equal ________ installments,
commencing _________, 19__ to and including , 19 , the principal sum of DOLLARS
($ ), representing the aggregate principal amount of an intercompany loan made
by the Payee to the Maker. ------------------------------- -----------
The unpaid principal amount of this promissory note (this "NOTE") from
time to time outstanding shall bear interest at a rate of interest equal to
____________, which the Maker represents to be a lawful and commercially
reasonable rate, payable __________, and all payments of principal of and
interest on this Note shall be payable in lawful currency of the United States
of America. All such payments shall be made by the Maker to an account
established by the Payee at _______________ and shall be recorded on the grid
attached hereto by the holder hereof (including the Facility Agent as pledgee).
Upon notice from the Facility Agent (hereinafter defined) that a Default (as
defined in the Credit Agreement, hereinafter defined) of the nature referred to
in Section 8.1.9 of the Credit Agreement or an Event of Default (as defined in
the Credit Agreement) has occurred and is continuing under the Credit Agreement,
the Maker shall make such payments, in same day funds, to such other account as
the Facility Agent shall direct in such notice.
This Note is one of the Pledged Notes referred to in, and evidences
Indebtedness incurred pursuant to Section 7.2.2 of the Credit Agreement, dated
as of September 29, 1997 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among the Payee,
the various financial institutions as are, or may from time to time become,
parties thereto (each, individually, a "LENDER", and collectively, the
"LENDERS"), DLJ Capital Funding, Inc., as the Syndication Agent for the Lenders,
Bank of America National Trust and Savings Association, as the Documentation
Agent for the Lenders Bankers Trust Company, as Administrative Agent for the
Lenders and Bank One, N.A., as the Facility Agent. Upon the occurrence and
continuance of an Event of Default under the Credit Agreement, and notice
thereof by the Facility Agent to the Maker, the Facility Agent shall have all
rights of the Payee to collect and accelerate, and enforce all rights with
respect to, the Indebtedness evidenced by this Note. Unless otherwise defined
179
herein or the context otherwise requires, terms used herein have the meanings
provided in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the
Pledge Agreement pursuant to which this Note has been pledged to the Facility
Agent as security for the Obligations outstanding from time to time under the
Credit Agreement and each other Loan Document.
In addition to, but not in limitation of, the foregoing, the Maker
further agrees to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder (including the Facility Agent as pledgee)
of this Note endeavoring to collect any amounts payable hereunder which are not
paid when due, whether by acceleration or otherwise.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[NAME OF MAKER]
By
---------------------------------
Name:
Title:
Pay to the order of BANK ONE, N.A.,
as Facility Agent
[NAME OF PAYEE]
By
---------------------------------
Name:
Title:
180
GRID
Intercompany Loans made by Dayton Superior Corporation to [Name of
Maker] and payments of principal of such Loans.
====================================================================================================================
Amount of Amount of Outstanding
Intercompany Principal Principal Notation
Date Loan Payment Balance Made By
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
====================================================================================================================
181
ATTACHMENT 1
to Borrower
Pledge Agreement
Item A. Pledged Notes
-------------
Pledged Note Issuer Description
------------------- -----------
None
Item B. Pledged Shares
--------------
COMMON STOCK
---------------------------------------
Authorized Outstanding % of Shares
Pledged Share Issuer Shares Shares Pledged
-------------------- ---------- ----------- -----------
▇▇▇▇▇▇ Corporation 100%
Omni Investors, Inc. 100%
Dur-O-Wal, Inc. 100%
Dur-O-Wal Limited 65%
Item C. Additional Subsidiaries
-----------------------
182
EXHIBIT J-2
SUBSIDIARY PLEDGE AGREEMENT
---------------------------
This SUBSIDIARY PLEDGE AGREEMENT (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "PLEDGE AGREEMENT"),
dated as of September 29, 1997, is made by each Subsidiary (as defined below) of
the Borrower (as defined below) a signatory hereto (each, individually, a
"PLEDGOR", and collectively, the "PLEDGORS"), in favor of BANK ONE, N.A., as
administrative agent (together with its successor(s) thereto, in such capacity
the "FACILITY AGENT") for each of the Secured Parties.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of September 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among Dayton Superior Corporation, an Ohio
corporation (the "BORROWER"), the various financial institutions as are, or may
from time to time become, parties thereto (each, individually, a "LENDER", and
collectively, the "LENDERS"), DLJ Capital Funding, Inc., as the Syndication
Agent for the Lenders, Bank of America National Trust and Savings Association,
as the Documentation Agent for the Lenders, Bankers Trust Company, as the
Administrative Agent for the Lenders and the Facility Agent, the Lenders have
extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including initial Credit Extension) under the Credit Agreement, each
Pledgor is required to execute and deliver this Pledge Agreement;
WHEREAS, each Pledgor has duly authorized the execution, delivery and
performance of this Pledge Agreement; and
WHEREAS, it is in the best interests of each Pledgor to execute this
Pledge Agreement inasmuch as such Pledgor will derive substantial direct and
indirect benefits from the Credit Extensions made from time to time to the
Borrower by the Lenders pursuant to the Credit Agreement;
183
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to make Credit Extensions (including the initial Credit Extension) to the
Borrower pursuant to the Credit Agreement, each Pledgor agrees, for the benefit
of each Secured Party, as follows:
ARTICLE _______________
DEFINITIONS
SECTION _ CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Pledge Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"BORROWER" is defined in the FIRST RECITAL.
"COLLATERAL" is defined in SECTION 2.1.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"DISTRIBUTIONS" means all stock dividends, liquidating dividends,
shares of stock resulting from (or in connection with the exercise of) stock
splits, reclassifications, warrants, options, non-cash dividends, mergers,
consolidations, and all other distributions (whether similar or dissimilar to
the foregoing) on or with respect to any Pledged Shares or other shares of
capital stock constituting Collateral, but shall not include Dividends.
"DIVIDENDS" means cash dividends and cash distributions with respect to
any Pledged Shares or other Pledged Property made in the ordinary course of
business and not a liquidating dividend.
"FACILITY AGENT" is defined in the PREAMBLE.
"LENDER" and "LENDERS" are defined in the FIRST RECITAL.
"PLEDGE AGREEMENT" is defined in the PREAMBLE.
"PLEDGED NOTE ISSUER" means each Person identified in ITEM A of
ATTACHMENT 1 hereto as the issuer of the Pledged Note identified opposite the
name of such Person.
"PLEDGED NOTES" means all promissory notes of any Pledged Note Issuer
in substantially the form of EXHIBIT A hereto which are delivered by any Pledgor
to the Facility Agent as Pledged
-6-
184
Property hereunder, as such promissory notes, in accordance with SECTION 4.1.5,
are amended, modified or supplemented from time to time, together with any
promissory note of any Pledged Note Issuer taken in extension or renewal thereof
or substitution therefor.
"PLEDGED PROPERTY" means all Pledged Shares, all Pledged Notes, and all
other pledged shares of capital stock or promissory notes, all other securities,
all assignments of any amounts due or to become due, all other instruments which
are now being delivered by any Pledgor to the Facility Agent or may from time to
time hereafter be delivered by such Pledgor to the Facility Agent for the
purpose of pledge under this Pledge Agreement or any other Loan Document, and
all proceeds of any of the foregoing.
"PLEDGED SHARE ISSUER" means each Person identified in ITEM B of
ATTACHMENT 1 hereto as the issuer of the Pledged Shares identified opposite the
name of such Person.
"PLEDGED SHARES" means all shares of capital stock of any Pledged Share
Issuer which are delivered by any Pledgor to the Facility Agent as Pledged
Property hereunder.
"PLEDGOR" and "PLEDGORS" are defined in the PREAMBLE.
"SECURED PARTY" means, as the context may require, any Lender, the
Issuer and each Agent and each of their respective successors, transferred and
assigns.
"SECURED OBLIGATIONS" is defined in SECTION 2.2.
"SECURITIES ACT" is defined in SECTION 6.2.
"U.C.C." means the Uniform Commercial Code, as in effect from time to
time in the State of New York.
SECTION _ CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined herein
or the context otherwise requires, terms used in this Pledge Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION _ U.C.C. DEFINITIONS. Unless otherwise defined herein or in the
Credit Agreement or the context otherwise requires, terms for which meanings are
provided in the U.C.C. are used in this Pledge Agreement, including its preamble
and recitals, with such meanings.
ARTICLE _______________
-7-
▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇ _ GRANT OF SECURITY INTEREST. Each Pledgor hereby pledges,
hypothecates, assigns, charges, mortgages, delivers, and transfers to the
Facility Agent, for its benefit and the ratable benefit of each of the Secured
Parties, and hereby grants to the Facility Agent, for its benefit and the
ratable benefit of the Secured Parties, a continuing security interest in, all
of the following property of such Pledgor (the "COLLATERAL"):
___ all promissory notes of each Pledged Note Issuer
identified in ITEM A of ATTACHMENT 1 hereto;
___ all other Pledged Notes issued from time to time;
___ all issued and outstanding shares of capital
stock of each Pledged Share Issuer identified in ITEM B of
ATTACHMENT 1 hereto;
___ all other Pledged Shares issued from time to
time;
___ all other Pledged Property, whether now or
hereafter delivered to the Facility Agent in connection with
this Pledge Agreement;
___ all Dividends, Distributions, interest, and other
payments and rights with respect to any Pledged Property; and
___ all proceeds of any of the foregoing.
SECTION _ SECURITY FOR OBLIGATIONS. This Pledge Agreement secures the
payment in full in cash of all Obligations of the Borrower now or hereafter
existing under the Credit Agreement, the Notes and each other Loan Document to
which the Borrower is or may become a party, whether for principal, interest,
costs, fees, expenses, or otherwise, and all obligations of each Pledgor and
each other Obligor whether now or hereafter existing under this Pledge Agreement
and each other Loan Document to which such Pledgor or such other Obligor is or
may become a party (all such obligations of the Borrower, such Pledgor and such
other Obligor being the "SECURED OBLIGATIONS").
SECTION _ DELIVERY OF PLEDGED PROPERTY. All certificates or instruments
representing or evidencing any Collateral, including all Pledged Shares and all
Pledged Notes, shall be delivered to and held by or on behalf of (and, in the
case of the Pledged Notes, endorsed to the order of) the Facility Agent pursuant
hereto, shall be in suitable form for transfer by
186
delivery, and shall be accompanied by all necessary instruments of transfer or
assignment, duly executed in blank.
SECTION _ DIVIDENDS ON PLEDGED SHARES AND PAYMENTS ON PLEDGED NOTES. In
the event that any Dividend is to be paid on any Pledged Share or any payment of
principal or interest is to be made on any Pledged Note at a time when no
Default of the nature referred to in Section 8.1.9 of the Credit Agreement or
Event of Default has occurred and is continuing or would result therefrom, such
Dividend or payment may be paid directly to the applicable Pledgor. If any such
Default or Event of Default has occurred and is continuing, then any such
Dividend or payment shall be paid directly to the Facility Agent.
SECTION _ CONTINUING SECURITY INTEREST; TRANSFER OF NOTE. This Pledge
Agreement shall create a continuing security interest in the Collateral and
shall
___ remain in full force and effect until payment in full in
cash of all Secured Obligations, the termination or expiration of all
Letters of Credit and the termination of all Commitments,
___ be binding upon each Pledgor and its successors,
transferees and assigns, and
___ inure, together with the rights and remedies of the
Facility Agent hereunder, to the benefit of the Facility Agent and each
other Secured Party.
Without limiting the foregoing CLAUSE (C), any Lender may assign or otherwise
transfer (in whole or in part) any Note or Loan held by it to any other Person
or entity, and such other Person or entity shall thereupon become vested with
all the rights and benefits in respect thereof granted to such Lender under any
Loan Document (including this Pledge Agreement) or otherwise, subject, however,
to any contrary provisions in such assignment or transfer, and to the provisions
of Section 10.11 and Article IX of the Credit Agreement. Upon (i) the sale,
transfer or other disposition of Collateral in accordance with the Credit
Agreement or (ii) the payment in full in cash of all Secured Obligations, the
termination or expiration of all Letters of Credit and the termination of all
Commitments, the security interests granted herein shall automatically terminate
with respect to (x) such Collateral (in the case of clause (i)) or (y) all
Collateral (in the case of CLAUSE (II)). Upon any such sale, transfer,
disposition or termination, the Facility Agent will, at such Pledgor's sole
expense, deliver to such Pledgor, without any representations, warranties or
recourse of any kind whatsoever, all certificates and instruments representing
or evidencing all
-9-
187
Pledged Shares and all Pledged Notes, together with all other
Collateral held by the Facility Agent hereunder, and execute and deliver to such
Pledgor such documents as such Pledgor shall reasonably request to evidence such
termination.
SECTION _ SECURITY INTEREST ABSOLUTE. All rights of the Facility Agent
and the security interests granted to the Facility Agent hereunder, and all
obligations of each Pledgor hereunder, shall be absolute and unconditional,
irrespective of
___ any lack of validity or enforceability of the Credit
Agreement, any Note or any other Loan Document,
___ the failure of any Secured Party or any holder of any Note
__ to assert any claim or demand or to enforce any
right or remedy against the Borrower, any other Obligor or any
other Person under the provisions of the Credit Agreement, any
Note, any other Loan Document or otherwise, or
__ to exercise any right or remedy against any other
guarantor of, or collateral securing, any Secured Obligations,
___ any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any
other extension, compromise or renewal of any Secured Obligation,
___ any reduction, limitation, impairment or termination of
any Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and such Pledgor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations or otherwise,
___ any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the terms of
the Credit Agreement, any Note or any other Loan Document,
___ any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or
-10-
188
consent to departure from any guaranty, for any of the Secured
Obligations, or
___ any other circumstances which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the
Borrower, any other Obligor, any surety or any guarantor.
SECTION _ POSTPONEMENT OF SUBROGATION, ETC. Each Pledgor will not
exercise any rights which it may acquire by reason of any payment made
hereunder, whether by way of subrogation, reimbursement or otherwise, until the
prior payment, in full and in cash, of all Secured Obligations, the termination
or expiration of all Letters of Credit and the termination of all Commitments.
Any amount paid to any Pledgor on account of any payment made hereunder prior to
the payment in full in cash of all Secured Obligations shall be held in trust
for the benefit of the Secured Parties and each holder of a Note and shall
immediately be paid to the Secured Parties and each holder of a Note and
credited and applied against the Secured Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement; PROVIDED,
HOWEVER, that if
(a) such Pledgor has made payment to the Secured Parties and
each holder of a Note of all or any part of the Secured Obligations,
and
(b) all Secured Obligations have been paid in full in cash,
all Letters of Credit have been terminated or expired and all
Commitments have been permanently terminated,
each Secured Party and each holder of a Note agrees that, at such Pledgor's
request, the Secured Parties and the holders of the Notes will execute and
deliver to such Pledgor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
such Pledgor of an interest in the Secured Obligations resulting from such
payment by such Pledgor. In furtherance of the foregoing, for so long as any
Secured Obligations, Letters of Credit or Commitments remain outstanding, such
Pledgor shall refrain from taking any action or commencing any proceeding
against the Borrower or any other Obligor (or its successors or assigns, whether
in connection with a bankruptcy proceeding or otherwise) to recover any amounts
in respect of payments made under this Pledge Agreement to any Secured Party or
any holder of a Note.
ARTICLE _______________
-11-
189
REPRESENTATIONS AND WARRANTIES
SECTION _ REPRESENTATIONS AND WARRANTIES, ETC. Each Pledgor represents
and warrants to each Secured Party, as at the date of each pledge and delivery
hereunder (including each pledge and delivery of Pledged Shares and each pledge
and delivery of a Pledged Note) by such Pledgor to the Facility Agent of any
Collateral, that the representations and warranties contained in Article VI of
the Credit Agreement, insofar as the representations and warranties contained
therein are applicable to such Pledgor and its properties, each such
representation and warranty set forth in such Article (insofar as applicable as
aforesaid) and all other terms of the Credit Agreement to which reference is
made therein, together with all related definitions and ancillary provisions,
being hereby incorporated into this Pledge Agreement by reference as though
specifically set forth in this ARTICLE III.
SECTION 3.1.1. OWNERSHIP, NO LIENS, ETC. Such Pledgor is the legal and
beneficial owner of, and has good and marketable title to (and has full right
and authority to pledge and assign) such Collateral, free and clear of all
liens, security interests, options, or other charges or encumbrances, except any
lien or security interest granted pursuant hereto in favor of the Facility Agent
or otherwise permitted under the Credit Agreement.
SECTION 3.1.2. VALID SECURITY INTEREST. The execution, and delivery of
this Agreement, together with the delivery of such Collateral to the Facility
Agent is effective to create a valid, perfected, first priority security
interest in such Collateral and all proceeds thereof, securing the Secured
Obligations. Possession by the Facility Agent of the Collateral is the only
action necessary to perfect or protect such security interest for the
Collateral, subject to Section 9-30G of the U.C.C.
SECTION 3.1.3. AS TO PLEDGED SHARES. In the case of any Pledged Shares
constituting such Collateral, all of such Pledged Shares are duly authorized and
validly issued, fully paid, and non-assessable, and constitute all of the issued
and outstanding shares of capital stock of each Pledged Share Issuer. Such
Pledgor has no Subsidiaries other than the Pledged Share Issuers, except as set
forth in ITEM C of ATTACHMENT 1.
SECTION 3.1.4. AS TO PLEDGED NOTES. In the case of any Pledged Note
constituting such Collateral, all of such Pledged Notes have been duly
authorized, executed, endorsed, issued and delivered, and are the legal, valid
and binding obligation of the issuers thereof, and are not in default.
-12-
190
SECTION 3.1.5. AUTHORIZATION, APPROVAL, ETC. No authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority, regulatory body or any other Person is required either
___ for the pledge by such Pledgor of any Collateral pursuant
to this Pledge Agreement or for the execution, delivery, and
performance of this Pledge Agreement by such Pledgor, or
___ for the exercise by the Facility Agent of the voting or
other rights provided for in this Pledge Agreement, or, except with
respect to any Pledged Shares, as may be required in connection with a
disposition of such Pledged Shares by laws affecting the offering and
sale of securities generally, the remedies in respect of the Collateral
pursuant to this Pledge Agreement.
SECTION 3.1.6. COMPLIANCE WITH LAWS. Such Pledgor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to materially and
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.
ARTICLE _______________
COVENANTS
SECTION _ CERTAIN COVENANTS. Each Pledgor covenants and agrees that, so
long as any portion of the Secured Obligations shall remain unpaid, any Letters
of Credit shall be outstanding or any Secured Party shall have any outstanding
Commitment, such Pledgor will, unless the Required Lenders shall otherwise
consent in writing, perform, comply with and be bound by (a) all of the
agreements, covenants and obligations contained in Article VII of the Credit
Agreement which are applicable to such Pledgor or its properties, each such
agreement, covenant and obligation contained in such Article and all other terms
of the Credit Agreement to which reference is made herein, together with all
related definitions and ancillary provisions, being hereby incorporated into
this Pledge Agreement by reference as though specifically set forth in this
Section and (b) the obligations set forth in this Section.
SECTION _ PROTECT COLLATERAL; FURTHER ASSURANCES, ETC. Such Pledgor
agrees and covenants that it will not sell, assign,
-13-
191
transfer, pledge, or encumber in any other manner the Collateral (except in
favor of the Facility Agent hereunder). Such Pledgor will warrant and defend the
right and title herein granted unto the Facility Agent in and to the Collateral
(and all right, title, and interest represented by the Collateral) against the
claims and demands of all Persons whomsoever. Such Pledgor agrees that at any
time, and from time to time, at the expense of such Pledgor, such Pledgor will
promptly execute and deliver all further instruments, and take all further
action, that may be necessary or desirable, or that the Facility Agent may
reasonably request, in order to perfect and protect any security interest
granted or purported to be granted hereby or to enable the Facility Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral.
SECTION _ STOCK POWERS, ETC. Such Pledgor agrees that all Pledged
Shares (and all other shares of capital stock constituting Collateral) delivered
by such Pledgor pursuant to this Pledge Agreement will be accompanied by duly
executed undated blank stock powers, or other equivalent instruments of transfer
acceptable to the Facility Agent. Such Pledgor will, from time to time upon the
request of the Facility Agent, promptly deliver to the Facility Agent such stock
powers, instruments, and similar documents, satisfactory in form and substance
to the Facility Agent, with respect to the Collateral as the Facility Agent may
reasonably request and will, from time to time upon the request of the Facility
Agent after the occurrence of any Event of Default, promptly transfer any
Pledged Shares or other shares of common stock constituting Collateral into the
name of any nominee designated by the Facility Agent.
SECTION _ CONTINUOUS PLEDGE. Such Pledgor will, at all times, keep
pledged to the Facility Agent pursuant hereto all Pledged Shares and all other
shares of capital stock constituting Collateral, all Dividends and Distributions
with respect thereto, all Pledged Notes, all interest, principal and other
proceeds received by the Facility Agent with respect to the Pledged Notes, and
all other Collateral and other securities, instruments, proceeds, and rights
from time to time received by or distributable to such Pledgor in respect of any
Collateral and will not permit any Pledged Share Issuer to issue any capital
stock which shall not have been promptly duly pledged hereunder on a first
priority perfected basis.
SECTION _ VOTING RIGHTS; DIVIDENDS, ETC. Such Pledgor agrees:
___ after any Default of the nature referred to in Section
8.1.9 of the Credit Agreement or any Event of Default shall have
occurred and be continuing, promptly upon
-14-
192
receipt of notice thereof by such Pledgor and without any request
therefor by the Facility Agent, to deliver (properly endorsed where
required hereby or requested by the Facility Agent) to the Facility
Agent all Dividends, Distributions, all interest, all principal, all
other cash payments, and all proceeds of the Collateral, all of which
shall be held by the Facility Agent as additional Collateral for use in
accordance with SECTION 6.4; and
___ after any Event of Default shall have occurred and be
continuing and the Facility Agent has notified such Pledgor of the
Facility Agent's intention to exercise its voting power under this
SECTION 4.1.4(B)
__ the Facility Agent may exercise (to the exclusion
of such Pledgor) the voting power and all other incidental
rights of ownership with respect to any Pledged Shares or
other shares of capital stock constituting Collateral and such
Pledgor hereby grants the Facility Agent an irrevocable proxy,
exercisable under such circumstances, to vote the Pledged
Shares and such other Collateral; and
__ promptly to deliver to the Facility Agent such
additional proxies and other documents as may be necessary to
allow the Facility Agent to exercise such voting power.
All Dividends, Distributions, interest, principal, cash payments, and proceeds
which may at any time and from time to time be held by such Pledgor but which
such Pledgor is then obligated to deliver to the Facility Agent, shall, until
delivery to the Facility Agent, be held by such Pledgor separate and apart from
its other property in trust for the Facility Agent. The Facility Agent agrees
that unless an Event of Default shall have occurred and be continuing and the
Facility Agent shall have given the notice referred to in SECTION 4.1.4(B), such
Pledgor shall have the exclusive voting power with respect to any shares of
capital stock (including any of the Pledged Shares) constituting Collateral and
the Facility Agent shall, upon the written request of such Pledgor, promptly
deliver such proxies and other documents, if any, as shall be reasonably
requested by such Pledgor which are necessary to allow such Pledgor to exercise
voting power with respect to any such share of capital stock (including any of
the Pledged Shares) constituting Collateral; PROVIDED, HOWEVER, that no vote
shall be cast, or consent, waiver, or ratification given, or action taken by
such Pledgor that would impair any Collateral or be inconsistent with or violate
any provision of the Credit Agreement or any other Loan Document (including this
Pledge Agreement).
-15-
193
SECTION _ ADDITIONAL UNDERTAKINGS. Such Pledgor will not, without the
prior written consent of the Facility Agent:
___ enter into any agreement amending, supplementing, or
waiving any provision of any Pledged Note (including any underlying
instrument pursuant to which such Pledged Note is issued) or
compromising or releasing or extending the time for payment of any
obligation of the maker thereof; or
___ take or omit to take any action the taking or the omission
of which would result in any impairment or alteration of any obligation
of the maker of any Pledged Note or other instrument constituting
Collateral.
ARTICLE _______________
THE ADMINISTRATIVE AGENT
SECTION _ FACILITY AGENT APPOINTED ATTORNEY-IN-FACT. Each Pledgor
hereby irrevocably appoints the Facility Agent such Pledgor's attorney-in-fact,
with full authority in the place and stead of such Pledgor and in the name of
such Pledgor or otherwise, from time to time in the Facility Agent's discretion,
to take any action and to execute any instrument which the Facility Agent may
reasonably deem necessary or advisable to accomplish the purposes of this Pledge
Agreement, including after the occurrence and during the continuance of a
Default of the nature referred to in Section 8.1.9 of the Credit Agreement or an
Event of Default:
___ to ask, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
___ to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with CLAUSE (A)
above; and
___ to file any claims or take any action or institute any
proceedings which the Facility Agent may reasonably deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Facility Agent with respect to any of the
Collateral.
Such Pledgor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
-16-
194
SECTION _ FACILITY AGENT MAY PERFORM. If any Pledgor fails to perform
any agreement contained herein, the Facility Agent may itself perform, or cause
performance of, such agreement, and the expenses of the Facility Agent incurred
in connection therewith shall be payable by such Pledgor pursuant to SECTION
6.4.
SECTION _ FACILITY AGENT HAS NO DUTY. The powers conferred on the
Facility Agent hereunder are solely to protect its interest (on behalf of the
Secured Parties) in the Collateral and shall not impose any duty on it to
exercise any such powers. Except for reasonable care of any Collateral in its
possession and the accounting for moneys actually received by it hereunder, the
Facility Agent shall have no duty as to any Collateral or responsibility for
___ ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative
to any Pledged Property, whether or not the Facility Agent has or is
deemed to have knowledge of such matters, or
___ taking any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral.
SECTION _ REASONABLE CARE. The Facility Agent is required to exercise
reasonable care in the custody and preservation of any of the Collateral in its
possession; PROVIDED, HOWEVER, the Facility Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any of the
Collateral, if it takes such action for that purpose as any Pledgor reasonably
requests in writing at times other than upon the occurrence and during the
continuance of any Event of Default, but failure of the Facility Agent to comply
with any such request at any time shall not in itself be deemed a failure to
exercise reasonable care.
ARTICLE _______________
REMEDIES
SECTION _ CERTAIN REMEDIES. If any Event of Default shall have occurred
and be continuing:
___ The Facility Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under
-17-
195
the U.C.C. (whether or not the U.C.C. applies to the affected
Collateral) and also may, without notice except as specified below,
sell the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Facility Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such
other terms as the Facility Agent may deem commercially reasonable.
Each Pledgor agrees that, to the extent notice of sale shall be
required by law, at least ten days' prior notice to such Pledgor of the
time and place of any public sale or the time after which any private
sale is to be made shall constitute reasonable notification. The
Facility Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Facility Agent may
adjourn any public or private sale from time to time by announcement at
the time and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so adjourned.
___ The Facility Agent may
__ transfer all or any part of the Collateral into the name of
the Facility Agent or its nominee, with or without disclosing that such
Collateral is subject to the lien and security interest hereunder,
__ notify the parties obligated on any of the Collateral to
make payment to the Facility Agent of any amount due or to become due
thereunder,
__ enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof,
or compromise or extend or renew for any period (whether or not longer
than the original period) any obligations of any nature of any party
with respect thereto,
__ endorse any checks, drafts, or other writings in such
Pledgor's name to allow collection of the Collateral,
__ take control of any proceeds of the Collateral, and
__ execute (in the name, place and stead of such Pledgor)
endorsements, assignments, stock powers and other instruments of
conveyance or transfer with respect to all or any of the Collateral.
-18-
196
SECTION _ SECURITIES LAWS. If the Facility Agent shall determine to
exercise its right to sell all or any of the Collateral pursuant to SECTION 6.1,
each Pledgor agrees that, upon request of the Facility Agent, such Pledgor will,
at its own expense:
___ execute and deliver, and cause each issuer of the
Collateral contemplated to be sold and the directors and officers
thereof to execute and deliver, all such instruments and documents, and
do or cause to be done all such other acts and things, as may be
necessary or, in the opinion of the Facility Agent, advisable to
register such Collateral under the provisions of the Securities Act of
1933, as from time to time amended (the "SECURITIES ACT"), and to cause
the registration statement relating thereto to become effective and to
remain effective for such period as prospectuses are required by law to
be furnished, and to make all amendments and supplements thereto and to
the related prospectus which, in the opinion of the Facility Agent, are
necessary or advisable, all in conformity with the requirements of the
Securities Act and the rules and regulations of the Securities and
Exchange Commission applicable thereto;
___ use its best efforts to qualify the Collateral under the
state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Collateral, as requested by
the Facility Agent;
___ cause each such issuer to make available to its security
holders, as soon as practicable, an earnings statement that will
satisfy the provisions of Section 11(a) of the Securities Act; and
___ do or cause to be done all such other acts and things as
may be necessary to make such sale of the Collateral or any part
thereof valid and binding and in compliance with applicable law.
Each Pledgor further acknowledges the impossibility of ascertaining the amount
of damages that would be suffered by the Facility Agent or the Secured Parties
by reason of the failure by any Pledgor to perform any of the covenants
contained in this Section and, consequently, agrees that, if such Pledgor shall
fail to perform any of such covenants, it shall pay, as liquidated damages and
not as a penalty, an amount equal to the value (as determined by the Facility
Agent) of the Collateral on the date the Facility Agent shall demand compliance
with this Section.
-19-
197
SECTION _ COMPLIANCE WITH RESTRICTIONS. Each Pledgor agrees that in any
sale of any of the Collateral whenever an Event of Default shall have occurred
and be continuing, the Facility Agent is hereby authorized to comply with any
limitation or restriction in connection with such sale as it may be advised by
counsel is necessary in order to avoid any violation of applicable law
(including compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and such Pledgor further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall the Facility Agent be liable nor accountable to
such Pledgor for any discount allowed by the reason of the fact that such
Collateral is sold in compliance with any such limitation or restriction.
SECTION _ APPLICATION OF PROCEEDS. All cash proceeds received by the
Facility Agent in respect of any sale of, collection from, or other realization
upon, all or any part of the Collateral may, in the discretion of the Facility
Agent, be held by the Facility Agent as additional collateral security for, or
then or at any time thereafter be applied (after payment of any amounts payable
to the Facility Agent pursuant to Section 10.3 of the Credit Agreement and
SECTION 6.5) in whole or in part by the Facility Agent against, all or any part
of the Secured Obligations in such order as the Facility Agent shall elect.
Any surplus of such cash or cash proceeds held by the Facility Agent
and remaining after payment in full in cash of all the Secured Obligations, the
termination or expiration of all Letters of Credit and the termination of all
Commitments, shall be paid over to the applicable Pledgor or to whomsoever may
be lawfully entitled to receive such surplus.
SECTION _ INDEMNITY AND EXPENSES. Each Pledgor hereby agrees to jointly
and severally indemnify and hold harmless the Facility Agent from and against
any and all claims, losses, and liabilities arising out of or resulting from
this Pledge Agreement (including enforcement of this Pledge Agreement), except
claims, losses, or liabilities resulting from the Facility Agent's gross
negligence or wilful misconduct. Upon demand, such Pledgor will pay to the
Facility Agent the amount of any and all reasonable expenses, including the
reasonable fees and
-20-
198
disbursements of its counsel and of any experts and agents, which the
Facility Agent may incur in connection with:
___ the administration of this Pledge Agreement, the Credit
Agreement and each other Loan Document;
___ the custody, preservation, use, or operation of, or the
sale of, collection from, or other realization upon, any of the
Collateral;
___ the exercise or enforcement of any of the rights of the
Facility Agent hereunder; or
___ the failure by such Pledgor to perform or observe any of
the provisions hereof.
ARTICLE _______________
MISCELLANEOUS PROVISIONS
SECTION _ LOAN DOCUMENT. This Pledge Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions thereof.
SECTION _ AMENDMENTS, ETC. No amendment to or waiver of any provision
of this Pledge Agreement nor consent to any departure by any Pledgor herefrom
shall in any event be effective unless the same shall be in writing and signed
by the Facility Agent (on behalf of the Lenders or the Required Lenders, as the
case may be), and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it is given.
SECTION _ PROTECTION OF COLLATERAL. The Facility Agent may from time to
time, at its option, perform any act which each Pledgor agrees hereunder to
perform and which such Pledgor shall fail to perform after being requested in
writing so to perform (it being understood that no such request need be given
after the occurrence and during the continuance of an Event of Default) and the
Facility Agent may from time to time take any other action which the Facility
Agent reasonably deems necessary for the maintenance, preservation or protection
of any of the Collateral or of its security interest therein.
SECTION _ ADDRESSES FOR NOTICES. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and, if to any Pledgor, mailed or telecopied or delivered to it, addressed to it
in care
-21-
199
of the Borrower at the address of the Borrower specified in the Credit
Agreement, if to the Facility Agent, mailed or telecopied or delivered to it,
addressed to it at the address of the Facility Agent specified in the Credit
Agreement. All such notices and other communications, when mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any such notice or
communication, if transmitted by telecopier, shall be deemed given when
transmitted and electronically confirmed.
SECTION _ SECTION CAPTIONS. Section captions used in this Pledge
Agreement are for convenience of reference only, and shall not affect the
construction of this Pledge Agreement.
SECTION _ SEVERABILITY. Wherever possible each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Pledge Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Pledge Agreement.
SECTION _ COUNTERPARTS. This Pledge Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
SECTION _ GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS PLEDGE AGREEMENT
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF
THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), EXCEPT TO THE EXTENT THAT
THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS PLEDGE AGREEMENT AND THE
OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE UNDERSTANDING AMONG THE PARTIES
HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF AND SUPERSEDE ANY PRIOR
AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT THERETO.
-22-
200
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
OMNI INVESTORS, INC.
By
------------------------------
Name:
Title:
DUR-O-WAL, INC.
By
------------------------------
Name:
Title:
BANK ONE, N.A., as Facility Agent
By
------------------------------
Name:
Title:
-23-
201
EXHIBIT A
to Subsidiary
Pledge Agreement
PROMISSORY NOTE
$ _____________, 19__
FOR VALUE RECEIVED, the undersigned, ______________, a _______________
corporation (the "MAKER"), promises to pay to the order of DAYTON SUPERIOR
CORPORATION, an Ohio corporation (the "PAYEE"), in equal ________ installments,
commencing _________, 19__ to and including , 19 , the principal sum of
________________________DOLLARS ($____________), representing the aggregate
principal amount of an intercompany loan made by the Payee to the Maker.
The unpaid principal amount of this promissory note (this "NOTE") from
time to time outstanding shall bear interest at a rate of interest equal to
____________, which the Maker represents to be a lawful and commercially
reasonable rate, payable __________, and all payments of principal of and
interest on this Note shall be payable in lawful currency of the United States
of America. All such payments shall be made by the Maker to an account
established by the Payee at _______________ and shall be recorded on the grid
attached hereto by the holder hereof (including the Facility Agent as pledgee).
Upon notice from the Facility Agent (hereinafter defined) that a Default (as
defined in the Credit Agreement, hereinafter defined) of the nature referred to
in Section 8.1.9 of the Credit Agreement or an Event of Default (as defined in
the Credit Agreement) has occurred and is continuing under the Credit Agreement,
the Maker shall make such payments, in same day funds, to such other account as
the Facility Agent shall direct in such notice.
This Note is one of the Pledged Notes referred to in, and evidences
Indebtedness incurred pursuant to Section 7.2.2 of the Credit Agreement, dated
as of September 29, 1997 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among Dayton
Superior Corporation, an Ohio corporation (the "BORROWER"), the various
financial institutions as are, or may from time to time become, parties thereto
(each, individually, a "LENDER", and collectively, the "LENDERS"), DLJ Capital
Funding, Inc., as the Syndication Agent for the Lenders, Bank of America
National Trust and Savings Association, as the Documentation Agent for the
Lenders Bankers Trust Company, as Administrative Agent for the Lenders and Bank
One, N.A., as the Facility Agent. Upon the
202
occurrence and continuance of an Event of Default under the Credit Agreement,
and notice thereof by the Facility Agent to the Maker, the Facility Agent shall
have all rights of the Payee to collect and accelerate, and enforce all rights
with respect to, the Indebtedness evidenced by this Note. Unless otherwise
defined herein or the context otherwise requires, terms used herein have the
meanings provided in the Credit Agreement.
Reference is made to the Credit Agreement for a description of the
Pledge Agreement pursuant to which this Note has been pledged to the Facility
Agent as security for the Secured Obligations outstanding from time to time
under the Credit Agreement and each other Loan Document.
In addition to, but not in limitation of, the foregoing, the Maker
further agrees to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder (including the Facility Agent as pledgee)
of this Note endeavoring to collect any amounts payable hereunder which are not
paid when due, whether by acceleration or otherwise.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
THE MAKER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON THIS
NOTE. THE MAKER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
CONSIDERATION FOR THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PAYEE TO ACCEPT THIS NOTE.
[NAME OF MAKER]
By
---------------------------------
Name:
Title:
Pay to the order of BANK ONE, N.A.,
as Facility Agent
[NAME OF PAYEE]
By
---------------------------------
Name:
Title:
-2-
203
GRID
Intercompany Loans made by [Name of Payee] to [Name of Maker] and
payments of principal of such Loans.
====================================================================================================================
Amount of Amount of Outstanding
Intercompany Principal Principal Notation
Date Loan Payment Balance Made By
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
--------------------- ------------------------- ------------------------- ----------------------- ------------------
====================================================================================================================
204
ATTACHMENT 1
to Subsidiary
Pledge Agreement
[NAME OF PLEDGOR]
Item A. Pledged Notes
-------------
Pledged Note Issuer Description
------------------- -----------
Item B. Pledged Shares
--------------
COMMON STOCK
----------------------------------------
Authorized Outstanding % of Shares
Pledged Share Issuer Shares Shares Pledged
-------------------- ------ ------ -------
Item C. Additional Subsidiaries
-----------------------
205
EXHIBIT K-1
BORROWER SECURITY AGREEMENT
This BORROWER SECURITY AGREEMENT (as amended, supplemented, amended and
restated or otherwise modified from time to time, this "SECURITY AGREEMENT"),
dated as of September 29, 1997, is made by DAYTON SUPERIOR CORPORATION, an Ohio
corporation (the "GRANTOR"), in favor of BANK ONE, N.A., as facility agent
(together with its successor(s) thereto, in such capacity the "FACILITY AGENT")
for each of the Secured Parties.
W I T N E S S E T H:
WHEREAS, pursuant to a Credit Agreement, dated as of September 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among the Grantor, the various financial
institutions as are, or may from time to time become, parties thereto (each
individually a "LENDER" and collectively the "LENDERS"), DLJ Capital Funding,
Inc., as the Syndication Agent for the Lenders, Bank of America National Trust
and Savings Association, as the Documentation Agent for the Lenders, Bankers
Trust Company, as the Administrative Agent for the Lenders and the Facility
Agent, the Lenders have extended Commitments to make Credit Extensions to the
Grantor;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Security Agreement; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Security Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to make Credit Extensions (including the initial Credit Extension) to the
Grantor pursuant to the Credit Agreement, the Grantor agrees, for the benefit of
each Secured Party, as follows:
ARTICLE XXV
DEFINITIONS
206
SECTION XXV.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"COLLATERAL" is defined in SECTION 2.1.
"COLLATERAL ACCOUNT" is defined in SECTION 4.1.2(B).
"COMPUTER HARDWARE AND SOFTWARE COLLATERAL" means:
(a) all computer and other electronic data processing
hardware, integrated computer systems, central processing units, memory
units, display terminals, printers, features, computer elements, card
readers, tape drives, hard and soft disk drives, cables, electrical
supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware;
(b) all software programs (including both source
code, object code and all related applications and data files), whether
now owned, licensed or leased or hereafter acquired by the Grantor,
designed for use on the computers and electronic data processing
hardware described in CLAUSE (A) above;
(c) all firmware associated therewith;
(d) all documentation (including flow charts, logic
diagrams, manuals, guides and specifications) with respect to such
hardware, software and firmware described in the preceding CLAUSES (A)
through (C); and
(e) all rights with respect to all of the foregoing,
including any and all copyrights, licenses, options, warranties,
service contracts, program services, test rights, maintenance rights,
support rights, improvement rights, renewal rights and indemnifications
and any substitutions, replacements, additions or model conversions of
any of the foregoing.
"COPYRIGHT COLLATERAL" means all copyrights (including all copyrights
for semi-conductor chip product mask works) of the Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout the
world including all of the Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in ITEM A of SCHEDULE IV
attached hereto, and all applications
-7-
207
for registration thereof, whether pending or in preparation, all copyright
licenses, including each copyright license referred to in ITEM B of SCHEDULE IV
attached hereto, the right to ▇▇▇ for past, present and future infringements of
any thereof, all rights corresponding thereto throughout the world, all
extensions and renewals of any thereof and all proceeds of the foregoing,
including licenses, royalties, income, payments, claims, damages and proceeds of
suit.
"CREDIT AGREEMENT" is defined in the FIRST RECITAL.
"EQUIPMENT" is defined in CLAUSE (A) of SECTION 2.1.
"FACILITY AGENT" is defined in the PREAMBLE.
"GRANTOR" is defined in the PREAMBLE.
"INTELLECTUAL PROPERTY COLLATERAL" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"INVENTORY" is defined in CLAUSE (B) of SECTION 2.1
"LENDER" and "LENDERS" are defined in the FIRST RECITAL.
"PATENT COLLATERAL" means:
(a) all letters patent and applications for letters
patent throughout the world, including all patent applications in
preparation for filing anywhere in the world and including each patent
and patent application referred to in ITEM A of SCHEDULE II attached
hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in CLAUSE (A);
(c) all patent licenses, including each patent
license referred to in ITEM B of SCHEDULE II attached hereto;
and
(d) all proceeds of, and rights associated with, the
foregoing (including license royalties and proceeds of infringement
suits), the right to ▇▇▇ third parties for past, present or future
infringements of any patent or patent application, including any patent
or patent application referred to in ITEM A of SCHEDULE II attached
hereto, and for breach or enforcement of any patent license, including
any patent license referred to in
-8-
208
ITEM B of SCHEDULE II attached hereto, and all rights corresponding
thereto throughout the world.
"RECEIVABLES" is defined in CLAUSE (C) of SECTION 2.1.
"RELATED CONTRACTS" is defined in CLAUSE (C) of SECTION 2.1.
"RENTAL EQUIPMENT" means, as of any date of determination, any
equipment which (i) is purchased and owned by the Grantor or any of its
wholly-owned U.S. Subsidiaries and (ii) is leased by the Grantor or such
Subsidiary to any Person (other than an Affiliate) pursuant to the terms of
which the Grantor or such Subsidiary is then charging for the rental of such
equipment.
"SECURED PARTIES" means, collectively, the Lenders, the Agents and all
Affiliates of the Lenders which may be party to any Loan Document (including
without limitation any Rate Protection Agreement).
"SECURITY AGREEMENT" is defined in the PREAMBLE.
"TRADEMARK COLLATERAL" means:
(a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, certification marks, collective marks, logos, other
source of business identifiers, prints and labels on which any of the
foregoing have appeared or appear, designs and general intangibles of a
like nature (all of the foregoing items in this CLAUSE (A) being
collectively called a "TRADEMARK"), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent
and Trademark Office or in any office or agency of the United States of
America or any State thereof or any foreign country, including those
referred to in ITEM A of SCHEDULE III attached hereto;
(b) all Trademark licenses, including each Trademark
license referred to in ITEM B of SCHEDULE III attached hereto;
(c) all reissues, extensions or renewals of any of
the items described in CLAUSES (A) and (B);
(d) all of the goodwill of the business connected
with the use of, and symbolized by the items described in, CLAUSES (A)
and (B); and
-9-
209
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by the Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in ITEM A and
ITEM B of SCHEDULE III attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach or
enforcement of any Trademark license.
"TRADE SECRETS COLLATERAL" means all common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of the Grantor (all of the foregoing being collectively called a "TRADE
SECRET"), whether or not such Trade Secret has been reduced to a writing or
other tangible form, including all documents and things embodying, incorporating
or referring in any way to such Trade Secret, all Trade Secret licenses,
including each Trade Secret license referred to in SCHEDULE V attached hereto,
and including the right to ▇▇▇ for and to enjoin and to collect damages for the
actual or threatened misappropriation of any Trade Secret and for the breach or
enforcement of any such Trade Secret license.
"U.C.C." means the Uniform Commercial Code, as in effect from time to
time in the State of New York.
SECTION XXV.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION XXV.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or
in the Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the U.C.C. are used in this Security Agreement,
including its preamble and recitals, with such meanings.
ARTICLE XXVI
SECURITY INTEREST
SECTION XXVI.1. GRANT OF SECURITY. The Grantor hereby assigns and
pledges to the Facility Agent for its benefit and the ratable benefit of each of
the Secured Parties, and hereby grants to the Facility Agent for its benefit and
the ratable benefit of each of the Secured Parties, a
-10-
210
security interest in all of the following, whether now or hereafter existing or
acquired by the Grantor (the "COLLATERAL"):
(a) all equipment in all of its forms of the Grantor,
wherever located, including all parts thereof and all accessions,
additions, attachments, improvements, substitutions and replacements
thereto and therefor and all accessories related thereto (any and all
of the foregoing being the "EQUIPMENT");
(b) all inventory in all of its forms of the Grantor,
wherever located, including
(i) all raw materials and work in process
therefor, finished goods thereof, and materials used
or consumed in the manufacture or production thereof,
(ii) all goods in which the Grantor has an
interest in mass or a joint or other interest or
right of any kind (including goods in which the
Grantor has an interest or right as consignee), and
(iii) all goods which are returned to or
repossessed by the Grantor, and all accessions thereto, products
thereof and documents therefor (any and all such inventory, materials,
goods, accessions, products and documents being the "INVENTORY");
(c) all accounts, contracts, contract
rights, chattel paper, documents, instruments, and general intangibles
(including tax refunds) of the Grantor, whether or not arising out of
or in connection with the sale or lease of goods or the rendering of
services, and all rights of the Grantor now or hereafter existing in
and to all security agreements, guaranties, leases and other contracts
securing or otherwise relating to any such accounts, contracts,
contract rights, chattel paper, documents, instruments, and general
intangibles (any and all such accounts, contracts, contract rights,
chattel paper, documents, instruments, and general intangibles being
the "RECEIVABLES", and any and all such security agreements,
guaranties, leases and other contracts being the "RELATED CONTRACTS");
(d) all Intellectual Property Collateral of
the Grantor;
(e) all books, records, writings, data
bases, information and other property relating to, used or useful in
-11-
211
connection with, evidencing, embodying, incorporating or referring to,
any of the foregoing in this SECTION 2.1;
(f) all of the Grantor's other property and
rights of every kind and description and interests therein; and
(g) all products, rents, issues, profits,
returns, income and proceeds of and from any and all of the foregoing
Collateral (including proceeds which constitute property of the types
described in CLAUSES (A), (B), (C), (D), (E) and (F), proceeds
deposited from time to time in the Collateral Account and in any lock
boxes of the Grantor, and, to the extent not otherwise included, all
payments under insurance (whether or not the Facility Agent is the loss
payee thereof), or any indemnity, warranty or guaranty, payable by
reason of loss or damage to or otherwise with respect to any of the
foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents as to which the grant of a security interest would constitute
a violation of a valid and enforceable restriction in favor of a third party on
such grant, unless and until any required consents shall have been obtained. The
Grantor agrees to use all commercially reasonable efforts to obtain any such
required consent.
SECTION XXVI.2. SECURITY FOR OBLIGATIONS. This Security Agreement
secures the payment of all Obligations of the Grantor now or hereafter existing
under the Credit Agreement, the Notes and each other Loan Document to which the
Grantor is or may become a party, whether for principal, interest, costs, fees,
expenses or otherwise.
SECTION XXVI.3. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This
Security Agreement shall create a continuing security interest in the Collateral
and shall
(a) remain in full force and effect until
payment in full in cash of all Obligations, the termination or
expiration of all Letters of Credit and the termination of all
Commitments,
(b) be binding upon the Grantor, its
successors, transferees and assigns, and
(c) inure, together with the rights and
remedies of the Facility Agent hereunder, to the benefit of the
Facility Agent and each other Secured Party.
-12-
212
Without limiting the generality of the foregoing CLAUSE (C), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Loan held by it
to any other Person or entity, and such other Person or entity shall thereupon
become vested with all the rights and benefits in respect thereof granted to
such Lender under any Loan Document (including this Security Agreement) or
otherwise, subject, however, to any contrary provisions in such assignment or
transfer, and to the provisions of Section 10.11 and Article IX of the Credit
Agreement. Upon the payment in full in cash of all Obligations, the termination
or expiration of all Letters of Credit and the termination of all Commitments,
the security interest granted herein shall automatically terminate and all
rights to the Collateral shall revert to the Grantor. Upon any such termination,
the Facility Agent will, at the Grantor's sole expense, execute and deliver to
the Grantor such documents as the Grantor shall reasonably request to evidence
such termination. Upon any sale or other transfer of Collateral permitted by the
terms of Section 7.2.10 of the Credit Agreement, the security interest created
hereunder in such Collateral (but not in the proceeds thereof) shall be deemed
to be automatically released and the Facility Agent will, at the Grantor's sole
expense, execute and deliver to the Grantor such documents as the Grantor shall
reasonably request to evidence such release.
SECTION XXVI.4. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding
(a) the Grantor shall remain liable under
the contracts and agreements included in the Collateral to the extent
set forth therein, and shall perform all of its duties and obligations
under such contracts and agreements to the same extent as if this
Security Agreement had not been executed,
(b) the exercise by the Facility Agent of
any of its rights hereunder shall not release the Grantor from any of
its duties or obligations under any such contracts or agreements
included in the Collateral, and
(c) neither the Facility Agent nor any other
Secured Party shall have any obligation or liability under any such
contracts or agreements included in the Collateral by reason of this
Security Agreement, nor shall the Facility Agent or any other Secured
Party be obligated to perform any of the obligations or duties of the
Grantor thereunder or to take any action to collect or enforce any
claim for payment assigned hereunder.
ARTICLE XXVII
REPRESENTATIONS AND WARRANTIES
-13-
213
SECTION XXVII.1. REPRESENTATIONS AND WARRANTIES. The Grantor represents
and warrants to each Secured Party as set forth in this Section.
SECTION XXVII.1.1. LOCATION OF COLLATERAL, ETC. All of the Equipment
(other than Rental Equipment), Inventory and lock boxes of the Grantor are
located at the places specified in ITEM A, ITEM B and ITEM C, respectively, of
SCHEDULE I hereto. None of the Equipment and Inventory has, within the four
months preceding the date of this Security Agreement, been located at any place
other than the places specified in ITEM A and ITEM B, respectively, of SCHEDULE
I hereto except as set forth in a footnote thereto. The place(s) of business and
chief executive office of the Grantor and the office(s) where the Grantor keeps
its records concerning the Receivables, and all originals of all chattel paper
which evidence Receivables, are located at the address set forth in ITEM D of
SCHEDULE I hereto. The Grantor has no material trade names other than those set
forth in ITEM E of SCHEDULE I hereto. During the four months preceding the date
hereof, the Grantor has not been known by any legal name different from the one
set forth on the signature page hereto, nor has the Grantor been the subject of
any merger or other corporate reorganization, except as set forth in ITEM F of
SCHEDULE I hereto. If the Collateral includes any Inventory located in the State
of California, the Grantor is not a "retail merchant" within the meaning of
Section 9102 of the Uniform Commercial Code - Secured Transactions of the State
of California. All Receivables evidenced by a promissory note or other
instrument, negotiable document or chattel paper have been duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Facility Agent and delivered and pledged to
the Facility Agent pursuant to SECTION 4.1.7. The Grantor is not a party to any
Federal, state or local government contract except as set forth in ITEM G of
SCHEDULE I hereto.
SECTION XXVII.1.2. OWNERSHIP, NO LIENS, ETC. The Grantor owns its
Collateral free and clear of any Lien, security interest, charge or encumbrance
except for the security interest created by this Security Agreement and except
as permitted by the Credit Agreement and except for leases of Rental Equipment.
No effective financing statement or other instrument similar in effect covering
all or any part of the Collateral is on file in any recording office, except
such as may have been filed in favor of the Facility Agent relating to this
Security Agreement or as have been filed in connection with Liens permitted
pursuant to Section 7.2.3 of the Credit Agreement.
SECTION XXVII.1.3. POSSESSION AND CONTROL. The Grantor has exclusive
possession and control of its Equipment (other than Rental Equipment) and
Inventory.
-14-
214
SECTION XXVII.1.4. NEGOTIABLE DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER.
The Grantor has, contemporaneously herewith, delivered to the Facility Agent
possession of all originals of all negotiable documents, instruments and chattel
paper currently owned or held by the Grantor (duly endorsed in blank, if
requested by the Facility Agent).
SECTION XXVII.1.5. INTELLECTUAL PROPERTY COLLATERAL. With respect to
any registered Intellectual Property Collateral the loss, impairment or
infringement of which might have a Material Adverse Effect:
(a) such registered Intellectual Property
Collateral is subsisting and has not been adjudged invalid or
unenforceable, in whole or in part;
(b) such registered Intellectual Property
Collateral is valid and enforceable;
(c) the Grantor has made all necessary
filings and recordations to protect its interest in such registered
Intellectual Property Collateral, including recordations of all of its
interests in the Patent Collateral and Trademark Collateral in the
United States Patent and Trademark Office and in corresponding offices
throughout the world and its claims to the Copyright Collateral in the
United States Copyright Office and in corresponding offices throughout
the world;
(d) the Grantor is the exclusive owner of
the entire and unencumbered right, title and interest in and to such
registered Intellectual Property Collateral and no claim has been made
that the use of such Intellectual Property Collateral does or may
violate the asserted rights of any third party; and
(e) the Grantor has performed and will
continue to perform all acts and has paid and will continue to pay all
required fees and taxes to maintain each and every item of registered
Intellectual Property Collateral in full force and effect throughout
the world, as applicable.
The Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of material importance to the conduct of the Grantor's
business.
SECTION XXVII.1.6. VALIDITY, ETC. This Security Agreement creates a
valid first priority security interest in the Collateral (subject to Section
9-306 of the U.C.C. and Liens permitted pursuant to Section 7.2.3 of the Credit
Agreement), securing the payment of the Obligations, and all
-15-
215
filings and other actions necessary or desirable in the State of New York and in
each other jurisdiction where the failure to make any such filing or other
action would have a Material Adverse Effect to perfect and protect such security
interest have been duly taken, except as permitted by Section 7.1.12 of the
Credit Agreement with respect to Intellectual Property Collateral.
SECTION XXVII.1.7. AUTHORIZATION, APPROVAL, ETC. Except as have been
obtained or made and are in full force and effect, no authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required either
(a) for the grant by the Grantor of the
security interest granted hereby or for the execution, delivery and
performance of this Security Agreement by the Grantor, or
(b) for the perfection of or the exercise by
the Facility Agent of its rights and remedies hereunder.
SECTION XXVII.1.8. COMPLIANCE WITH LAWS. The Grantor is in compliance
with the requirements of all applicable laws (including the provisions of the
Fair Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to materially
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.
ARTICLE XXVIII
COVENANTS
SECTION XXVIII.1. CERTAIN COVENANTS. The Grantor covenants and agrees
that, so long as any portion of the Obligations shall remain unpaid, any Letters
of Credit shall be outstanding or any Lender shall have any outstanding
Commitment, the Grantor will, unless the Required Lenders shall otherwise
consent in writing, perform, comply with and be bound by the obligations set
forth in this Section.
SECTION XXVIII.1.1. AS TO EQUIPMENT AND INVENTORY. The Grantor hereby
agrees that it shall
(a) keep all the Equipment (other than
Rental Equipment) and Inventory (other than Inventory sold in the
ordinary course of business) at the places therefor specified in
SECTION 3.1.1 or, upon 30 days' prior written notice to the Facility
Agent, at such other places in a jurisdiction where all
-16-
216
representations and warranties set forth in ARTICLE III (including SECTION
3.1.6) shall be true and correct, and all action required pursuant to the FIRST
SENTENCE of SECTION 4.1.7 shall have been taken with respect to the Equipment
and Inventory; and
(b) cause the Equipment to be
maintained and preserved in accordance with Section 7.1.3 of the Credit
Agreement.
SECTION XXVIII.1.2. AS TO RECEIVABLES.
(a) The Grantor shall keep its
place(s) of business and chief executive office and the office(s) where
it keeps its records concerning the Receivables, and all originals of
all chattel paper which evidenced Receivables, located at the
address(es) set forth in ITEM D of SCHEDULE I hereto, or, upon 30 days'
prior written notice to the Facility Agent, at such other locations in
a jurisdiction where all actions required by the FIRST SENTENCE of
SECTION 4.1.7 shall have been taken with respect to the Receivables;
not change its name except upon 30 days' prior written notice to the
Facility Agent; hold and preserve such records and chattel paper; and
permit representatives of the Facility Agent after reasonable notice
and during normal business hours to inspect and make abstracts from
such records and chattel paper. In addition, the Grantor shall give the
Facility Agent a supplement to Schedule I hereto on each date a
Compliance Certificate is required to be delivered to the Facility
Agent under the Credit Agreement, which shall set forth any changes to
the information set forth in SECTION 3.1.1.
(b) After the occurrence of and
during the continuance of a Default of the nature set forth in Section
8.1.9 of the Credit Agreement or an Event of Default, upon written
notice by the Facility Agent to the Grantor pursuant to this SECTION
4.1.2(B), all proceeds of Collateral received by the Grantor shall be
delivered in kind to the Facility Agent for deposit to a deposit
account (the "COLLATERAL ACCOUNT") of the Grantor maintained with the
Facility Agent, and the Grantor shall not commingle any such proceeds,
and shall hold separate and apart from all other property, all such
proceeds in express trust for the benefit of the Facility Agent until
delivery thereof is made to the Facility Agent.
(c) The Facility Agent shall have
the right to apply any amount in the Collateral Account to the payment
of any Obligations which are due and payable or payable upon demand, or
to the payment of any Obligations at any time that an Event of Default
shall exist.
SECTION XXVIII.1.3. AS TO COLLATERAL.
-17-
217
(a) Until the occurrence and
continuance of a Default of the nature set forth in Section 8.1.9 of
the Credit Agreement or an Event of Default, and such time as the
Facility Agent shall notify the Grantor of the revocation of such power
and authority the Grantor (i) may in the ordinary course of its
business (except as otherwise permitted under the Credit Agreement), at
its own expense, sell, lease or furnish under the contracts of service
any of the Inventory normally held by the Grantor for such purpose, and
use and consume, in the ordinary course of its business (except as
otherwise permitted under the Credit Agreement), any raw materials,
work in process or materials normally held by the Grantor for such
purpose, (ii) will, at its own expense, endeavor to collect, as and
when due, all amounts due with respect to any of the Collateral,
including the taking of such action with respect to such collection as
the Facility Agent may reasonably request following the occurrence of a
Default of the nature set forth in Section 8.1.9 of the Credit
Agreement or an Event of Default or, in the absence of such request, as
the Grantor may deem advisable, and (iii) may grant, in the ordinary
course of business (except as otherwise permitted under the Credit
Agreement), to any party obligated on any of the Collateral, any
rebate, refund or allowance to which such party may be lawfully
entitled, and may accept, in connection therewith, the return of goods,
the sale or lease of which shall have given rise to such Collateral.
The Facility Agent, however, may, at any time following a Default of
the nature set forth in Section 8.1.9 of the Credit Agreement or an
Event of Default, after giving the Grantor notice of the revocation of
such power and authority (whether before or after the maturity of any
of the Obligations), notify any parties obligated on any of the
Collateral to make payment to the Facility Agent of any amounts due or
to become due thereunder and enforce collection of any of the
Collateral by suit or otherwise and surrender, release, or exchange all
or any part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any indebtedness
thereunder or evidenced thereby. Upon request of the Facility Agent
following a Default of the nature set forth in Section 8.1.9 of the
Credit Agreement or an Event of Default, the Grantor will, at its own
expense, notify any parties obligated on any of the Collateral to make
payment to the Facility Agent of any amounts due or to become due
thereunder.
(b) The Facility Agent is
authorized to endorse, in the name of the Grantor, any item, howsoever
received by the Facility Agent, representing any payment on or other
proceeds of any of the Collateral.
SECTION XXVIII.1.4. AS TO INTELLECTUAL PROPERTY COLLATERAL. The Grantor
covenants and agrees to comply with the following provisions as
-18-
218
such provisions relate to any Intellectual Property Collateral of the Grantor
that:
(a) the Grantor shall not, unless
the Grantor shall either (i) reasonably and in good faith determine
(and notice of such determination shall have been delivered to the
Facility Agent) that any of the registered Patent Collateral is of
negligible economic value to the Grantor, or (ii) have a valid business
purpose to do otherwise, do any act, or omit to do any act, whereby any
of the registered Patent Collateral may lapse or become abandoned or
dedicated to the public or unenforceable.
(b) the Grantor shall not, and the
Grantor shall not permit any of its licensees to, unless the Grantor
shall either (i) reasonably and in good faith determine (and notice of
such determination shall have been delivered to the Facility Agent)
that any of the registered Trademark Collateral is of negligible
economic value to the Grantor, or (ii) have a valid business purpose to
do otherwise,
(i) fail to continue to use any of
the registered Trademark Collateral in order
to maintain all of the Trademark Collateral
in full force free from any claim of
abandonment for non-use,
(ii) fail to maintain as in the
past the quality of products and services
offered under all of the registered
Trademark Collateral,
(iii) fail to employ all of the
registered Trademark Collateral registered
with any Federal or state or foreign
authority with an appropriate notice of such
registration,
(iv) adopt or use any other
registered Trademark which is confusingly
similar or a colorable imitation of any of
the registered Trademark Collateral,
(v) use any of the registered
Trademark Collateral except for the uses for
which registration or application for
registration of all of the Trademark
Collateral has been made, and
-19-
219
(vi) do or permit any act or knowingly omit
to do any act whereby any of the registered
Trademark Collateral may lapse or become
invalid or unenforceable.
(c) the Grantor shall not, unless
the Grantor shall either
(i) reasonably and in good faith
determine (and notice of such determination
shall have been delivered to the Facility
Agent) that any of the registered Copyright
Collateral or any of the Trade Secrets
Collateral is of negligible economic value
to the Grantor, or
(ii) have a valid business purpose
to do otherwise,
do or permit any act or knowingly omit to do any act whereby any of the
registered Copyright Collateral may lapse or become invalid or
unenforceable or placed in the public domain except upon expiration of
the end of an unrenewable term of a registration thereof.
(d) the Grantor shall notify the
Facility Agent immediately if it knows, or has reason to know, that any
application or registration relating to any material item of the
Intellectual Property Collateral may become abandoned or dedicated to
the public or placed in the public domain or invalid or unenforceable,
or of any adverse determination or development (including the
institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office, the United
States Copyright Office or any foreign counterpart thereof or any
court) regarding the Grantor's ownership of any of the Intellectual
Property Collateral, its right to register the same or to keep and
maintain and enforce the same.
(e) in no event shall the Grantor
or any of its agents, employees, designees or licensees file an
application for the registration of any Intellectual Property
Collateral with the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, unless it promptly
informs the Facility Agent, and upon request of the Facility Agent,
executes and delivers any and all agreements, instruments, documents
and papers as the
-20-
220
Facility Agent may reasonably request to evidence the Facility Agent's
security interest in such Intellectual Property Collateral and the
goodwill and general intangibles of the Grantor relating thereto or
represented thereby.
(f) the Grantor shall take all
necessary steps, including in any proceeding before the United States
Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political
subdivision thereof, to maintain and pursue any application (and to
obtain the relevant registration) filed with respect to, and to
maintain any registration of, the Intellectual Property Collateral,
including the filing of applications for renewal, affidavits of use,
affidavits of incontestability and opposition, interference and
cancellation proceedings and the payment of fees and taxes (except to
the extent that dedication, abandonment or invalidation is permitted
under the foregoing CLAUSES (A), (B) and (C)).
(g) the Grantor shall,
contemporaneously herewith, execute and deliver to the Facility Agent a
Patent Security Agreement, a Trademark Security Agreement and a
Copyright Security Agreement in the forms of EXHIBIT A, EXHIBIT B and
EXHIBIT C hereto, respectively, and shall execute and deliver to the
Facility Agent any other document required to acknowledge or register
or perfect the Facility Agent's interest in any part of the
Intellectual Property Collateral.
SECTION XXVIII.1.5. INSURANCE. The Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
required pursuant to the Credit Agreement and will, upon the request of the
Facility Agent, furnish a certificate of a reputable insurance broker setting
forth the nature and extent of all insurance maintained by the Grantor in
accordance with this Section. Without limiting the foregoing, the Grantor
further agrees as follows:
(a) Each policy for property
insurance shall show the Facility Agent as loss payee.
(b) Each policy for
liability insurance shall show the Facility Agent as an additional
insured.
(c) With respect to each life
insurance policy, the Grantor shall execute and deliver to the Facility
Agent a collateral assignment, notice of which has been acknowledged in
writing by the insurer.
-21-
221
(d) Each insurance policy shall
provide that at least 30 days' prior written notice of cancellation or
of lapse shall be given to the Facility Agent by the insured.
(e) The Grantor shall, if so
requested by the Facility Agent, deliver to the Facility Agent a copy
of each insurance policy.
(f) All payments in respect of
property insurance and life insurance shall be deposited to the
Collateral Account and if there shall be no Collateral Account shall be
paid to the Grantor.
SECTION XXVIII.1.6. TRANSFERS AND OTHER LIENS. The Grantor shall not:
(a) sell, assign (by operation of
law or otherwise) or otherwise dispose of any of the Collateral, except
Inventory in the ordinary course of business, except for the lease of
Rental Equipment or as permitted by the Credit Agreement; or
(b) create or suffer to exist any
Lien or other charge or encumbrance upon or with respect to any of the
Collateral to secure Indebtedness of any Person or entity, except for
the security interest created by this Security Agreement and except as
permitted by the Credit Agreement.
SECTION XXVIII.1.7. FURTHER ASSURANCES, ETC. The Grantor agrees that,
from time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action, that may be
necessary or desirable, or that the Facility Agent may request, in order to
perfect, preserve and protect any security interest granted or purported to be
granted hereby or to enable the Facility Agent to exercise and enforce its
rights and remedies hereunder with respect to any Collateral. Without limiting
the generality of the foregoing, the Grantor will
(a) ▇▇▇▇ conspicuously each
document included in the Inventory, each chattel paper included in the
Receivables and each Related Contract and, at the request of the
Facility Agent, each of its records pertaining to the Collateral with a
legend, in form and substance satisfactory to the Facility Agent,
indicating that such document, chattel paper, Related Contract or
Collateral is subject to the security interest granted hereby;
(b) if any Receivable shall be
evidenced by a promissory note or other instrument, negotiable document
or
-22-
222
chattel paper, deliver and pledge to the Facility Agent hereunder such
promissory note, instrument, negotiable document or chattel paper duly
endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance reasonably satisfactory to the
Facility Agent;
(c) execute and file such financing
or continuation statements, or amendments thereto, and such other
instruments or notices (including any assignment of claim form under or
pursuant to the federal assignment of claims statute, 31 U.S.C. ss.
3726, any successor or amended version thereof or any regulation
promulgated under or pursuant to any version thereof), as may be
necessary or desirable, or as the Facility Agent may reasonably
request, in order to perfect and preserve the security interests and
other rights granted or purported to be granted to the Facility Agent
hereby; and
(d) furnish to the Facility Agent,
from time to time at the Facility Agent's request, statements and
schedules further identifying and describing the Collateral and such
other reports in connection with the Collateral as the Facility Agent
may reasonably request, all in reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
the Grantor hereby authorizes the Facility Agent to file one or more financing
or continuation statements, and amendments thereto, relative to all or any part
of the Collateral without the signature of the Grantor where permitted by law. A
carbon, photographic or other reproduction of this Security Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
ARTICLE XXIX
THE FACILITY AGENT
SECTION XXIX.1. FACILITY AGENT APPOINTED ATTORNEY-IN-FACT. The Grantor
hereby irrevocably appoints the Facility Agent the Grantor's attorney-in-fact,
with full authority in the place and stead of the Grantor and in the name of the
Grantor or otherwise, from time to time in the Facility Agent's discretion,
following the occurrence and continuation of a Default of the nature set forth
in Section 8.1.9 of the Credit Agreement or an Event of Default, to take any
action and to execute any instrument which the Facility Agent may reasonably
deem necessary or advisable to accomplish the purposes of this Security
Agreement, including:
-23-
223
(a) to ask, demand, collect, ▇▇▇
for, recover, compromise, receive and give acquittance and receipts for
moneys due and to become due under or in respect of any of the
Collateral;
(b) to receive, endorse, and
collect any drafts or other instruments, documents and chattel paper,
in connection with CLAUSE (A) above;
(c) to file any claims or take any
action or institute any proceedings which the Facility Agent may
reasonably deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Facility Agent
with respect to any of the Collateral; and
(d) to perform the affirmative
obligations of the Grantor hereunder (including all obligations of the
Grantor pursuant to SECTION 4.1.7).
The Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION XXIX.2. FACILITY AGENT MAY PERFORM. If the Grantor fails to
perform any agreement contained herein, the Facility Agent may itself perform,
or cause performance of, such agreement, and the expenses of the Facility Agent
incurred in connection therewith shall be payable by the Grantor pursuant to
SECTION 6.2.
SECTION XXIX.3. FACILITY AGENT HAS NO DUTY. In addition to, and not in
limitation of, SECTION 2.4, the powers conferred on the Facility Agent hereunder
are solely to protect its interest (on behalf of the Secured Parties) in the
Collateral and shall not impose any duty on it to exercise any such powers.
Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Facility Agent
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
any Collateral.
SECTION 5.4. REASONABLE CARE. The Facility Agent is required to
exercise reasonable care in the custody and preservation of any of the
Collateral in its possession; PROVIDED, HOWEVER, the Facility Agent shall be
deemed to have exercised reasonable care in the custody and preservation of any
of the Collateral, if it takes such action for that purpose as the Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure
-24-
224
of the Facility Agent to comply with any such request at any time shall not in
itself be deemed a failure to exercise reasonable care.
ARTICLE XXX
REMEDIES
SECTION XXX.1. CERTAIN REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) The Facility Agent may exercise
in respect of the Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and
remedies of a secured party on default under the U.C.C. (whether or not
the U.C.C. applies to the affected Collateral) and also may
(i) require the Grantor to, and the
Grantor hereby agrees that it will, at its
expense and upon request of the Facility
Agent forthwith, assemble all or part of the
Collateral as directed by the Facility Agent
and make it available to the Facility Agent
at a place to be designated by the Facility
Agent which is reasonably convenient to both
parties, and
(ii) without notice except as
specified below, sell the Collateral or any
part thereof in one or more parcels at
public or private sale, at any of the
Facility Agent's offices or elsewhere, for
cash, on credit or for future delivery, and
upon such other terms as the Facility Agent
may deem commercially reasonable. The
Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten
days' prior notice to the Grantor of the
time and place of any public sale or the
time after which any private sale is to be
made shall constitute reasonable
notification. The Facility Agent shall not
be obligated to make any sale of Collateral
regardless of notice of sale having been
given. The Facility Agent
-25-
225
may adjourn any public or private sale from
time to time by announcement at the time and
place fixed therefor, and such sale may,
without further notice, be made at the time
and place to which it was so adjourned.
(b) All cash proceeds received by
the Facility Agent in respect of any sale
of, collection from, or other realization
upon all or any part of the Collateral may,
in the discretion of the Facility Agent, be
held by the Facility Agent as collateral
for, and/or then or at any time thereafter
applied (after payment of any amounts
payable to the Facility Agent pursuant to
SECTION 6.2) in whole or in part by the
Facility Agent for the ratable benefit of
the Secured Parties against, all or any part
of the Obligations in such order as the
Facility Agent shall elect. Any surplus of
such cash or cash proceeds held by the
Facility Agent and remaining after payment
in full in cash of all the Obligations shall
be paid over to the Grantor or to whomsoever
may be lawfully entitled to receive such
surplus.
SECTION XXX.2. INDEMNITY AND EXPENSES.
(a) The Grantor agrees to indemnify
the Facility Agent from and against any and all claims, losses and
liabilities arising out of or resulting from this Security Agreement
(including enforcement of this Security Agreement), except claims,
losses or liabilities resulting from the Facility Agent's gross
negligence or wilful misconduct.
(b) The Grantor will upon demand
pay to the Facility Agent the amount of any and all reasonable
expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, which the Facility Agent may
incur in connection with
(i) the administration of this
Security Agreement,
(ii) the custody, preservation, use
or operation of, or the sale of, collection
from, or other realization upon, any of the
Collateral, and
(iii) the exercise or enforcement
of any of the rights of the Facility Agent
or the Secured Parties hereunder, or
-26-
226
(iv) the failure by the Grantor to
perform or observe any of the provisions
hereof.
ARTICLE XXXI
MISCELLANEOUS PROVISIONS
SECTION XXXI.1. LOAN DOCUMENT. This Security Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof.
SECTION XXXI.2. AMENDMENTS; ETC. No amendment to or waiver of any
provision of this Security Agreement nor consent to any departure by the Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Facility Agent (on behalf of the Lenders or the Required
Lenders, as the case may be), and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION XXXI.3. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and mailed or telecopied or delivered to either party hereto,
addressed to such party at the address of such party specified in the Credit
Agreement. All such notices and other communications, when mailed and properly
addressed with postage prepaid or if properly addressed and sent by pre-paid
courier service, shall be deemed given when received; any such notice or
communication, if transmitted by telecopier, shall be deemed given when
transmitted and electronically confirmed.
SECTION XXXI.4. SECTION CAPTIONS. Section captions used in this
Security Agreement are for convenience of reference only, and shall not affect
the construction of this Security Agreement.
SECTION XXXI.5. SEVERABILITY. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Security Agreement.
SECTION XXXI.6. COUNTERPARTS. This Security Agreement may be executed
by the parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall
227
constitute together but one and the same agreement.
SECTION XXXI.7. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK),
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS
SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND THEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
-28-
228
IN WITNESS WHEREOF, the Grantor has caused this Security Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
DAYTON SUPERIOR CORPORATION
By
----------------------------------
Name:
Title:
BANK ONE, N.A., as Facility Agent
By
----------------------------------
Name:
Title:
-29-
229
SCHEDULE I
to Borrower
Security Agreement
Item A. Location Of Equipment
---------------------
Description Location
----------- --------
1.
2.
3.
Item B. Location of Inventory
---------------------
Description Location
----------- --------
1.
2.
3.
Item C. Location Of Lock Boxes
----------------------
Contact
Bank Name and Address Account Number Person
--------------------- -------------- ------
1.
2.
3.
Item D. Place(s) of Business and Chief Executive Office
-----------------------------------------------
Item E. Trade Names
-----------
Item F. Merger or Other Corporate Reorganization
----------------------------------------
Item G. Government Contracts
---------------------
230
SCHEDULE II
to Borrower
Security Agreement
Item A. Patents
-------
Issued Patents
--------------
**/Country Patent No. Issue Date Inventor(s) Title
---------- ---------- ---------- -----------------
Pending Patent Applications
---------------------------
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- -----------------
Patent Applications In Preparation
----------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- -----------------
Item B. Patent Licenses
---------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
------------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country name.
231
SCHEDULE III
to Borrower
Security Agreement
Item A. Trademarks
----------
Registered Trademarks
---------------------
*/Country Trademark Registration No. Registration Date
--------- --------- ---------------- -----------------
Pending Trademark Applications
------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications In Preparation
-------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
Item B. Trademark Licenses
------------------
*Country Or Effective Expiration
Territory Trademark Licensor Licensee Date Date
--------- --------- -------- -------- ---- ----
------------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country name.
232
Schedule IV
To Borrower
Security Agreement
Item A. Copyrights/Mask Works
---------------------
Registered Copyrights/mask Works
--------------------------------
*/Country Registration No. Registration Date Author(s) Title
--------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications In Preparation
------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
----------------------------
*Country Or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
------------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country name.
233
Schedule V
To Borrower
Security Agreement
Trade Secret Or Know-how Licenses
---------------------------------
*/Country Or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
------------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country name.
EXHIBIT A
to Borrower
Security Agreement
PATENT SECURITY AGREEMENT
-------------------------
This PATENT SECURITY AGREEMENT (this "AGREEMENT"), dated as of
__________ __, 19__, is made between DAYTON SUPERIOR CORPORATION, an Ohio
corporation (the "Grantor"), and BANK ONE, N.A., as Facility Agent (together
with any successor(s) thereto in such capacity, the "FACILITY AGENT") for each
of the Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of September 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among the Grantor, the various financial
institutions as are, or may from time to time become, parties thereto (each,
individually, a "LENDER", and collectively, the "LENDERS"), DLJ Capital Funding,
Inc., as the Syndication Agent for the Lenders, Bank of America National Trust
and Savings Association, as the Documentation Agent for the Lenders and the
Facility Agent, the Lenders have extended Commitments to make Credit Extensions
to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Borrower Security Agreement, dated as of September 29,
1997 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "SECURITY AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Facility Agent a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement;
234
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Credit
Extensions (including the initial Credit Extension) to the Grantor pursuant to
the Credit Agreement, the Grantor agrees, for the benefit of each Secured Party,
as follows:
SECTION _______________ DEFINITIONS. Unless otherwise defined herein or
the context otherwise requires, terms used in this Agreement, including its
preamble and recitals, have the meanings provided (or incorporated by reference)
in the Security Agreement.
SECTION _______________ GRANT OF SECURITY INTEREST. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Facility Agent, and grant to the
Facility Agent a security interest in, for its benefit and the benefit of each
Secured Party, all of the following property (the "PATENT COLLATERAL"), whether
now owned or hereafter acquired or existing by it:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing anywhere in the world and including each patent and patent
application referred to in ITEM A of ATTACHMENT 1 attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in CLAUSE (A);
(c) all patent licenses, including each patent license
referred to in ITEM B of ATTACHMENT 1 attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to ▇▇▇ third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in ITEM A of ATTACHMENT 1 attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred to in ITEM B of ATTACHMENT 1 attached hereto, and all
rights corresponding thereto throughout the world.
-2-
235
SECTION _______________ SECURITY AGREEMENT. This Agreement has been
executed and delivered by the Grantor for the purpose of registering the
security interest of the Facility Agent in the Patent Collateral with the United
States Patent and Trademark Office and corresponding offices in other countries
of the world. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Facility Agent for its benefit and the benefit of each Secured Party under the
Security Agreement. The Security Agreement (and all rights and remedies of the
Facility Agent and each Secured Party thereunder) shall remain in full force and
effect in accordance with its terms.
SECTION _______________ RELEASE OF SECURITY INTEREST. Upon payment in
full in cash of all Obligations, the termination or expiry of all Letters of
Credit and the termination of all Commitments, the Facility Agent shall, at the
Grantor's expense, execute and deliver to the Grantor all instruments and other
documents as may be necessary or proper to release the lien on and security
interest in the Patent Collateral which has been granted hereunder.
SECTION _______________ ACKNOWLEDGMENT. The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Facility Agent with
respect to the security interest in the Patent Collateral granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.
SECTION _______________ LOAN DOCUMENT, ETC. This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions of the Credit Agreement.
SECTION _______________ COUNTERPARTS. This Agreement may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
-3-
236
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
DAYTON SUPERIOR CORPORATION
By
--------------------------------
Name:
Title:
BANK ONE, N.A., as Facility Agent
By
--------------------------------
Name:
Title:
-4-
237
ATTACHMENT 1
to Borrower Patent
Security Agreement
Item A. Patents
-------
Issued Patents
--------------
**/Country Patent No. Issue Date Inventor(s) Title
---------- ---------- ---------- -----------------
Pending Patent Applications
---------------------------
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- -----------------
Patent Applications In Preparation
----------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- -----------------
Item B. Patent Licenses
---------------
*Country Or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
------------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country name.
238
EXHIBIT B
to Borrower
Security Agreement
TRADEMARK SECURITY AGREEMENT
----------------------------
This TRADEMARK SECURITY AGREEMENT (this "AGREEMENT"), dated as of
__________ __, 19__, is made between DAYTON SUPERIOR CORPORATION, an Ohio
corporation (the "GRANTOR"), and BANK ONE, N.A., as Facility Agent (together
with any successor(s) thereto in such capacity, the "FACILITY AGENT") for each
of the Secured Parties;
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement, dated as of September 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among the Grantor, the various financial
institutions as are, or may from time to time become, parties thereto (each,
individually, a "LENDER", and collectively, the "LENDERS"), DLJ Capital Funding,
Inc., as the Syndication Agent for the Lenders, Bank of America National Trust
and Savings Association, as the Documentation Agent for the Lenders and the
Facility Agent, the Lenders have extended Commitments to make Credit Extensions
to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Borrower Security Agreement, dated as of September 29,
1997 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "SECURITY AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Facility Agent a continuing security interest in all of the Trademark
Collateral (as defined below) to secure all Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement;
239
-5-
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Credit
Extensions (including the initial Credit Extension) to the Grantor pursuant to
the Credit Agreement, the Grantor agrees, for the benefit of each Secured Party,
as follows:
SECTION _______________ definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Agreement, including its
preamble and recitals, have the meanings provided (or incorporated by reference)
in the Security Agreement.
SECTION _______________ GRANT OF SECURITY INTEREST. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Facility Agent, and grant to the
Facility Agent a security interest in, for its benefit and the benefit of each
Secured Party, all of the following property (the "TRADEMARK COLLATERAL"),
whether now owned or hereafter acquired or existing by it:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source of
business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of a like
nature (all of the foregoing items in this CLAUSE (a) being
collectively called a "TRADEMARK"), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent
and Trademark Office or in any office or agency of the United States of
America or any State thereof or any foreign country, including those
referred to in Item A of Attachment 1 attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in ITEM B of ATTACHMENT 1 attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in CLAUSES (a) and (b);
-2-
240
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, CLAUSES (a) and (b); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by the Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in ITEM A and
ITEM B of ATTACHMENT 1 attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach or
enforcement of any Trademark license.
SECTION _______________ SECURITY AGREEMENT. This Agreement has been
executed and delivered by the Grantor for the purpose of registering the
security interest of the Facility Agent in the Trademark Collateral with the
United States Patent and Trademark Office and corresponding offices in other
countries of the world. The security interest granted hereby has been granted as
a supplement to, and not in limitation of, the security interest granted to the
Facility Agent for its benefit and the benefit of each Secured Party under the
Security Agreement. The Security Agreement (and all rights and remedies of the
Facility Agent and each Secured Party thereunder) shall remain in full force and
effect in accordance with its terms.
SECTION _______________ RELEASE OF SECURITY INTEREST. Upon payment in
full in cash of all Obligations, the termination or expiry of all Letters of
Credit and the termination of all Commitments, the Facility Agent shall, at the
Grantor's expense, execute and deliver to the Grantor all instruments and other
documents as may be necessary or proper to release the lien on and security
interest in the Trademark Collateral which has been granted hereunder.
SECTION _______________ ACKNOWLEDGMENT. The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Facility Agent with
respect to the security interest in the Trademark Collateral granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.
-3-
241
SECTION _______________ LOAN DOCUMENT, ETC. This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions of the Credit Agreement.
SECTION _______________ COUNTERPARTS. This Agreement may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
-4-
242
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
DAYTON SUPERIOR CORPORATION
By
----------------------
Name:
Title:
BANK ONE, N.A., as Facility Agent
By
----------------------
Name:
Title:
-5-
243
ATTACHMENT 1
to Borrower Trademark
Security Agreement
Item A. Trademarks
----------
Registered Trademarks
---------------------
*/Country Trademark Registration No. Registration Date
--------- --------- ---------------- -----------------
Pending Trademark Applications
------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
Item B. Trademark Licenses
------------------
----------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country name.
244
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
----------- --------- -------- -------- --------- ----------
245
EXHIBIT C
to Borrower
Security Agreement
COPYRIGHT SECURITY AGREEMENT
----------------------------
This COPYRIGHT SECURITY AGREEMENT (this "AGREEMENT"), dated as of
__________ __, 19__, is made between DAYTON SUPERIOR CORPORATION, an Ohio
corporation (the "GRANTOR"), and BANK ONE, N.A., as Facility Agent (together
with any successor(s) thereto in such capacity, the "FACILITY AGENT") for each
of the Secured Parties;
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement, dated as of September 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among the Grantor, the various financial
institutions as are, or may from time to time become, parties thereto (each
individually a "LENDER" and collectively the "LENDERS"), DLJ Capital Funding,
Inc., as the Syndication Agent for the Lenders, Bank of America National Trust
and Savings Association, as the Documentation Agent for the Lenders and the
Facility Agent, the Lenders have extended Commitments to make Credit Extensions
to the Grantor;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Borrower Security Agreement, dated as of September 29,
1997 (as amended, supplemented, amended and restated or otherwise modified from
time to time, the "SECURITY AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Facility Agent a continuing security interest in all of the Copyright
Collateral (as defined below) to secure all Obligations; and
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement;
246
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Credit
Extensions (including the initial Credit Extension) to the Grantor pursuant to
the Credit Agreement, the Grantor agrees, for the benefit of each Secured Party,
as follows:
SECTION I. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION II. GRANT OF SECURITY INTEREST. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Obligations, the Grantor does hereby mortgage, pledge and
hypothecate to the Facility Agent, and grant to the Facility Agent a security
interest in, for its benefit and the benefit of each Secured Party, all of the
following property (the "Copyright Collateral"), whether now owned or hereafter
acquired or existing by it, being all copyrights (including all copyrights for
semi-conductor chip product mask works) of the Grantor, whether statutory or
common law, registered or unregistered, now or hereafter in force throughout the
world including all of the Grantor's right, title and interest in and to all
copyrights registered in the United States Copyright Office or anywhere else in
the world and also including the copyrights referred to in Item A of Attachment
1 attached hereto, and all applications for registration thereof, whether
pending or in preparation, all copyright licenses, including each copyright
license referred to in Item B of Attachment 1 attached hereto, the right to ▇▇▇
for past, present and future infringements of any thereof, all rights
corresponding thereto throughout the world, all extensions and renewals of any
thereof and all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and proceeds of suit.
SECTION III. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of registering the security interest of
the Facility Agent in the Copyright Collateral with the United States Copyright
Office and corresponding offices in other countries of the world. The security
interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to the Facility Agent for its
benefit and the benefit of each Secured Party under the Security Agreement. The
Security Agreement (and all rights and remedies of the Facility Agent and
-2-
247
each Secured Party thereunder) shall remain in full force and effect in
accordance with its terms.
SECTION IV. RELEASE OF SECURITY INTEREST. Upon payment in full in cash
of all Obligations, the termination or expiry of all Letters of Credit and the
termination of all Commitments, the Facility Agent shall, at the Grantor's
expense, execute and deliver to the Grantor all instruments and other documents
as may be necessary or proper to release the lien on and security interest in
the Copyright Collateral which has been granted hereunder.
SECTION V. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Facility Agent with respect to
the security interest in the Copyright Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION VI. LOAN DOCUMENT, ETC. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.
SECTION VII. COUNTERPARTS. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
-3-
248
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
DAYTON SUPERIOR CORPORATION
By
-------------------------------
Name:
Title:
BANK ONE, N.A., as Facility Agent
By
-------------------------------
Name:
Title:
-4-
249
ATTACHMENT 1
to Borrower Copyright
Security Agreement
Item A. Copyrights/Mask Works
---------------------
Registered Copyrights/Mask Works
--------------------------------
*/Country Registration No. Registration Date Author(s) Title
--------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Item B. Copyright/Mask Work Licenses
-----------------------------
----------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country name.
250
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
----------- -------- -------- --------- ---------- -------
251
EXHIBIT K-2
SUBSIDIARY SECURITY AGREEMENT
-----------------------------
This SUBSIDIARY SECURITY AGREEMENT (as amended, supplemented, amended
and restated or otherwise modified from time to time, this "SECURITY
AGREEMENT"), dated as of September 29, 1997, is made by each Subsidiary (as
defined below) of the Borrower (as defined below) a signatory hereto (each,
individually, a "GRANTOR", and collectively, the "GRANTORS"), in favor of BANK
ONE, N.A., as facility agent (together with its successor(s) thereto, in such
capacity the "FACILITY AGENT") for each of the Secured Parties.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement, dated as of September 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among Dayton Superior Corporation, an Ohio
corporation (the "BORROWER"), the various financial institutions as are, or may
from time to time become, parties thereto (each, individually, a "LENDER", and
collectively, the "LENDERS"), DLJ Capital Funding, Inc., as the Syndication
Agent for the Lenders, Bank of America National Trust and Savings Association,
as the Documentation Agent for the Lenders, Bankers Trust Company, as the
Administrative Agent for the Lenders and the Facility Agent, the Lenders have
extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
each Grantor is required to execute and deliver this Security Agreement;
WHEREAS, each Grantor is a Subsidiary of the Borrower;
WHEREAS, each Grantor has duly authorized the execution, delivery and
performance of this Security Agreement; and
WHEREAS, it is in the best interests of each Grantor to execute this
Security Agreement inasmuch as such Grantor will derive substantial direct and
indirect benefits from the Credit Extensions made
252
from time to time to the Borrower by the Lenders pursuant to the Credit
Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Lenders
to make Credit Extensions (including the initial Credit Extension) to the
Borrower pursuant to the Credit Agreement, each Grantor agrees, for the benefit
of each Secured Party, as follows:
ARTICLE VIII
DEFINITIONS
SECTION VIII.1. CERTAIN TERMS. The following terms (whether or not
underscored) when used in this Security Agreement, including its preamble and
recitals, shall have the following meanings (such definitions to be equally
applicable to the singular and plural forms thereof):
"BORROWER" is defined in the FIRST RECITAL.
"COLLATERAL" is defined in SECTION 2.1.
"COLLATERAL ACCOUNT" is defined in SECTION 4.1.2(b).
"COMPUTER HARDWARE AND SOFTWARE COLLATERAL" means:
(a) all computer and other electronic data processing hardware,
integrated computer systems, central processing units, memory units,
display terminals, printers, features, computer elements, card readers,
tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories and all peripheral
devices and other related computer hardware;
(b) all software programs (including both source code, object
code and all related applications and data files), whether now owned,
licensed or leased or hereafter acquired by any Grantor, designed for
use on the computers and electronic data processing hardware described
in CLAUSE (a) above;
(c) all firmware associated therewith;
-8-
253
(d) all documentation (including flow charts, logic diagrams,
manuals, guides and specifications) with respect to such hardware,
software and firmware described in the preceding CLAUSES (a) through
(c); and
(e) all rights with respect to all of the foregoing, including
any and all copyrights, licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support
rights, improvement rights, renewal rights and indemnifications and any
substitutions, replacements, additions or model conversions of any of
the foregoing.
"COPYRIGHT COLLATERAL" means all copyrights (including al copyrights
for semi-conductor chip product mask works) of each Grantor, whether statutory
or common law, registered or unregistered, now or hereafter in force throughout
the world including all of such Grantor's right, title and interest in and to
all copyrights registered in the United States Copyright Office or anywhere else
in the world and also including the copyrights referred to in ITEM A of SCHEDULE
IV attached hereto, and all applications for registration thereof, whether
pending or in preparation, all copyright licenses, including each copyright
license referred to in ITEM B of SCHEDULE IV attached hereto, the right to ▇▇▇
for past, present and future infringements of any thereof, all rights
corresponding thereto throughout the world, all extensions and renewals of any
thereof and all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and proceeds of suit.
"CREDIT AGREEMENT" is defined in the first recital.
"EQUIPMENT" is defined in clause (a) of Section 2.1.
"FACILITY AGENT" is defined in the preamble.
"GRANTOR" and "GRANTORS" are defined in the preamble.
"INTELLECTUAL PROPERTY COLLATERAL" means, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
"INVENTORY" is defined in clause (b) of Section 2.1
"LENDER" and "LENDERS" are defined in the first recital.
"PATENT COLLATERAL" means:
-9-
254
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing anywhere in the world and including each patent and patent
application referred to in ITEM A of SCHEDULE II attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in CLAUSE (a);
(c) all patent licenses, including each patent license referred
to in ITEM B of SCHEDULE II attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to ▇▇▇ third parties for past, present or future infringements of
any patent or patent application, including any patent or patent
application referred to in ITEM A of SCHEDULE II attached hereto, and
for breach or enforcement of any patent license, including any patent
license referred to in ITEM B of SCHEDULE II attached hereto, and all
rights corresponding thereto throughout the world.
"RECEIVABLES" is defined in CLAUSE (c) of SECTION 2.1.
"RELATED CONTRACTS" is defined in CLAUSE (c) of SECTION 2.1.
"RENTAL EQUIPMENT" means, as of any date of determination, any
equipment which (i) is purchased and owned by the Borrower or any of its
wholly-owned U.S. Subsidiaries and (ii) is leased by the Borrower or such
Subsidiary to any Person (other than an Affiliate) pursuant to the terms of
which the Borrower or such Subsidiary is then charging for the rental of such
equipment.
"SECURED OBLIGATIONS" is defined in SECTION 2.2.
"SECURED PARTIES" means, collectively, the Lenders, the Agents
and all Affiliates of the Lenders which may be party to any Loan
Document (including without limitation any Rate Protection Agreement).
"SECURITY AGREEMENT" is defined in the preamble.
"TRADEMARK COLLATERAL" means:
-10-
255
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source of
business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of a like
nature (all of the foregoing items in this CLAUSE (a) being
collectively called a "TRADEMARK"), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent
and Trademark Office or in any office or agency of the United States of
America or any State thereof or any foreign country, including those
referred to in ITEM A of SCHEDULE III attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in ITEM B of SCHEDULE III attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in CLAUSES (a) and (b);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, CLAUSES (a) and (b); and
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by any Grantor against third parties for past,
present or future infringement or dilution of any Trademark, Trademark
registration or Trademark license, including any Trademark, Trademark
registration or Trademark license referred to in ITEM A and ITEM B of
Schedule III attached hereto, or for any injury to the goodwill
associated with the use of any such Trademark or for breach or
enforcement of any Trademark license.
"TRADE SECRETS COLLATERAL" means all common law and statutory trade
secrets and all other confidential or proprietary or useful information and all
know-how obtained by or used in or contemplated at any time for use in the
business of any Grantor (all of the foregoing being collectively called a "TRADE
SECRET"), whether or not such Trade Secret has
-11-
256
been reduced to a writing or other tangible form, including all documents and
things embodying, incorporating or referring in any way to such Trade Secret,
all Trade Secret licenses, including each Trade Secret license referred to in
Schedule V attached hereto, and including the right to ▇▇▇ for and to enjoin and
to collect damages for the actual or threatened misappropriation of any Trade
Secret and for the breach or enforcement of any such Trade Secret license.
"U.C.C." means the Uniform Commercial Code, as in effect from time to
time in the State of New York.
SECTION VIII.2. CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein or the context otherwise requires, terms used in this Security Agreement,
including its preamble and recitals, have the meanings provided in the Credit
Agreement.
SECTION VIII.3. U.C.C. DEFINITIONS. Unless otherwise defined herein or
in the Credit Agreement or the context otherwise requires, terms for which
meanings are provided in the U.C.C. are used in this Security Agreement,
including its preamble and recitals, with such meanings.
ARTICLE IX
SECURITY INTEREST
SECTION IX.1. GRANT OF SECURITY. Each Grantor hereby assigns and
pledges to the Facility Agent for its benefit and the ratable benefit of each of
the Secured Parties, and hereby grants to the Facility Agent for its benefit and
the ratable benefit of each of the Secured Parties, a security interest in all
of the following, whether now or hereafter existing or acquired by such Grantor
(the "COLLATERAL"):
(a) all equipment in all of its forms of such Grantor, wherever
located, including all parts thereof and all accessions, additions,
attachments, improvements, substitutions and replacements thereto and
therefor and all accessories related thereto (any and all of the
foregoing being the "EQUIPMENT");
(b) all inventory in all of its forms of such Grantor, wherever
located, including
(i) all raw materials and work in process therefor,
finished goods thereof, and
-12-
257
materials used or consumed in the manufacture or production
thereof,
(ii) all goods in which such Grantor has an interest
in mass or a joint or other interest or right of any kind
(including goods in which such Grantor has an interest or right
as consignee), and
(iii) all goods which are returned to or repossessed
by such Grantor,
and all accessions thereto, products thereof and documents therefor
(any and all such inventory, materials, goods, accessions, products and
documents being the "INVENTORY");
(c) all accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles (including tax refunds)
of such Grantor, whether or not arising out of or in connection with
the sale or lease of goods or the rendering of services, and all rights
of such Grantor now or hereafter existing in and to all security
agreements, guaranties, leases and other contracts securing or
otherwise relating to any such accounts, contracts, contract rights,
chattel paper, documents, instruments, and general intangibles (any and
all such accounts, contracts, contract rights, chattel paper,
documents, instruments, and general intangibles being the
"RECEIVABLES", and any and all such security agreements, guaranties,
leases and other contracts being the "RELATED CONTRACTS");
(d) all Intellectual Property Collateral of such Grantor;
(e) all books, records, writings, data bases, information and
other property relating to, used or useful in connection with,
evidencing, embodying, incorporating or referring to, any of the
foregoing in this SECTION 2.1;
(f) all of such Grantor's other property and rights of every
kind and description and interests therein; and
(g) all products, rents, issues, profits, returns, income and
proceeds of and from any and all of the foregoing Collateral (including
proceeds which constitute
-13-
258
property of the types described in CLAUSES (a), (b), (c), (d), (e) and
(f), proceeds deposited from time to time in the Collateral Account and
in any lock boxes of such Grantor, and, to the extent not otherwise
included, all payments under insurance (whether or not the Facility
Agent is the loss payee thereof), or any indemnity, warranty or
guaranty, payable by reason of loss or damage to or otherwise with
respect to any of the foregoing Collateral).
Notwithstanding the foregoing, "Collateral" shall not include any general
intangibles or other rights arising under any contracts, instruments, licenses
or other documents as to which the grant of a security interest would constitute
a violation of a valid and enforceable restriction in favor of a third party on
such grant, unless and until any required consents shall have been obtained.
Each Grantor agrees to use all commercially reasonable efforts to obtain any
such required consent.
SECTION IX.2. Security for Obligations. This Security Agreement secures
the payment of all Obligations of the Borrower now or hereafter existing under
the Credit Agreement, the Notes and each other Loan Document to which the
Borrower is or may become a party, whether for principal, interest, costs, fees,
expenses or otherwise, and all obligations of each Grantor and each other
Obligor now or hereafter existing under this Security Agreement and each other
Loan Document to which such Grantor or such other Obligor is or may become a
party (all such obligations of the Borrower and such Grantor and such other
Obligor being the "SECURED OBLIGATIONS").
SECTION IX.3. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. This
Security Agreement shall create a continuing security interest in the Collateral
and shall
(a) remain in full force and effect until payment in full in
cash of all Secured Obligations, the termination or expiration of all
Letters of Credit and the termination of all Commitments,
(b) be binding upon each Grantor, its successors, transferees
and assigns, and
(c) inure, together with the rights and remedies of the
Facility Agent hereunder, to the benefit of the Facility Agent and each
other Secured Party.
Without limiting the generality of the foregoing clause (c), any Lender may
assign or otherwise transfer (in whole or in part) any Note or Loan held by it
to any other Person or entity, and such other Person or entity shall
-14-
259
thereupon become vested with all the rights and benefits in respect thereof
granted to such Lender under any Loan Document (including this Security
Agreement) or otherwise, subject, however, to any contrary provisions in such
assignment or transfer, and to the provisions of Section 10.11 and Article IX of
the Credit Agreement. Upon the payment in full in cash of all Secured
Obligations, the termination or expiration of all Letters of Credit and the
termination of all Commitments, the security interest granted herein shall
automatically terminate and all rights to the Collateral shall revert to such
Grantor. Upon any such termination, the Facility Agent will, at such Grantor's
sole expense, execute and deliver to such Grantor such documents as such Grantor
shall reasonably request to evidence such termination. Upon any sale or other
transfer of Collateral permitted by the terms of Section 7.2.10 of the Credit
Agreement, the security interest created hereunder in such Collateral (but not
in the proceeds thereof) shall be deemed to be automatically released and the
Facility Agent will, at such Grantor's sole expense, execute and deliver to such
Grantor such documents as such Grantor shall reasonably request to evidence such
release.
SECTION IX.4. GRANTOR REMAINS LIABLE. Anything herein to the contrary
notwithstanding
(a) each Grantor shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein,
and shall perform all of its duties and obligations under such
contracts and agreements to the same extent as if this Security
Agreement had not been executed,
(b) the exercise by the Facility Agent of any of its rights
hereunder shall not release any Grantor from any of its duties or
obligations under any such contracts or agreements included in the
Collateral, and
(c) neither the Facility Agent nor any other Secured Party
shall have any obligation or liability under any such contracts or
agreements included in the Collateral by reason of this Security
Agreement, nor shall the Facility Agent or any other Secured Party be
obligated to perform any of the obligations or duties of any Grantor
thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
SECTION IX.5. SECURITY INTEREST ABSOLUTE. All rights of the Facility
Agent and the security interests granted to the Facility Agent hereunder, and
all obligations of each Grantor hereunder, shall be absolute and unconditional,
irrespective of
-15-
260
(a) any lack of validity or enforceability of the Credit
Agreement, any Note or any other Loan Document;
(b) the failure of any Secured Party or any holder of any Note
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrower, any other Obligor or any
other Person under the provisions of the Credit Agreement, any
Note, any other Loan Document or otherwise, or
(ii) to exercise any right or remedy against any
other guarantor of, or collateral securing, any Secured
Obligations;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations or any
other extension, compromise or renewal of any Secured Obligations;
(d) any reduction, limitation, impairment or termination of any
Secured Obligations for any reason, including any claim of waiver,
release, surrender, alteration or compromise, and shall not be subject
to (and each Grantor hereby waives any right to or claim of) any
defense or setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness, irregularity,
compromise, unenforceability of, or any other event or occurrence
affecting, any Secured Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification
of, or any consent to departure from, any of the terms of the Credit
Agreement, any Note or any other Loan Document;
(f) any addition, exchange, release, surrender or
non-perfection of any collateral (including the Collateral), or any
amendment to or waiver or release of or addition to or consent to
departure from any guaranty, for any of the Secured Obligations; or
(g) any other circumstances which might otherwise constitute a
defense available to, or a legal or
-16-
261
equitable discharge of, the Borrower, any other Obligor, any surety or
any guarantor.
SECTION IX.6. POSTPONEMENT OF SUBROGATION, ETC. Each Grantor hereby
agrees that it will not exercise any rights which it may acquire by reason of
any payment made hereunder, whether by way of subrogation, reimbursement or
otherwise, until the prior payment in full in cash of all Secured Obligations,
the termination or expiration of all Letters of Credit and the termination of
all Commitments. Any amount paid to any Grantor on account of any payment made
hereunder prior to the payment in full in cash of all Secured Obligations shall
be held in trust for the benefit of the Secured Parties and each holder of a
Note and shall immediately be paid to the Secured Parties and each holder of a
Note and credited and applied against the Secured Obligations, whether matured
or unmatured, in accordance with the terms of the Credit Agreement; provided,
however, that if
(a) such Grantor has made payment to the Secured Parties and
each holder of a Note of all or any part of the Secured Obligations,
and
(b) all Secured Obligations have been paid in full in cash, all
Letters of Credit have been terminated or expired and all Commitments
have been permanently terminated,
each Secured Party and each holder of a Note agrees that, at the requesting
Grantor's request, the Secured Parties and the holders of the Notes will execute
and deliver to such Grantor appropriate documents (without recourse and without
representation or warranty) necessary to evidence the transfer by subrogation to
such Grantor of an interest in the Secured Obligations resulting from such
payment by such Grantor. In furtherance of the foregoing, for so long as any
Secured Obligations, Commitments or Letters of Credit remain outstanding, each
Grantor shall refrain from taking any action or commencing any proceeding
against the Borrower or any other Obligor (or its successors or assigns, whether
in connection with a bankruptcy proceeding or otherwise) to recover any amounts
in respect of payments made under this Security Agreement to any Secured Party
or any holder of a Note.
ARTICLE X
REPRESENTATIONS AND WARRANTIES
SECTION X.1. REPRESENTATIONS AND WARRANTIES. Each Grantor represents
and warrants to each Secured Party (a) as to all matters
-17-
262
contained in Article VI of the Credit Agreement insofar as the representations
and warranties contained therein are applicable to such Grantor and its
properties, each such representation and warranty set forth in such Article
(insofar as applicable as aforesaid) and all other terms of the Credit Agreement
to which reference is made therein, together with all related definitions and
ancillary provisions, being hereby incorporated into this Security Agreement by
reference as though specifically set forth in this Section are true and correct
in all material respects and (b) insofar as the representations and warranties
contained herein are applicable to such Grantor and its properties, as set forth
in this Section.
SECTION X.1.1. LOCATION OF COLLATERAL, ETC. All of the Equipment (other
than Rental Equipment) and Inventory of such Grantor is located at the places
specified in ITEM A, ITEM B and ITEM C, respectively, of Schedule I hereto. None
of the Equipment and Inventory has, within the four months preceding the date of
this Security Agreement, been located at any place other than the places
specified in ITEM A and ITEM B, respectively, of SCHEDULE I hereto except as set
forth in a footnote thereto. The place(s) of business and chief executive office
of such Grantor and the office(s) where such Grantor keeps its records
concerning the Receivables, and all originals of all chattel paper which
evidence Receivables, are located at the address set forth in ITEM D of SCHEDULE
I hereto. Such Grantor has no material trade names other than those set forth in
ITEM E of SCHEDULE I hereto. During the four months preceding the date hereof,
such Grantor has not been known by any legal name different from the one set
forth on the signature page hereto, nor has such Grantor been the subject of any
merger or other corporate reorganization, except as set forth in ITEM F of
SCHEDULE I hereto. If the Collateral includes any Inventory located in the State
of California, such Grantor is not a "retail merchant" within the meaning of
Section 9102 of the Uniform Commercial Code - Secured Transactions of the State
of California. All Receivables evidenced by a promissory note or other
instrument, negotiable document or chattel paper have been duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all in form
and substance satisfactory to the Facility Agent and delivered and pledged to
the Facility Agent pursuant to SECTION 4.1.7. Such Grantor is not a party to any
Federal, state or local government contract except as set forth in Item G of
SCHEDULE I hereto.
SECTION X.1.2. OWNERSHIP, NO LIENS, ETC. Such Grantor owns its
Collateral free and clear of any Lien, security interest, charge or encumbrance
except for the security interest created by this Security Agreement and except
as permitted by the Credit Agreement and except for leases of Rental Equipment.
No effective financing statement or other instrument similar in effect covering
all or any part of the Collateral is on file in any recording office, except
such as may have been filed in
-18-
263
favor of the Facility Agent relating to this Security Agreement or as have been
filed in connection with Liens permitted pursuant to Section 7.2.3 of the Credit
Agreement.
SECTION X.1.3. POSSESSION AND CONTROL. Such Grantor has exclusive
possession and control of its Equipment (other than Rental Equipment) and
Inventory.
SECTION X.1.4. NEGOTIABLE DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER.
Such Grantor has, contemporaneously herewith, delivered to the Facility Agent
possession of all originals of all negotiable documents, instruments and chattel
paper currently owned or held by such Grantor (duly endorsed in blank, if
requested by the Facility Agent).
SECTION X.1.5. INTELLECTUAL PROPERTY COLLATERAL. With respect to any
registered Intellectual Property Collateral the loss, impairment or infringement
of which might have a Material Adverse Effect:
(a) such registered Intellectual Property Collateral is
subsisting and has not been adjudged invalid or unenforceable, in whole
or in part;
(b) such registered Intellectual Property Collateral is valid
and enforceable;
(c) such Grantor has made all necessary filings and
recordations to protect its interest in such registered Intellectual
Property Collateral, including recordations of all of its interests in
the Patent Collateral and Trademark Collateral in the United States
Patent and Trademark Office and in corresponding offices throughout the
world and its claims to the Copyright Collateral in the United States
Copyright Office and in corresponding offices throughout the world;
(d) such Grantor is the exclusive owner of the entire and
unencumbered right, title and interest in and to such registered
Intellectual Property Collateral and no claim has been made that the
use of such Intellectual Property Collateral does or may violate the
asserted rights of any third party; and
(e) such Grantor has performed and will continue to perform all
acts and has paid and will continue to pay all required fees and taxes
to maintain each and every item of registered Intellectual Property
Collateral
-19-
264
in full force and effect throughout the world, as applicable.
Such Grantor owns directly or is entitled to use by license or otherwise, all
patents, Trademarks, Trade Secrets, copyrights, mask works, licenses,
technology, know-how, processes and rights with respect to any of the foregoing
used in, necessary for or of material importance to the conduct of such
Grantor's business.
SECTION X.1.6. VALIDITY, ETC. This Security Agreement creates a valid
first priority security interest in the Collateral (subject to Section 9-306 of
the U.C.C. and Liens permitted pursuant to Section 7.2.3 of the Credit
Agreement), securing the payment of the Secured Obligations, and all filings and
other actions necessary or desirable in the State of New York and in each other
jurisdiction where the failure to make any such filing or other action would
have a Material Adverse Effect to perfect and protect such security interest
have been duly taken, except as permitted by Section 7.1.12 of the Credit
Agreement with respect to Intellectual Property Collateral.
SECTION X.1.7. AUTHORIZATION, APPROVAL, ETC. Except as have been
obtained or made and are in full force and effect, no authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required either
(a) for the grant by such Grantor of the security interest
granted hereby or for the execution, delivery and performance of this
Security Agreement by such Grantor, or
(b) for the perfection of or the exercise by the Facility Agent
of its rights and remedies hereunder.
SECTION X.1.8. COMPLIANCE WITH LAWS. Such Grantor is in compliance with
the requirements of all applicable laws (including the provisions of the Fair
Labor Standards Act), rules, regulations and orders of every governmental
authority, the non-compliance with which could reasonably be expected to have a
Material Adverse Effect or which could reasonably be expected to materially
adversely affect the value of the Collateral or the worth of the Collateral as
collateral security.
ARTICLE XI
COVENANTS
-20-
265
SECTION XI.1. CERTAIN COVENANTS. Each Grantor covenants and agrees
that, so long as any portion of the Secured Obligations shall remain unpaid, any
Letters of Credit shall be outstanding or any Lender shall have any outstanding
Commitment, such Grantor will, unless the Required Lenders shall otherwise
consent in writing, perform, comply with and be bound by (a) all of the
agreements, covenants and obligations contained in Article VII of the Credit
Agreement which are applicable to such Grantor or its properties, each such
agreement, covenant and obligation contained in such Article and all other terms
of the Credit Agreement to which reference is made herein, together with all
related definitions and ancillary provisions, being hereby incorporated into
this Security Agreement by reference as though specifically set forth in this
Section and (b) the obligations set forth in this Section.
SECTION XI.1.1. AS TO EQUIPMENT AND INVENTORY. Such Grantor hereby
agrees that it shall
(a) keep all the Equipment (other than Rental Equipment) and
Inventory (other than Inventory sold in the ordinary course of
business) at the places therefor specified in SECTION 3.1.1 or, upon 30
days' prior written notice to the Facility Agent, at such other places
in a jurisdiction where all representations and warranties set forth in
ARTICLE III (including SECTION 3.1.6) shall be true and correct, and
all action required pursuant to the FIRST SENTENCE of SECTION 4.1.7
shall have been taken with respect to the Equipment and Inventory;
(b) cause the Equipment to be maintained and preserved in
accordance with Section 7.1.3 of the Credit Agreement.
SECTION XI.1.2. AS TO RECEIVABLES.
(a) Such Grantor shall keep its place(s) of business and chief
executive office and the office(s) where it keeps its records
concerning the Receivables, and all originals of all chattel paper
which evidences Receivables, located at the address(es) set forth in
ITEM D of SCHEDULE I hereto, or, upon 30 days' prior written notice to
the Facility Agent, at such other locations in a jurisdiction where all
actions required by the FIRST SENTENCE of SECTION 4.1.7 shall have been
taken with respect to the Receivables; not change its name except upon
30 days' prior written notice to the Facility Agent; hold and preserve
such records and chattel paper; and permit representatives of the
Facility Agent after reasonable notice and during
-21-
266
normal business hours to inspect and make abstracts from such records
and chattel paper. In addition, the Grantor shall give the Facility
Agent a supplement to Schedule I hereto on each date a Compliance
Certificate is required to be delivered to the Facility Agent under the
Credit Agreement, which shall set forth any material changes to the
information set forth in SECTION 3.1.1.
(b) After the occurrence of and during the continuance of a
Default of the nature set forth in Section 8.1.9 of the Credit
Agreement or an Event of Default, upon written notice by the Facility
Agent to such Grantor pursuant to this SECTION 4.1.2(b), all proceeds
of Collateral received by such Grantor shall be delivered in kind to
the Facility Agent for deposit to a deposit account (the "COLLATERAL
ACCOUNT") of such Grantor to be maintained with the Facility Agent, and
such Grantor shall not commingle any such proceeds, and shall hold
separate and apart from all other property, all such proceeds in
express trust for the benefit of the Facility Agent until delivery
thereof is made to the Facility Agent.
(c) The Facility Agent shall have the right to apply any amount
in the Collateral Account to the payment of any Secured Obligations
which are due and payable or payable upon demand, or to the payment of
any Secured Obligations at any time that an Event of Default shall
exist.
SECTION XI.1.3. AS TO COLLATERAL.
(a) Until the occurrence and continuance of a Default of the
nature set forth in Section 8.1.9 of the Credit Agreement or an Event
of Default, and such time as the Administrative Agent shall notify such
Grantor of the revocation of such power and authority such Grantor (i)
may in the ordinary course of its business (except as otherwise
permitted under the Credit Agreement), at its own expense, sell, lease
or furnish under the contracts of service any of the Inventory normally
held by such Grantor for such purpose, and use and consume, in the
ordinary course of its business (except as otherwise permitted under
the Credit Agreement), any raw materials, work in process or materials
normally held by such Grantor for such purpose, (ii) will, at its own
expense, endeavor to collect, as and when due, all amounts due with
respect to any of the Collateral, including the taking of such action
with respect to such
-22-
267
collection as the Facility Agent may reasonably request following the
occurrence of a Default of the nature set forth in Section 8.1.9 of the
Credit Agreement or an Event of Default or, in the absence of such
request, as such Grantor may deem advisable, and (iii) may grant, in
the ordinary course of business (except as otherwise permitted under
the Credit Agreement), to any party obligated on any of the Collateral,
any rebate, refund or allowance to which such party may be lawfully
entitled, and may accept, in connection therewith, the return of goods,
the sale or lease of which shall have given rise to such Collateral.
The Facility Agent, however, may, at any time following a Default of
the nature set forth in Section 8.1.9 of the Credit Agreement or an
Event of Default, after giving the Grantor notice of the revocation of
such power and authority (whether before or after the maturity of any
of the Secured Obligations), notify any parties obligated on any of the
Collateral to make payment to the Facility Agent of any amounts due or
to become due thereunder and enforce collection of any of the
Collateral by suit or otherwise and surrender, release, or exchange all
or any part thereof, or compromise or extend or renew for any period
(whether or not longer than the original period) any indebtedness
thereunder or evidenced thereby. Upon request of the Facility Agent
following a Default of the nature set forth in Section 8.1.9 of the
Credit Agreement or an Event of Default, such Grantor will, at its own
expense, notify any parties obligated on any of the Collateral to make
payment to the Facility Agent of any amounts due or to become due
thereunder.
(b) The Facility Agent is authorized to endorse, in the name of
such Grantor, any item, howsoever received by the Facility Agent,
representing any payment on or other proceeds of any of the Collateral.
SECTION XI.1.4. AS TO INTELLECTUAL PROPERTY COLLATERAL. Each Grantor
covenants and agrees to comply with the following provisions as such provisions
relate to any Intellectual Property Collateral of such Grantor that:
(a) such Grantor shall not, unless such Grantor shall either
(i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Facility Agent) that any
of the registered Patent Collateral is of negligible economic value to
such Grantor, or (ii) have a valid business purpose to do otherwise, do
-23-
268
any act, or omit to do any act, whereby any of the registered Patent
Collateral may lapse or become abandoned or dedicated to the public or
unenforceable.
(b) such Grantor shall not, and such Grantor shall not permit
any of its licensees to, unless such Grantor shall either (i)
reasonably and in good faith determine (and notice of such
determination shall have been delivered to the Facility Agent) that any
of the registered Trademark Collateral is of negligible economic value
to such Grantor, or (ii) have a valid business purpose to do otherwise,
(i) fail to continue to use any of the registered
Trademark Collateral in order to maintain all of the Trademark
Collateral in full force free from any claim of abandonment for
non-use,
(ii) fail to maintain as in the past the quality of
products and services offered under all of the registered
Trademark Collateral,
(iii) fail to employ all of the registered Trademark
Collateral registered with any Federal or state or foreign
authority with an appropriate notice of such registration,
(iv) adopt or use any other registered Trademark
which is confusingly similar or a colorable imitation of any of
the registered Trademark Collateral,
(v) use any of the registered Trademark Collateral
except for the uses for which registration or application for
registration of all of the Trademark Collateral has been made,
and
(vi) do or permit any act or knowingly omit to do any
act whereby any of the registered Trademark Collateral may
lapse or become invalid or unenforceable.
(c) such Grantor shall not, unless such Grantor shall either
-24-
269
(i) reasonably and in good faith determine (and
notice of such determination shall have been delivered to the
Facility Agent) that any of the Copyright Collateral or any of
the Trade Secrets Collateral is of immaterial economic value to
such Grantor, or
(ii) have a valid business purpose to do otherwise,
do or permit any act or knowingly omit to do any act whereby
any of the registered Copyright Collateral may lapse or become
invalid or unenforceable or placed in the public domain except
upon expiration of the end of an unrenewable term of a
registration thereof.
(d) such Grantor shall notify the Facility Agent immediately if
it knows, or has reason to know, that any application or registration
relating to any material item of the Intellectual Property Collateral
may become abandoned or dedicated to the public or placed in the public
domain or invalid or unenforceable, or of any adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any foreign
counterpart thereof or any court) regarding such Grantor's ownership of
any of the Intellectual Property Collateral, its right to register the
same or to keep and maintain and enforce the same.
(e) in no event shall such Grantor or any of its agents,
employees, designees or licensees file an application for the
registration of any Intellectual Property Collateral with the United
States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency in any other country or any political
subdivision thereof, unless it promptly informs the Facility Agent, and
upon request of the Facility Agent, executes and delivers any and all
agreements, instruments, documents and papers as the Facility Agent may
reasonably request to evidence the Facility Agent's security interest
in such Intellectual Property Collateral and the goodwill and general
intangibles of such Grantor relating thereto or represented thereby.
-25-
270
(f) such Grantor shall take all necessary steps, including in
any proceeding before the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in
any other country or any political subdivision thereof, to maintain and
pursue any application (and to obtain the relevant registration) filed
with respect to, and to maintain any registration of, the Intellectual
Property Collateral, including the filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and
taxes (except to the extent that dedication, abandonment or
invalidation is permitted under the foregoing CLAUSES (a), (b) and
(c)).
(g) such Grantor shall, contemporaneously herewith, execute and
deliver to the Facility Agent a Patent Security Agreement, a Trademark
Security Agreement and a Copyright Security Agreement in the forms of
EXHIBIT A, EXHIBIT B and EXHIBIT C hereto, respectively, and shall
execute and deliver to the Facility Agent any other document required
to acknowledge or register or perfect the Facility Agent's interest in
any part of the Intellectual Property Collateral.
SECTION XI.1.5. INSURANCE. Such Grantor will maintain or cause to be
maintained with responsible insurance companies insurance with respect to its
business and properties (including the Equipment and Inventory) against such
casualties and contingencies and of such types and in such amounts as is
required pursuant to the Credit Agreement and will, upon the request of the
Facility Agent, furnish a certificate of a reputable insurance broker setting
forth the nature and extent of all insurance maintained by such Grantor in
accordance with this Section. Without limiting the foregoing, such Grantor
further agrees as follows:
(a) Each policy for property insurance shall show the Facility
Agent as loss payee.
(b) Each policy for liability insurance shall show the Facility
Agent as an additional insured.
(c) With respect to each life insurance policy, such Grantor
shall execute and deliver to the Facility Agent a collateral
assignment, notice of which has been acknowledged in writing by the
insurer.
-26-
271
(d) Each insurance policy shall provide that at least 30 days'
prior written notice of cancellation or of lapse shall be given to the
Facility Agent by the insured.
(e) Such Grantor shall, if so requested by the Facility Agent,
deliver to the Facility Agent a copy of each insurance policy.
(f) All payments in respect of property insurance and life
insurance shall be deposited to the Collateral Account and if there
shall be no Collateral Account shall be paid to such Grantor.
SECTION XI.1.6. TRANSFERS AND OTHER LIENS. Such Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except Inventory in the
ordinary course of business, except for the lease of Rental Equipment
or as permitted by the Credit Agreement; or
(b) create or suffer to exist any Lien or other charge or
encumbrance upon or with respect to any of the Collateral to secure
Indebtedness of any Person or entity, except for the security interest
created by this Security Agreement and except as permitted by the
Credit Agreement.
SECTION XI.1.7. FURTHER ASSURANCES, ETC. Such Grantor agrees that, from
time to time at its own expense, it will promptly execute and deliver all
further instruments and documents, and take all further action that may be
necessary or desirable, or that the Administrative Agent may reasonably request,
in order to perfect, preserve and protect any security interest granted or
purported to be granted hereby or to enable the Facility Agent to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, such Grantor will
(a) ▇▇▇▇ conspicuously each document included in the Inventory,
each chattel paper included in the Receivables and each Related
Contract and, at the request of the Facility Agent, each of its records
pertaining to the Collateral with a legend, in form and substance
satisfactory to the Facility Agent, indicating that such document,
chattel paper, Related Contract or Collateral is subject to the
security interest granted hereby;
-27-
272
(b) if any Receivable shall be evidenced by a promissory note
or other instrument, negotiable document or chattel paper, deliver and
pledge to the Facility Agent hereunder such promissory note,
instrument, negotiable document or chattel paper duly endorsed and
accompanied by duly executed instruments of transfer or assignment, all
in form and substance reasonably satisfactory to the Facility Agent;
(c) execute and file such financing or continuation statements,
or amendments thereto, and such other instruments or notices (including
any assignment of claim form under or pursuant to the federal
assignment of claims statute, 31 U.S.C. ss. 3726, any successor or
amended version thereof or any regulation promulgated under or pursuant
to any version thereof), as may be necessary or desirable, or as the
Facility Agent may reasonably request, in order to perfect and preserve
the security interests and other rights granted or purported to be
granted to the Facility Agent hereby; and
(d) furnish to the Facility Agent, from time to time at the
Facility Agent's request, statements and schedules further identifying
and describing the Collateral and such other reports in connection with
the Collateral as the Facility Agent may reasonably request, all in
reasonable detail.
With respect to the foregoing and the grant of the security interest hereunder,
such Grantor hereby authorizes the Facility Agent to file one or more financing
or continuation statements, and amendments thereto, relative to all or any part
of the Collateral without the signature of such Grantor where permitted by law.
A carbon, photographic or other reproduction of this Security Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement where permitted by law.
ARTICLE XII
THE FACILITY AGENT
SECTION XII.1. FACILITY AGENT APPOINTED ATTORNEY-IN-FACT. Each Grantor
hereby irrevocably appoints the Facility Agent such Grantor's attorney-in-fact,
with full authority in the place and stead of such Grantor and in the name of
such Grantor or otherwise, from time to time in the Facility Agent's discretion,
following the occurrence and continuation
-28-
273
of a Default of the nature set forth in Section 8.1.9 of the Credit Agreement or
an Event of Default, to take any action and to execute any instrument which the
Facility Agent may reasonably deem necessary or advisable to accomplish the
purposes of this Security Agreement, including:
(a) to ask, demand, collect, ▇▇▇ for, recover, compromise,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(b) to receive, endorse, and collect any drafts or other
instruments, documents and chattel paper, in connection with CLAUSE (a)
above;
(c) to file any claims or take any action or institute any
proceedings which the Facility Agent may reasonably deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of the Facility Agent with respect to any of the
Collateral; and
(d) to perform the affirmative obligations of such Grantor
hereunder (including all obligations of such Grantor pursuant to
SECTION 4.1.7).
Such Grantor hereby acknowledges, consents and agrees that the power of attorney
granted pursuant to this Section is irrevocable and coupled with an interest.
SECTION XII.2. FACILITY AGENT MAY PERFORM. If any Grantor fails to
perform any agreement contained herein, the Facility Agent may itself perform,
or cause performance of, such agreement, and the expenses of the Facility Agent
incurred in connection therewith shall be payable by such Grantor pursuant to
SECTION 6.2.
SECTION XII.3. FACILITY AGENT HAS NO DUTY. In addition to, and not in
limitation of, SECTION 2.4, the powers conferred on the Facility Agent hereunder
are solely to protect its interest (on behalf of the Secured Parties) in the
Collateral and shall not impose any duty on it to exercise any such powers.
Except for reasonable care of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Facility Agent
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
any Collateral.
SECTION 5.4. REASONABLE CARE. The Facility Agent is required to
exercise reasonable care in the custody and preservation of any
-29-
274
of the Collateral in its possession; PROVIDED, HOWEVER, the Facility Agent shall
be deemed to have exercised reasonable care in the custody and preservation of
any of the Collateral, if it takes such action for that purpose as any Grantor
reasonably requests in writing at times other than upon the occurrence and
during the continuance of any Event of Default, but failure of the Facility
Agent to comply with any such request at any time shall not in itself be deemed
a failure to exercise reasonable care.
ARTICLE XIII
REMEDIES
SECTION XIII.1. CERTAIN REMEDIES. If any Event of Default shall have
occurred and be continuing:
(a) The Facility Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for
herein or otherwise available to it, all the rights and remedies of a
secured party on default under the U.C.C. (whether or not the U.C.C.
applies to the affected Collateral) and also may
(i) require each Grantor to, and such Grantor hereby
agrees that it will, at its expense and upon request of the
Facility Agent forthwith, assemble all or part of the
Collateral as directed by the Facility Agent and make it
available to the Facility Agent at a place to be designated by
the Facility Agent which is reasonably convenient to both
parties, and
(ii) without notice except as specified below, sell
the Collateral or any part thereof in one or more parcels at
public or private sale, at any of the Facility Agent's offices
or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Facility Agent may deem
commercially reasonable. Each Grantor agrees that, to the
extent notice of sale shall be required by law, at least ten
days' prior notice to such Grantor of the time and place of
any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. The Facility
Agent shall not be obligated to make
-30-
275
any sale of Collateral regardless of notice
of sale having been given. The Facility
Agent may adjourn any public or private
sale from time to time by announcement at
the time and place fixed therefor, and such
sale may, without further notice, be made
at the time and place to which it was so
adjourned.
(b) All cash proceeds received
by the Facility Agent in respect of any sale of,
collection from, or other realization upon all or
any part of the Collateral may, in the discretion
of the Facility Agent, be held by the Facility
Agent as collateral for, and/or then or at any time
thereafter applied (after payment of any amounts
payable to the Facility Agent pursuant to SECTION
6.2) in whole or in part by the Facility Agent for
the ratable benefit of the Secured Parties against,
all or any part of the Secured Obligations in such
order as the Facility Agent shall elect. Any
surplus of such cash or cash proceeds held by the
Facility Agent and remaining after payment in full
in cash of all the Secured Obligations shall be
paid over to the applicable Grantor or to
whomsoever may be lawfully entitled to receive such
surplus.
SECTION XIII.2. Indemnity and Expenses.
-----------------------
(a) Each Grantor jointly and
severally agrees to indemnify the Facility Agent
from and against any and all claims, losses and
liabilities arising out of or resulting from this
Security Agreement (including enforcement of this
Security Agreement), except claims, losses or
liabilities resulting from the Facility Agent's
gross negligence or wilful misconduct.
(b) Each Grantor will upon
demand pay to the Facility Agent the amount of any
and all reasonable expenses, including the
reasonable fees and disbursements of its counsel
and of any experts and agents, which the Facility
Agent may incur in connection with
(i) the administration of this
Security Agreement,
(ii) the custody, preservation, use
or operation of, or the sale of, collection
from, or other realization upon, any of the
Collateral, and
-31-
276
(iii) the exercise or enforcement
of any of the rights of the Facility Agent
or the Secured Parties hereunder, or
(iv) the failure by any Grantor to
perform or observe any of the provisions
hereof.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION XIV.1. LOAN DOCUMENT. This Security Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions thereof.
SECTION XIV.2. AMENDMENTS; ETC. No amendment to or waiver of any
provision of this Security Agreement nor consent to any departure by any Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Facility Agent (on behalf of the Lenders or the Required
Lenders, as the case may be), and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given.
SECTION XIV.3. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including telegraphic
communication) and, if to any Grantor, mailed or telecopied or delivered to it,
addressed to it in care of the Borrower at the address of the Borrower specified
in the Credit Agreement, if to the Facility Agent, mailed or telecopied or
delivered to it, addressed to it at the address of the Facility Agent specified
in the Credit Agreement. All such notices and other communications, when mailed
and properly addressed with postage prepaid or if properly addressed and sent by
pre-paid courier service, shall be deemed given when received; any such notice
or communication, if transmitted by telecopier, shall be deemed given when
transmitted and electronically confirmed.
SECTION XIV.4. SECTION CAPTIONS. Section captions used in this Security
Agreement are for convenience of reference only, and shall not affect the
construction of this Security Agreement.
SECTION XIV.5. SEVERABILITY. Wherever possible each provision of this
Security Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Security Agreement
shall be prohibited by or invalid under such law,
-32-
277
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Security Agreement.
SECTION XIV.6. COUNTERPARTS. This Security Agreement may be executed by
the parties hereto in several counterparts, each of which shall be deemed an
original and all of which shall constitute together but one and the same
agreement.
SECTION XIV.7. GOVERNING LAW, ENTIRE AGREEMENT, ETC. THIS SECURITY
AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING FOR SUCH PURPOSE SECTIONS
5-1401 AND 5-1402 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK),
EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK. THIS
SECURITY AGREEMENT AND THE OTHER LOAN DOCUMENTS CONSTITUTE THE ENTIRE
UNDERSTANDING AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF
AND THEREOF AND SUPERSEDE ANY PRIOR AGREEMENTS, WRITTEN OR ORAL, WITH RESPECT
THERETO.
-33-
278
IN WITNESS WHEREOF, each Grantor has caused this Security Agreement to
be duly executed and delivered by its officer thereunto duly authorized as of
the date first above written.
▇▇▇▇▇▇ CORPORATION
By
------------------------------
Name:
Title:
OMNI INVESTORS, INC.
By
------------------------------
Name:
Title:
DUR-O-WAL, INC.
By
------------------------------
Name:
Title:
BANK ONE, N.A.,
as Facility Agent
By
------------------------------
Name:
Title:
-34-
279
SCHEDULE I
to Subsidiary
Security Agreement
([NAME OF GRANTOR])
Item A. Location of Equipment
---------------------
Description Location
----------- --------
1.
2.
3.
Item B. Location of Inventory
---------------------
Description Location
----------- --------
1.
2.
3.
Item C. Location of Lock Boxes
----------------------
Contact
Bank Name and Address Account Number Person
--------------------- -------------- ------
1.
2.
3.
Item D. Place(s) of Business and Chief Executive Office
-----------------------------------------------
Item E. Trade Names
-----------
Item F. Merger or Other Corporate Reorganization
----------------------------------------
Item G. Government Contracts
---------------------
280
SCHEDULE II
to Subsidiary
Security Agreement
([NAME OF GRANTOR])
Item A. Patents
-------
Issued Patents
--------------
**/Country Patent No. Issue Date Inventor(s) Title
---------- ---------- ---------- -----------------
Pending Patent Applications
---------------------------
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- -----------------
Patent Applications in Preparation
----------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- -----------------
Item B. Patent Licenses
---------------
----------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
281
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
282
SCHEDULE III
to Subsidiary
Security Agreement
([NAME OF GRANTOR])
Item A. Trademarks
----------
Registered Trademarks
---------------------
*/Country Trademark Registration No. Registration Date
--------- --------- ---------------- -----------------
Pending Trademark Applications
------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
----------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
283
Item B. Trademark Licenses
------------------
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
--------- --------- -------- -------- ---- ----
284
SCHEDULE IV
to Subsidiary
Security Agreement
([NAME OF GRANTOR])
Item A. Copyrights/Mask Works
---------------------
Registered Copyrights/Mask Works
--------------------------------
*/Country Registration No. Registration Date Author(s) Title
--------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
----------------------------
* List items related to the United States first for ease of
recordation. List items related to other countries next,
grouped by country and in alphabetical order by country
name.
285
Item B. Copyright/Mask Work Licenses
----------------------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
286
SCHEDULE V
to Subsidiary
Security Agreement
([NAME OF GRANTOR])
Trade Secret or Know-How Licenses
---------------------------------
*/Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
----------------------------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
287
EXHIBIT A
to Subsidiary
Security Agreement
PATENT SECURITY AGREEMENT
-------------------------
This PATENT SECURITY AGREEMENT (this "AGREEMENT"), dated as of
__________ __, 19__, is made between ___________________, a ____________ (the
"GRANTOR"), and BANK ONE, N.A., as facility agent (together with any
successor(s) thereto in such capacity, the "FACILITY AGENT") for each of the
Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of September 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among Dayton Superior Corporation, an Ohio
corporation (the "BORROWER"), the various financial institutions as are, or may
from time to time become, parties thereto (each, individually, a "LENDER", and
collectively, the "LENDERS"), DLJ Capital Funding, Inc., as the Syndication
Agent for the Lenders, Bank of America National Trust and Savings Association,
as the Documentation Agent for the Lenders and the Facility Agent, the Lenders
have extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Subsidiary Security Agreement, dated as of September
29, 1997 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "SECURITY AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Facility Agent a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Secured Obligations;
WHEREAS, each Grantor is a Subsidiary of the Borrower;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
288
WHEREAS, it is in the best interests of the Grantor to execute this
Agreement inasmuch as the Grantor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower by
the Lenders pursuant to the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Credit
Extensions (including the initial Credit Extension) to the Borrower pursuant to
the Credit Agreement, the Grantor agrees, for the benefit of each Secured Party,
as follows:
SECTION _______________ DEFINITIONS. Unless otherwise defined herein or
the context otherwise requires, terms used in this Agreement, including its
preamble and recitals, have the meanings provided (or incorporated by reference)
in the Security Agreement.
SECTION _______________ GRANT OF SECURITY INTEREST. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Facility Agent, and grant to the
Facility Agent a security interest in, for its benefit and the benefit of each
Secured Party, all of the following property (the "PATENT COLLATERAL"), whether
now owned or hereafter acquired or existing by it:
(a) all letters patent and applications for letters patent
throughout the world, including all patent applications in preparation
for filing anywhere in the world and including each patent and patent
application referred to in ITEM A of ATTACHMENT 1 attached hereto;
(b) all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations of any
of the items described in CLAUSE (A);
(c) all patent licenses, including each patent license
referred to in ITEM B of ATTACHMENT 1 attached hereto; and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the
right to ▇▇▇ third parties for
289
past, present or future infringements of any patent or patent
application, including any patent or patent application referred to in
ITEM A of ATTACHMENT 1 attached hereto, and for breach or enforcement
of any patent license, including any patent license referred to in ITEM
B of ATTACHMENT 1 attached hereto, and all rights corresponding thereto
throughout the world.
SECTION _______________ SECURITY AGREEMENT. This Agreement has been
executed and delivered by the Grantor for the purpose of registering the
security interest of the Facility Agent in the Patent Collateral with the United
States Patent and Trademark Office and corresponding offices in other countries
of the world. The security interest granted hereby has been granted as a
supplement to, and not in limitation of, the security interest granted to the
Facility Agent for its benefit and the benefit of each Secured Party under the
Security Agreement. The Security Agreement (and all rights and remedies of the
Facility Agent and each Secured Party thereunder) shall remain in full force and
effect in accordance with its terms.
SECTION _______________ RELEASE OF SECURITY INTEREST. Upon payment in
full in cash of all Secured Obligations, the termination or expiry of all
Letters of Credit and the termination of all Commitments, the Facility Agent
shall, at the Grantor's expense, execute and deliver to the Grantor all
instruments and other documents as may be necessary or proper to release the
lien on and security interest in the Patent Collateral which has been granted
hereunder.
SECTION _______________ ACKNOWLEDGMENT. The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Facility Agent with
respect to the security interest in the Patent Collateral granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.
SECTION _______________ LOAN DOCUMENT, ETC. This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions of the Credit Agreement.
SECTION _______________ COUNTERPARTS. This Agreement may be executed by
the parties hereto in several counterparts, each
-3-
290
of which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
-4-
291
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By
----------------------------------
Name:
Title:
BANK ONE, N.A.,
as Facility Agent
By
----------------------------------
Name:
Title:
-5-
292
ATTACHMENT 1
to Subsidiary Patent
Security Agreement
Item A. Patents
-------
Issued Patents
--------------
**/Country Patent No. Issue Date Inventor(s) Title
---------- ---------- ---------- ----------- ------
Pending Patent Applications
---------------------------
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- ------
Patent Applications in Preparation
----------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- ------
Item B. Patent Licenses
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
----------------------------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
293
EXHIBIT B
to Subsidiary
Security Agreement
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "AGREEMENT"), dated as of
__________ __, 19__, is made between _____________________, a ___________
__________ (the "GRANTOR"), and BANK ONE, N.A., as facility agent (together with
any successor(s) thereto in such capacity, the "FACILITY AGENT") for each of the
Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of September 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among Dayton Superior Corporation, an Ohio
corporation (the "BORROWER"), the various financial institutions as are, or may
from time to time become, parties thereto (each, individually, a "LENDER", and
collectively, the "LENDERS"), DLJ Capital Funding, Inc., as the Syndication
Agent for the Lenders, Bank of America National Trust and Savings Association,
as the Documentation Agent for the Lenders and the Facility Agent, the Lenders
have extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Subsidiary Security Agreement, dated as of September
29, 1997 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "SECURITY AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Facility Agent a continuing security interest in all of the Trademark
Collateral (as defined below) to secure all Secured Obligations;
WHEREAS, each Grantor is a Subsidiary of the Borrower;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
294
WHEREAS, it is in the best interests of the Grantor to execute this
Agreement inasmuch as the Grantor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower by
the Lenders pursuant to the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Credit
Extensions (including the initial Credit Extension) to the Borrower pursuant to
the Credit Agreement, the Grantor agrees, for the benefit of each Secured Party,
as follows:
SECTION _______________ DEFINITIONS. Unless otherwise defined herein or
the context otherwise requires, terms used in this Agreement, including its
preamble and recitals, have the meanings provided (or incorporated by reference)
in the Security Agreement.
SECTION _______________ GRANT OF SECURITY INTEREST. For good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, to secure all of the Secured Obligations, the Grantor does hereby
mortgage, pledge and hypothecate to the Facility Agent, and grant to the
Facility Agent a security interest in, for its benefit and the benefit of each
Secured Party, all of the following property (the "TRADEMARK COLLATERAL"),
whether now owned or hereafter acquired or existing by it:
(a) all trademarks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, service
marks, certification marks, collective marks, logos, other source of
business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of a like
nature (all of the foregoing items in this CLAUSE (A) being
collectively called a "TRADEMARK"), now existing anywhere in the world
or hereafter adopted or acquired, whether currently in use or not, all
registrations and recordings thereof and all applications in connection
therewith, whether pending or in preparation for filing, including
registrations, recordings and applications in the United States Patent
and Trademark Office or in any office or agency of the United States of
America or any State thereof
295
or any foreign country, including those referred to in ITEM A of
ATTACHMENT 1 attached hereto;
(b) all Trademark licenses, including each Trademark license
referred to in ITEM B of ATTACHMENT 1 attached hereto;
(c) all reissues, extensions or renewals of any of the items
described in CLAUSES (A) and (B);
(d) all of the goodwill of the business connected with the use
of, and symbolized by the items described in, CLAUSES (A) and (B); and
(e) all proceeds of, and rights associated with, the
foregoing, including any claim by the Grantor against third parties for
past, present or future infringement or dilution of any Trademark,
Trademark registration or Trademark license, including any Trademark,
Trademark registration or Trademark license referred to in ITEM A and
ITEM B of ATTACHMENT 1 attached hereto, or for any injury to the
goodwill associated with the use of any such Trademark or for breach or
enforcement of any Trademark license.
SECTION _______________ SECURITY AGREEMENT. This Agreement has been
executed and delivered by the Grantor for the purpose of registering the
security interest of the Facility Agent in the Trademark Collateral with the
United States Patent and Trademark Office and corresponding offices in other
countries of the world. The security interest granted hereby has been granted as
a supplement to, and not in limitation of, the security interest granted to the
Facility Agent for its benefit and the benefit of each Secured Party under the
Security Agreement. The Security Agreement (and all rights and remedies of the
Facility Agent and each Secured Party thereunder) shall remain in full force and
effect in accordance with its terms.
SECTION _______________ RELEASE OF SECURITY INTEREST. Upon payment in
full in cash of all Secured Obligations, the termination or expiry of all
Letters of Credit and the termination of all Commitments, the Facility Agent
shall, at the Grantor's expense, execute and deliver to the Grantor all
instruments and other documents as may be necessary or proper to release the
lien on and security interest in the Trademark Collateral which has been granted
hereunder.
-3-
296
SECTION _______________ ACKNOWLEDGMENT. The Grantor does hereby further
acknowledge and affirm that the rights and remedies of the Facility Agent with
respect to the security interest in the Trademark Collateral granted hereby are
more fully set forth in the Security Agreement, the terms and provisions of
which (including the remedies provided for therein) are incorporated by
reference herein as if fully set forth herein.
SECTION _______________ LOAN DOCUMENT, ETC. This Agreement is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions of the Credit Agreement.
SECTION _______________ COUNTERPARTS. This Agreement may be executed by
the parties hereto in several counterparts, each of which shall be deemed to be
an original and all of which shall constitute together but one and the same
agreement.
-4-
297
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By
-----------------------------------
Name:
Title:
BANK ONE, N.A.,
as Facility Agent
By
-----------------------------------
Name:
Title:
-5-
298
ATTACHMENT 1
to Subsidiary Trademark
Security Agreement
Item A. Trademarks
----------
Registered Trademarks
---------------------
*/Country Trademark Registration No. Registration Date
--------- --------- ---------------- -----------------
Pending Trademark Applications
------------------------------
*Country Trademark Serial No. Filing Date
-------- --------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
*Country Trademark Docket No. Filing Date Services
-------- --------- ---------- ----------- --------
----------------------------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
299
Item B. Trademark Licenses
*Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
--------- --------- -------- -------- ---- ----
300
EXHIBIT C
to Subsidiary
Security Agreement
COPYRIGHT SECURITY AGREEMENT
This COPYRIGHT SECURITY AGREEMENT (this "AGREEMENT"), dated as of
__________ __, 19__, is made between _____________________, a __________ (the
"GRANTOR"), and BANK ONE, N.A., as facility agent (together with any
successor(s) thereto in such capacity, the "FACILITY AGENT") for each of the
Secured Parties;
W I T N E S S E T H :
WHEREAS, pursuant to a Credit Agreement, dated as of September 29, 1997
(as amended, supplemented, amended and restated or otherwise modified from time
to time, the "CREDIT AGREEMENT"), among Dayton Superior Corporation, an Ohio
corporation (the "BORROWER"), the various financial institutions as are, or may
from time to time become, parties thereto (each, individually, a "LENDER", and
collectively, the "LENDERS"), DLJ Capital Funding, Inc., as the Syndication
Agent for the Lenders, Bank of America National Trust and Savings Association,
as the Documentation Agent for the Lenders and the Facility Agent, the Lenders
have extended Commitments to make Credit Extensions to the Borrower;
WHEREAS, in connection with the Credit Agreement, the Grantor has
executed and delivered a Subsidiary Security Agreement, dated as of September
29, 1997 (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "SECURITY AGREEMENT");
WHEREAS, as a condition precedent to the making of the Credit
Extensions (including the initial Credit Extension) under the Credit Agreement,
the Grantor is required to execute and deliver this Agreement and to grant to
the Facility Agent a continuing security interest in all of the Copyright
Collateral (as defined below) to secure all Secured Obligations;
WHEREAS, each Grantor is a Subsidiary of the Borrower;
WHEREAS, the Grantor has duly authorized the execution, delivery and
performance of this Agreement; and
301
WHEREAS, it is in the best interests of the Grantor to execute this
Agreement inasmuch as the Grantor will derive substantial direct and indirect
benefits from the Credit Extensions made from time to time to the Borrower by
the Lenders pursuant to the Credit Agreement;
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledged, and in order to induce the Lenders to make Credit
Extensions (including the initial Credit Extension) to the Borrower pursuant to
the Credit Agreement, the Grantor agrees, for the benefit of each Secured Party,
as follows:
SECTION I. DEFINITIONS. Unless otherwise defined herein or the context
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided (or incorporated by reference) in the
Security Agreement.
SECTION II. GRANT OF SECURITY INTEREST. For good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, to
secure all of the Secured Obligations, the Grantor does hereby mortgage, pledge
and hypothecate to the Facility Agent, and grant to the Facility Agent a
security interest in, for its benefit and the benefit of each Secured Party, all
of the following property (the "COPYRIGHT COLLATERAL"), whether now owned or
hereafter acquired or existing by it, being all copyrights (including all
copyrights for semi-conductor chip product mask works) of the Grantor, whether
statutory or common law, registered or unregistered, now or hereafter in force
throughout the world including all of the Grantor's right, title and interest in
and to all copyrights registered in the United States Copyright Office or
anywhere else in the world and also including the copyrights referred to in ITEM
A of ATTACHMENT 1 attached hereto, and all applications for registration
thereof, whether pending or in preparation, all copyright licenses, including
each copyright license referred to IN ITEM B of ATTACHMENT 1 attached hereto,
the right to ▇▇▇ for past, present and future infringements of any thereof, all
rights corresponding thereto throughout the world, all extensions and renewals
of any thereof and all proceeds of the foregoing, including licenses, royalties,
income, payments, claims, damages and proceeds of suit.
SECTION III. SECURITY AGREEMENT. This Agreement has been executed and
delivered by the Grantor for the purpose of
302
registering the security interest of the Facility Agent in the Copyright
Collateral with the United States Copyright Office and corresponding offices in
other countries of the world. The security interest granted hereby has been
granted as a supplement to, and not in limitation of, the security interest
granted to the Facility Agent for its benefit and the benefit of each Secured
Party under the Security Agreement. The Security Agreement (and all rights and
remedies of the Facility Agent and each Secured Party thereunder) shall remain
in full force and effect in accordance with its terms.
SECTION IV. RELEASE OF SECURITY INTEREST. Upon payment in full in cash
of all Secured Obligations, the termination or expiry of all Letters of Credit
and the termination of all Commitments, the Facility Agent shall, at the
Grantor's expense, execute and deliver to the Grantor all instruments and other
documents as may be necessary or proper to release the lien on and security
interest in the Copyright Collateral which has been granted hereunder.
SECTION V. ACKNOWLEDGMENT. The Grantor does hereby further acknowledge
and affirm that the rights and remedies of the Facility Agent with respect to
the security interest in the Copyright Collateral granted hereby are more fully
set forth in the Security Agreement, the terms and provisions of which
(including the remedies provided for therein) are incorporated by reference
herein as if fully set forth herein.
SECTION VI. LOAN DOCUMENT, ETC. This Agreement is a Loan Document
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed, administered and applied in accordance with the
terms and provisions of the Credit Agreement.
SECTION VII. COUNTERPARTS. This Agreement may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
-3-
303
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the day and year first above written.
[NAME OF GRANTOR]
By
-------------------------------
Name:
Title:
BANK ONE, N.A.,
as Facility Agent
By
-------------------------------
Name:
Title:
-4-
304
ATTACHMENT 1
to Subsidiary Copyright
Security Agreement
Item A. Copyrights/Mask Works
---------------------
Registered Copyrights/Mask Works
--------------------------------
*/Country Registration No. Registration Date Author(s) Title
--------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
*Country Serial No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
------------------------------------------------------------
Expected
*Country Docket No. Filing Date Author(s) Title
-------- ---------- ----------- --------- -----
----------------------------
* List items related to the United States first for ease of recordation.
List items related to other countries next, grouped by country and in
alphabetical order by country name.
305
Item B. Copyright/Mask Work Licenses
----------------------------
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ---- ------
306
EXHIBIT L
SOLVENCY CERTIFICATE
Dayton Superior Corporation
---------------------------
This Certificate (this "CERTIFICATE") is delivered pursuant to the
Credit Agreement, dated as of September 29, 1997 (the "CREDIT AGREEMENT"), among
Dayton Superior Corporation, an Ohio corporation (the "BORROWER"), the various
financial institutions as are or may become parties thereto (collectively, THE
"LENDERS"), and DLJ Capital Funding, Inc., as Syndication Agent, Bank of America
National Trust and Savings Association, as Documentation Agent, Bankers Trust
Company, as Administrative Agent and Bank One, N.A., as Facility Agent. Unless
otherwise defined herein or the context otherwise requires, terms used herein
have the meanings provided in the Credit Agreement.
The undersigned hereby certifies that he is the chief financial
Authorized Officer (the "CFO") of the Borrower, and that, as such, he is
authorized to execute this Certificate on behalf of the Borrower. Any term or
provision hereof to the contrary notwithstanding, the CFO is executing this
Certificate in his capacity as an officer of, and solely on behalf of, the
Borrower and its Subsidiaries, and not in his individual capacity. On behalf of
the Borrower and its Subsidiaries (including ▇▇▇▇▇▇), the CFO further certifies
that:
1. The CFO has knowledge of, and has participated in, the
preparation and negotiation of the Credit Agreement, each other Loan
Document, the Purchase Agreement, the Seller Note and the other
material agreements executed in connection therewith and the
Transaction (including the initial Credit Extension, the Acquisition
and the Refinancing) contemplated thereunder or in connection
therewith.
2. The CFO is familiar with the finances of the Borrower and
its Subsidiaries (including ▇▇▇▇▇▇) and has participated in the
preparation of all financial statements of each of the Borrower and its
Subsidiaries, including the Pro Forma Balance Sheet and related
statements of earnings and cash flow. The CFO has also participated in
the development of financial projections for the Borrower and its
Subsidiaries (including ▇▇▇▇▇▇) giving effect to the Transaction
(including the initial Credit Extension, the Acquisition and the
Refinancing) contemplated pursuant to and in connection with the Credit
Agreement.
3. Based upon the foregoing and on a PRO FORMA basis after
giving effect to the Transaction (including the initial Credit
307
Extension, the Acquisition and the Refinancing) contemplated under the
Credit Agreement, as of the date of the Closing Date:
the fair value of the assets of the Borrower and
each of its Subsidiaries (including ▇▇▇▇▇▇) will exceed the
total amount of liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of the
Borrower and each such Subsidiary, on a going-concern basis;
the present fair salable value of the assets of the
Borrower and each of its Subsidiaries (including ▇▇▇▇▇▇) will
exceed the probable total liabilities (including contingent,
subordinated, unmatured and unliquidated liabilities) of the
Borrower and each such Subsidiary as they become absolute and
matured;
the Borrower and each of its Subsidiaries
(including ▇▇▇▇▇▇) will be able to pay its debts, including
contingent liabilities, as they mature and become due;
the Borrower and each of its Subsidiaries
(including ▇▇▇▇▇▇) is not, and will not be, engaged in a
business for which its capital is, or would be, unreasonably
small; and
the Borrower and each of its Subsidiaries
(including ▇▇▇▇▇▇) has not incurred (by way of assumption or
otherwise) any obligation or liability (contingent or
otherwise) under the Credit Agreement or any other Loan
Documents to which it is a party, nor has it made any
conveyance pursuant to or in connection therewith, with actual
intent to hinder, delay or defraud either present or future
creditors of the Borrower or any of its Subsidiaries
(including ▇▇▇▇▇▇) or Affiliates, as the case may be.
4. A copy of the Pro Forma Balance Sheet as of the Closing
Date, after giving effect to the consummation of the Transaction
(including the initial Credit Extension, the Acquisition and the
Refinancing) contemplated under or in connection with the Credit
Agreement is attached hereto as ANNEX I.
308
IN WITNESS WHEREOF, the undersigned chief financial Authorized Officer
has executed and delivered this Solvency Certificate on behalf of the Borrower
as of the 29th day of September, 1997.
DAYTON SUPERIOR CORPORATION
By:
----------------------------
Title:
309
ANNEX I
[PRO FORMA CONSOLIDATED BALANCE SHEET]
310
[Form of ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ P.L.L. Opinion]
September __, 1997
Each of the Lenders
party to the Credit Agreement
referred to below
Bank One, N.A.,
as Facility Agent
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Re: Dayton Superior Corporation
---------------------------
Ladies and Gentlemen:
We have acted as New York counsel to Dayton Superior Corporation, an
Ohio corporation (the "BORROWER"), Omni Investors, Inc., a Delaware corporation
("OMNI"), Dur-O-Wal, Inc., a Delaware corporation ("DUR-O-WAL") and ▇▇▇▇▇▇
Corporation, a Delaware corporation ("▇▇▇▇▇▇"; together with Omni and Dur-O-Wal,
the "SUBSIDIARIES") in connection with the Credit Agreement, dated as of
September 29, 1997 (the "CREDIT AGREEMENT"), among the Borrower, the lending
institutions party thereto (the "LENDERS"), DLJ Capital Funding, Inc., as
Syndication Agent for the Lenders (the "SYNDICATION AGENT"), Bank of America
National Trust and Savings Association, as Documentation Agent for the Lenders
(the "DOCUMENTATION AGENT"), Bankers Trust Company, as Administrative Agent for
the Lenders (the "ADMINISTRATIVE AGENT"), and Bank One, N.A., as Facility Agent
for the Lenders (the "FACILITY AGENT"). This opinion is being delivered to you
pursuant to Section 5.1.16(b) of the Credit Agreement. Capitalized terms used
but not defined herein have the meanings assigned to them in the Credit
Agreement.
In connection with this opinion, we have (a) investigated such
questions of law and (b) examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents and records, in each case as
we have deemed necessary or appropriate for the purposes of expressing the
opinions set forth herein.
311
Our examination has included the following documents:
(a) an execution copy of the Credit Agreement;
(b) an execution copy of each Revolving Note;
(c) an execution copy of each Term Note;
(d) an execution copy of the Borrower Security Agreement;
(e) an execution copy the Subsidiary Security Agreement;
(f) an execution copy of the Borrower Pledge Agreement;
(g) an execution copy of the Subsidiary Pledge Agreement;
(h) an execution copy of the Subsidiary Guaranty; and
(i) execution copies of financing statements on Form UCC-1
(the "FINANCING STATEMENTS") under the Uniform Commercial Code as in
effect in the State of Ohio (the "OHIO UCC"), naming the Borrower and
each of its U.S. Subsidiaries, respectively, as debtor, and the
Facility Agent, as secured party, covering the Collateral described in
each Security Agreement, which Financing Statements shall be filed in
the filing offices (the "FILING OFFICES") listed in ITEM B of SCHEDULE
I hereto.
The documents described in paragraphs (a) through (i) above are referred to
herein, collectively, as the "LOAN DOCUMENTS". The Borrower and the Subsidiaries
are sometimes referred to herein collectively as the "Loan Parties" and
individually as a "LOAN PARTY".
In addition, we have obtained and relied upon such certificates and
assurances from public officials as we have deemed necessary for purposes of
expressing the opinions contained herein.
In stating our opinion, we have assumed that:
(a) each Loan Document has been executed and delivered, in all
material respects, in the respective form submitted to us as the
execution form thereof; and
(b) all documents submitted to us as originals are authentic,
and all documents submitted to us as certified, conformed or
photostatic copies conform to authentic original documents.
312
Based upon the foregoing and such legal considerations as we have
deemed necessary, and subject to the assumptions and qualifications set forth
herein, we are of the opinion that:
VII.0.5. The Borrower has been duly incorporated and is validly
existing and in good standing under the laws of the State of Ohio. Each
Subsidiary has been duly incorporated and is validly existing and in good
standing under the laws of the State of Delaware.
VII.0.6. The execution and delivery by each Loan Party of each Loan
Document to which it is a party, and the performance by each Loan Party of all
of its obligations under each Loan Document to which it is a party, are within
such Loan Party's corporate powers, have been duly authorized by all necessary
corporate action, require no action by or in respect of, or filing (other than
filings and recordings to perfect the Liens granted under the Loan Documents)
with, any governmental body, agency or official under Ohio law and do not (i)
contravene, or constitute a default under, any provision of (a) any United
States federal or Ohio law or regulation that in our experience is normally
applicable to general business corporations in relation to transactions of the
type contemplated by the Credit Agreement or (b) the usury laws of the State of
Ohio, (c) the certificate of incorporation or by-laws of such Loan Party or (d)
any agreement or instrument to which such Loan Party is a party of which we are
aware or (ii) result in the creation or imposition of any Lien on any asset of
any Loan Party under any such agreement or instrument, other than the Liens
created under the Loan Documents.
VII.0.7. No Loan Party is subject to regulation under the Investment
Company Act of 1940, as amended. No Loan Party is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company" within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
VII.0.8. We have no knowledge of (i) any judgment, order, injunction or
other restraint issued, pending or filed, or a hearing seeking injunctive relief
or other restraint pending or noticed, with respect to the performance on the
date hereof by any Loan Party of its obligations under any Loan Document to
which it is a party or the consummation of the transactions contemplated by the
Purchase Agreement or (ii) any pending or threatened litigation, action,
proceeding or labor controversy affecting any Loan Party or any of its
respective assets, properties or business which purports to affect the legality,
validity or enforceability of any of the Loan Documents or the Purchase
Agreement.
VII.0.9. The common stock of the Borrower and each Subsidiary (each an
"ISSUER") listed on Part D of Schedule I annexed hereto has been duly authorized
and validly issued, is fully paid and nonassessable, constitutes
313
100% of the issued and outstanding shares of Capital Stock of such Issuers and
is owned of record by the Persons designated on said Schedule I.
VII.0.10. Assuming that under the law of the State of New York the
Security Agreements create valid security interests in favor of the Facility
Agent, for the benefit of the holders of the Secured Obligations (as defined in
each Security Agreement), in all right, title and interest of the Borrower and
the Subsidiaries (collectively, the "GRANTORS" and each a "GRANTOR") in the
Collateral described therein, the Financing Statements are in appropriate form
for filing and, upon the filing of the Financing Statements in the respective
Uniform Commercial Code filing offices in the jurisdictions listed on Schedule
III hereto, such security interest shall be perfected to the extent that
perfection thereof may be obtained under the Ohio UCC by the filing of a Uniform
Commercial Code financing statement in the State of Ohio, and no further filing
or recording of any document or instrument in the State of Ohio is required to
maintain the perfection of such security interests; PROVIDED that (i)
continuation statements with respect to each Financing Statement must be filed
within six months prior to the fifth anniversary of the filing of any such
Financing Statement or any such continuation statement, (ii) additional filings
may be necessary if any Grantor changes its name, identity or corporate
structure or the jurisdiction in which its place of business, its chief
executive office or the Collateral are located, (iii) we express no opinion on
the perfection of, or need for further filing or recording to perfect, any
security interest in goods now or hereafter located in any jurisdiction other
than the State of Ohio (iv) perfection of such security interests in proceeds is
subject to Section 9-306 of the UCC and (v) we have assumed that none of the
Collateral consists of property of the types described in Sections 9-401(1)(a)
or (b) of the UCC.
VII.0.11. Section 9-103 of the UCC provides that the laws (including
the conflict of laws rules) of the jurisdiction in which the debtor is "located"
govern the perfection, and the effect of perfection or non-perfection, of a
security interest in the "accounts", "general intangibles" and "mobile goods" of
such debtor. Under Section 9-103 of the UCC, a debtor is deemed located "at his
place of business if he has one, at his chief executive office if he has more
than one place of business, otherwise at his residence," Under Section 9-103 of
the Ohio UCC, each Grantor would be deemed located in the State of Ohio.
VII.0.12. Except for the filing of the Financing Statements in the
Filing Offices, and the payment of the fees and charges associated therewith, no
other recordation or filing need be made, and no other action need be taken, in
order to perfect or maintain the perfection of the security interest of the
Facility Agent's security interest in the Collateral, other than the filings and
actions described in PARAGRAPH 5 above.
VII.0.13. In any action or proceeding in any court in the State of Ohio
arising out of or relating to any Loan Document which by its terms is
-14-
314
governed by the internal laws of the State of New York, such court would
recognize and give effect to the provisions of such Loan Document in which the
parties thereto agree that such Loan Document shall be governed by, and shall
be construed in accordance with, the internal laws of the State of New York. In
any event, if the law of the State of Ohio were to be applied to determine the
contractual rights and liabilities created by any Loan Document, such Loan
Document would constitute the legal, valid and binding obligation of the
Borrower, enforceable against the Borrower in accordance with its terms.
VII.0.14. Under the laws of the State, there is no requirement that any
Lender or the Facility Agent, in its capacity as secured party under the
Security Agreement, (a) qualify to do business in the State of Ohio, (b) comply
with the requirement of any foreign lender statute, or (c) pay any State or
local tax in order to carry out the transactions contemplated by, receive the
benefits of, or enforce the provisions of, the Loan Documents, and neither the
Facility Agent nor any Lender shall be subject to any other type of taxation in
the State of Ohio solely as the result of the transactions contemplated by the
Loan Documents.
Each of the opinions herein expressed is subject to each of the
following qualifications:
1. We are members of the bar of the State of Ohio and the foregoing
opinion is limited to the laws of the State of Ohio and the federal laws of the
United States of America. We express no opinion as to any matter relating to
patents, trade names, trade names, trademarks, copyright or other intellectual
property.
2. Our opinions are subject to the effect of bankruptcy, insolvency,
reorganization, fraudulent conveyance, fraudulent transfer, arrangement,
moratorium, and other laws relating to or affecting the rights of creditors
generally.
3. Our opinions are subject to limitations imposed by general
principles of equity upon: (i) the specific enforceability of any of the
remedies, covenants or other provisions of the Loan Documents; (ii) the general
availability of injunctive relief or other equitable remedies; and (iii) the
application of principles of equity (regardless of whether enforcement is
considered in proceedings in law or in equity) in regard to certain covenants
and provisions where (y) the breach of such covenants or provisions imposes
restrictions or burdens upon an obligor, including without limitation the
acceleration of any indebtedness due under the Loan Documents, and a court
determines that such breach is not material to the obligee or (z) the obligee's
enforcement of covenants or provisions of the Loan Documents would violate the
obligee's implied covenant of good faith and fair dealing or would be
commercially unreasonable.
The opinion is rendered solely to you in connection with the above
matter, and may not be relied upon by you for any other purpose or relied
-15-
315
upon by any other person (other than an assignee permitted under Section
10.11 of the Credit Agreement) without our prior written consent.
Very truly yours,
-16-
316
SCHEDULE I
----------
Item A. Recorders' Offices
------------------
Item B. Filing Offices
--------------
Item C. Filing Fees and Charges
-----------------------
Item D. Common Stock
------------
317
MBP DRAFT
9/25/97
EXHIBIT M
LENDER ASSIGNMENT AGREEMENT
To: Dayton Superior Corporation
Attention:
To: [Issuer]
Attention:
To: Bank One, N.A.,
as Facility Agent
Attention:
Dayton Superior Corporation
---------------------------
Gentlemen and Ladies:
We refer to clause (d) of Section 10.11.1 of the Credit Agreement,
dated as of September 29, 1997 (as amended, supplemented, amended and restated,
or otherwise modified from time to time, the "CREDIT AGREEMENT"),among Dayton
Superior Corporation, an Ohio corporation (the "BORROWER"), the various
financial institutions as are, or may from time to time become, parties thereto
(each, individually, a "LENDER", and collectively, the "LENDERS"), and DLJ
Capital Funding, Inc. ("DLJ") as syndication agent (the "SYNDICATION AGENT") for
the Lenders, Bank of America National Trust and Savings Association ("BANK OF
AMERICA"), as documentation Agent (the "DOCUMENTATION AGENT") for the Lenders,
Bankers Trust Company, as administrative agent (the "ADMINISTRATIVE AGENT") for
the Lenders and Bank One, N.A. ("BANK ONE"), as the facility agent (the
"FACILITY AGENT") for the Lenders. Unless otherwise defined herein or the
context otherwise requires, terms used herein have the meanings provided in the
Credit Agreement.
318
As of __________ __, 19__ (the "SETTLEMENT DATE"), ___________________
(the "Assignor") hereby sells and assigns, without recourse, representation or
warranty (except as expressly set forth herein), to _________________ (the
"ASSIGNEE") ______% of [the Revolving Loans, the participations in Letters of
Credit and the Revolving Loan Commitment] [Term Loans] of the Assignor
outstanding under the Credit Agreement (the "ASSIGNED SHARE"). After giving
effect to the foregoing assignment and delegation, the Assignor's and the
Assignee's Percentages for the purposes of the Credit Agreement will be as set
forth opposite such Person's name on SCHEDULE I hereto.
[Add paragraph dealing with accrued interest and fees with respect to
Credit Extensions assigned.]
The Assignee hereby acknowledges and confirms that it has received a
copy of the Credit Agreement and the exhibits related thereto, together with
copies of the documents which were required to be delivered under the Credit
Agreement as a condition to the making of the Credit Extensions thereunder. The
Assignee further confirms and agrees that in becoming a Lender and in making its
Commitments and Credit Extensions under the Credit Agreement, such actions have
and will be made without recourse to, or representation or warranty by any
Agent.
The Assignee represents and warrants that it is legally authorized to
enter into and deliver this agreement and that this agreement constitutes, and,
upon acceptance hereof, the Credit Agreement and each other Loan Document to
which the Assignor was a party will constitute, a legal, valid and binding
obligation of the Assignee, and the Assignor confirms and agrees that it is the
legal and beneficial owner of the Assigned Share, free and clear of any adverse
claim created by it. Except as set forth in the previous sentence, the Assignor
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made pursuant to or in
connection with this agreement, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
other Loan Document or any other instrument or document furnished pursuant
hereto or thereto, including the financial condition of the Borrower or the
performance or observance by any Obligor or any Lender of any of its obligations
under the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto. The Assignee represents and
warrants and confirms that it has received copies of the most recent financial
statements delivered pursuant to Section 7.1.1 of the Credit Agreement and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this agreement. In addition, the
Assignee, independently and without reliance upon the Assignor, any other
Lender, any Agent or either of the Arrangers, and based on such documents and
information as it shall deem appropriate at the time, shall continue to make its
own credit decisions in taking or not taking action under the Credit Agreement,
the other Loan Documents and the other instruments and documents delivered in
connection therewith.
-3-
319
Except as otherwise provided in the Credit Agreement, effective as of
the date of acceptance hereof by the Facility Agent
(a) the Assignee
(i) shall be deemed automatically to have become a
party to the Credit Agreement, have all the rights and
obligations of a "Lender" under the Credit Agreement and the
other Loan Documents as if it were an original signatory
thereto to the extent specified in the second paragraph
hereof; and
(ii) agrees to be bound by the terms and conditions
set forth in the Credit Agreement and the other Loan Documents
as if it were an original signatory thereto (and expressly
makes the appointment set forth in, and agrees to the
obligations imposed under, Article IX of the Credit
Agreement); and
(b) the Assignor shall be released from its obligations under
the Credit Agreement and the other Loan Documents to the extent
specified in the second paragraph hereof.
The Assignor and the Assignee hereby agree that the Assignor will pay
to the Facility Agent the processing fee referred to in Section 10.11.1 of the
Credit Agreement upon the delivery hereof.
The Assignee hereby advises each of you that set forth in SCHEDULE I
hereto are its administrative details with respect to the assigned Credit
Extensions and Commitments and requests the Facility Agent (and the Borrower
consents to the assignment specified herein and) to acknowledge receipt of this
document.
The Assignee agrees to furnish the tax form required by the last
sentence of Section 4.6 (if so required) of the Credit Agreement no later than
the date of acceptance hereof by the Facility Agent.
This agreement shall become effective on the date (the "EFFECTIVE
DATE") as of which all of the following conditions are satisfied: (i) the
execution of a counterpart hereof by each of the Assignor and the Assignee, (ii)
the execution of a counterpart hereof by the Borrower as evidence of its consent
hereto to the extent required under Section 10.11.1 of the Credit Agreement,
(iii) the execution of a counterpart hereof by the Issuer as evidence of its
consent hereto to the extent required under Section 10.11.1 of the Credit
Agreement, (iv) the receipt by the Facility Agent of the processing fee referred
to in Section 10.11.1 of the Credit Agreement, (v) the execution of a
counterpart hereof by each of the Agents as evidence of its acceptance hereof
and, to the extent required under Section 10.11.1 of the Credit Agreement, of
its consent hereto, and (vi) the receipt by the Facility Agent of originals or
facsimiles of the counterparts described above and authorization of delivery
thereof.
This Agreement may be executed by the Assignor and Assignee in separate
counterparts, each of which when so executed and delivered shall
be deemed to be an original and all of which taken together shall constitute one
and the same agreement.
-4-
320
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
duly executed and delivered by their respective authorized officers.
[ASSIGNOR],
as Assignor
By:
---------------------------------
Title:
[ASSIGNEE],
as Assignee
By:
---------------------------------
Title:
Accepted and Acknowledged
this __ day of _______, 19__
BANK ONE, N.A.,
as Facility Agent
By:
-------------------------------
Title:
BANK ONE, N.A.,
as Issuer
By:
-------------------------------
Title:
DAYTON SUPERIOR CORPORATION,
as Borrower
By:
-------------------------------
Title:
-5-
321
SCHEDULE I
LENDER INFORMATION
------------------
LENDER PERCENTAGE DOMESTIC OFFICE LIBOR OFFICE
------ ---------- --------------- ------------
_______________________, Revolving Loans, Participations in
Letters of Credit and Revolving Loan -------------------------- --------------------------
as Assignee Commitment............. % -------------------------- --------------------------
-------------- -------------------------- --------------------------
Term Loans............. % Telecopier: Telecopier:
-------------- --------------- --------------
Attn: Attn:
--------------------- -------------------
Wiring Instructions for the Assignee:
----------------------------
----------------------------
----------------------------